Chapter 8 Flashcards
(40 cards)
Identify the three basic categories of commercial auto loss exposures.
1) liability loss exposures, 2) property loss exposures, 3) personal loss exposures
Identify the most common way a business can incur auto liability.
through negligent injury of persons or damage to property by an employee operating an auto owned by the business.
Identify situations in which an organization can become liable for injury or damage to others that results from the use of autos it does not own.
An employee may use his or her own auto to further an employer’s business. Another example is when an organization hires autos from other organizations for terms ranging from a few hours to a number of years. Whatever the period of time, the hiring organization dan be held legally liable for injury that results from the vehicle’s operation. Similarly, a person or an organization that borrows an auto from another can be held liable for injury arising from its operation.
Identify the purpose of garagekeepers coverage.
To insure customers’ autos while they are in the custody of the insured auto or trailer dealer.
Describe the main consequences of damage to or destruction of an auto from the perspective of the auto’s owner.
Decrease in or loss of the auto’s value and loss of use of the auto until it can be repaired or replaced.
Describe the various commercial auto coverages that cover personal loss exposures arising from auto accidents.
Medpay, PIP and UM coverage cover personal loss exposures arising from auto accidents.
Identify what types of insureds are eligible for the Business Auto Coverage form.
Any organizations other than auto or trailer dealers and motor carriers (businesses that transport the property of others) are eligible for the BACF.
Describe the purposes for adding endorsements to commercial auto coverage forms.
Endorsements are commonly used to add coverages, to designate additional insureds, to add or omit exclusions, and to bring standard coverage forms into conformity with state insurance regulations.
Explain the numerical symbol system used to indicate the covered autos for the various coverages available under the BACF.
They are used to indicate covered autos. One or more of these numeriacal symbols are entered beside each coverage listed in the policy schedule to indicate which types of autos are covered.
Identify the 10 symbols the BACF uses to signify coverage.
1) Any auto, 2) Owned autos only, 3) Owned PP autos only, 4) Owned autos other thann PP, 5) vehicles subject to no-fault, 6) owned autos subject to a compulsory UM law, 7) specifically described auto, 8) hired autos only, 9) nonowned autos only, 19) Mobile equipment subject to compulsory or financial responsibility or other motor vehicle insurance law only.
Contrast the coverage for newly acquired autos provided by symbols 1-6 or 19 with that provided by symbol 7 in the BACF
If symbols 1-6 or 19 are used, newly acquired autos of the type indicated by the symbol are automatically covered. The insurer will learn of newly acquired autos at the end of the policy period (during the audit), an the insured will pay the additional premium. If symbol 7 is used, newly acquired autos are covered from the time of acquisition only if the insurer insures all autos owned by the named insured, or the newly acquired auto replaces a covered auto and the named insured asks the insurer to cover the newly acquired auto within 30 days after the acquisition.
Identify the main situation in which symbol 19 is useful.
When an insured has coverage through symbol 9 (specifically described autos)
Howard is a local beverage distributor who owns four delivery trucks. In ordinary circumstances, these vehicles handle all of his business needs. On occasion, when one of the vehicles is out of service, Howard’s employees will use their own cars to make small deliveries. For liability coverage in his BACF, what symbol or symbols are appropriate for Howard’s business?
Howard will have coverage for any auto, owned or nonowned, if symbol 1 is entered for liability coverages. Because vehicles used in the business are limited to owned vehicles and those of his employees, he can alternatively use symbols 2 and 9.
Identify the 3 distinct duties that an insurer has under the BACF liability coverage agreement.
A duty to pay claims, a duty to pay “covered pollution cost or expense,” a duty to defend the insured.
What determines whether a vehicle qualifies as a covered auto under the BACF?
Depends on which coverage symbols are indicated in the schedule of coverages and what covered autos are listed in the business auto declarations.
Identify the circumstances under which the BACF will cover pollution cost expense.
It must be caused by an accident and must result from the ownership, maintenance, or use of a covered auto. In addition, the same accident that causes the pollution cost or expense must also result in BI or PD covered by the policy.
Describe who is an insured under the BACF.
The named insured is an insured for any covered auto. Anyone other than the named insured is an insured while using with the insured’s permission a covered auto owned, hired, or borrowed by the named insured, subject to certain restrictions.
Identify the 6 supplementary payments BACF liability coverage provides.
All expenses incurred by the insurer, 2) Up to $2,000 for bail bonds, 3) The cost of bonds to release attachments in any suit against the insured that the insurer defends, 4) All reasonable expenses incurred by the insured at the insurer’s request, 5) All court costs taxed against the insured in any suit against the insured defended by the insurer, 6) All interest on the full amount of any judgment that accrues after entry of the judgment in any suit against the insured that the insurer defends
Identify the categories of exclusions in the BACF.
Expected or intended injury; workers comp and related exclusions; care, custody, or control exclusion; exclusions related to loading and unloading; operations and completed operations exclusions; pollution, war, and racing exclusions.
Identify the three basic physical damage coverages from which the insured may choose under the BACF
Collision, Comprehensive, Specified Causes of Loss
Explain what is included in the BACF collision coverage.
Direct and accidental loss or damage to a covered auto caused by collision with another object or overturn.
Explain what is included in the BACF’s comprehensive coverage.
Direct and accidental loss or damage to a covered auto by any peril except collision or overturn or a peril specifically excluded.
Identify examples of perils insured under the BACF’s Specified Causes of Loss Coverage.
Direct and accidental loss caused by fire, lighning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, or loss resulting from the sinking, burning, collision, or derailment of a conveyance transporting the covered autos.
Identify examples of the types of electronic equipment excluded under the BACF.
Tapes, records, discs or similar devices; radar detectors, laser detectors, and similar devices; any equipment, regardless of whether it is permanently installed, that reproduces, receives, or transmits audio, visual, or data signals; any accessories used with the previously described equipment.
