General conditions

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SECTION IV – BUSINESS AUTO CONDITIONS

The following conditions apply in addition to the Common Policy Conditions:

Analysis:

The Business Auto Coverage Form (BAP) conditions are not the only conditions that apply. As with most ISO forms, the Common Policy Conditions apply first and foremost to the coverages, and the auto conditions are applied in addition to the common policy conditions. The insured must adhere to all conditions contained within the entire policy.

Common Policy Conditions

Like the Insurance Services Office coverage forms for other commercial lines, the business auto coverage form does not make a complete coverage part or policy unless the common policy conditions form, IL 00 17, is added. The common policy conditions discuss policy cancellation procedures, changes in the terms of the policy, examination of the named insured's books and records, inspections and surveys that the insurer has the right to make, who is to pay premiums and who is to receive any return premiums, and the transfer of the rights and duties of the insured. For a discussion of the common policy conditions, see Common Policy Conditions.

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A. Loss Conditions

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1. Appraisal For Physical Damage Loss

If you and we disagree on the amount of "loss", either may demand an appraisal of the "loss". In this event, each party will select a competent appraiser. The two appraisers will select a competent and impartial umpire. The appraisers will state separately the actual cash value and amount of "loss". If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:

1. Pay its chosen appraiser; and
2. Bear the other expenses of the appraisal and umpire equally.

If we submit to an appraisal, we will still retain our right to deny the claim.

Analysis:

There are two major points to the appraisal condition. First, either party may demand an appraisal of the loss; neither the insured nor the insurer has the ability to force a settlement on the other party and neither the insured nor the insurer has to get the other party's permission in order for an appraisal to be put into motion. Second, the insurer's acceptance of an appraisal does not act as a waiver on the part of the insurer; a claim can still be denied if warranted due to an exclusion or some other relevant part of the auto form.