Chapter 3 – The Commercial Automobile Exposure Flashcards Preview

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Flashcards in Chapter 3 – The Commercial Automobile Exposure Deck (36):

commercial property policies routinely exclude

any payment for physical damage to automobiles owned or used by the insured


private passenger

Registered in the name of the business, used primarily for business use are insured in the same manner. Due to the additional exposure for business use, an increased premium will normally be charged for third party liability coverages.


Commercial vehicles

Generally used to transport the goods of the insured or those belonging to


SEF No. 44 Family Protection Endorsement (underinsured or uninsured motorist)

Payment is limited to the difference between the liability insurance limit of the insureds policy and that carried by the motorist at fault.


Accident Benefits

compulsory no fault coverage in all provinces, except Newfoundland

Coverage is generally provided for the following:
- Reimbursement of reasonable medical expenses
- Rehabilitation costs
- Funeral expenses
- Death benefits
- Loss of income


Loss of use coverage starts immediately when...

- The damage is such that the vehicle cannot be operated under its own
- If stolen, on the day following the report of the theft to the insurer or to the
- Other instances, at the time the automobile is delivered for repair due to
the loss or damage


Loss of Use is not available on...

taxis, tractors, U-drive vehicles
and certain trailers


SPF No. 8 Standard Lessor’s Contingent Automobile Policy

Agrees to indemnify the lessor for loss incurred as a direct result of the lessee’s failure to effect or maintain the automobile insurance required by the lease contract. The insurer agrees to pay the difference between the insurance purchased by the lessee and the amounts provided by this policy.


SEF No.5d Conversion Coverage Endorsement

Covers losses caused by the dishonest acts of the lessee which result in the loss of the automobile to the lessor – can be used on short or long term leases


SEF No.27 Legal Liability for Damage to Non-Owned
Automobiles Endorsement

eliminates the need for own
damage coverage from the lessor


SEF No.27 Legal Liability for Damage to Non-Owned
Automobiles Endorsement restrictions...

- Coverage restricted to insured and spouse
- Coverage is for the same perils as are insured under the SPF No.1 Owners Form
- No more than one automobile may be rented or lased by insureds or their spouses at any one time
- Coverage is normally restricted to certain types of automobiles
- Coverage provided is subject to a maximum amount in any one


Public omnibus

bus which serves several purposes at once, transporting both passengers and property



one which is rented to others


Jitney or sight seeing conveyance

a bus, often used to transport tourists on
local tours


shall not be deemed to be the carrying of passengers

In return for the formers carriage in the automobile for the latter

Occasional and infrequent…carriage of another person who shares the cost of the trip

Carriage of a temporary or permanent domestic servant of the insured or his spouse

Carriage of the clients or customers or prospective client or customers

Occasional and infrequent…transportation of children to or from activities conducted as part of an educational program


Scheduled Basis

Each automobile is specifically identified and coverages are not required to be the same for all automobiles.


Fleet Basis

A minimum number of automobiles under a common ownership or control. Rate advantages when coverages are provided on a fleet policy.


Scheduled Automobiles

Vehicles are specifically identified with coverages applicable and premiums charged.


SEF No.21b Blanket Basis Fleet Endorsement

insured is required to provide the insurer with a complete schedule of all such automobiles at the time insurance is requested


SEF No.21a Monthly Reporting Basis Fleet Endorsement

insurer agrees to calculate the premium on the basis of
receipts or mileage as reported to it


Retrospective Rating

final premium charged will fall within an established minimum and maximum range. The insured’s loss ratio is a factor, this encourages insureds to develop and
maintain effective loss prevention programs.


SPF No.6 Standard Non-Owned Automobile Policy

third party liability exposures of business owners

Coverage can be provided (i) separately or, as is most common, (ii) by way of endorsement to the Commercial General Liability Policy


non-owned automobile

Owned by an employee
A hired automobile
Operated under contract for the insured


Types of Garage Risks

- Automobile dealers
- Repair garages
- Service stations
- Storage garages
- Parking lots


Garage Risks Excluded by Other Liability Policies

- Policy coverages do not extend to insure bodily injury or property damage arising…of…any automobile
- Coverage for personal property in the care, custody or control of the insured is excluded


Owned Automobiles (Garage Policies)

automobiles for use by the principals and key sales staff, tow trucks, service loaners and automobiles being held for sale.


Non-owned Automobiles (Garage Policies)

Customers - moving automobiles on the lot and test driving


Exclusions - Garage Policies

- Loss or damage to property carried in or upon an automobile owned or driven by any person insured by this section…
- Loss or damage to any customer’s automobile


SEF No.70 Named Chauffeur Endorsement

If the vehicle is driven by a designated employee only, used to reduce the premium charged on
Subsection 1 Collision or Upset


Monthly Average Basis

insured selects an amount of insurance which represents the maximum value of owned automobiles expected at any one time


Co-Insurance Basis

The insured is required to purchase an amount not less than 80% of the actual cash value of all owned automobile


Garage Policies Exclusions

- Caused by the conversion, embezzlement, theft or secretion by any person in lawful possession of the automobile
- Caused by the voluntary parting with title or ownership
- Under Subsection 2 & 3 (Comprehensive, Specified Perils) for loss or damage by theft from any open lot or unroofed space owned, rented or controlled by the insured except the theft of an entire automobile


SEF No.74 Open Lot Pilferage Endorsement –
Owned Automobiles

coverage for pilferage losses


SEF No.77 Legal Liability for Comprehensive Damage to Customers’ Automobiles Endorsement (Including Open Lot Pilferage)

additional coverage for open lot pilferage for insureds that store customers automobiles in the open.


SEF No.71 Excluding Owned Automobiles

delete all policy coverages on “any automobile owned, hired or leased by our licensed in the name of the insured” and used for automobiles already insured under a SPF No.1 Owner’s Form and related endorsements. This also results in a reduction in premium.


SEF No.76 Additional Insured Endorsement (Broad Form)

regular or frequent use to a person who is not an active partner or full-time employee of the business