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From the Editor
"Ask an Expert" Briefs
“Leaseback” of a Personally-Owned Auto Done Right
Personally-owned autos belong on a personal auto policy (PAP), but occasionally a commercial insured intentionally or unintentionally includes one or several personally-owned auto(s) on its business auto policy (BAP). Commercial clients may do this for one of many reasons; but when a commercial client intentionally or unintentionally includes a personally-owned auto on the BAP, the agent must ascertain the legitimacy of the vehicle’s inclusion on the BAP. The primary goal of this article is to allow agents to answer the question, “When is the inclusion of a personally-owned auto on the BAP legitimate and proper?”
Auto Statutes by State
State laws vary regarding auto policies, personal and commercial. Each state prescribes its own minimum limits and other required coverages. Some state require Uninsured Motorist (UM) and some states require Uninsured and Underinsured Motorist (UM/UIM). Is it a Personal Injury Protection state (aka, No-Fault); or are you allowed to exclude a driver?
Food Truck Claim…BAP or CGL?
According to a recent news story, a dozen or more people were injured by exploding propane tanks used for cooking on a food truck parked at the curb of a public street. With lawsuits likely, where is the coverage…BAP or CGL? Or both? Or neither?
Individually-Owned Auto Added to BAP
One of the most common questions our AAE service gets concerns insuring autos that are titled in an individual's name under a Business Auto Policy where the named insured is a corporation. There are several VU articles about this and variations on this theme. In this article, Mike Edwards explores the issues yet again.
Insuring Food Trucks…Common Exposures in Uncommon Circumstances
What happens when you combine restaurant operations with an auto exposure beyond the mere delivery or catering operation? Join Mike Edwards as he combines his two favorite subjects – insurance and food – into one great article that will put you a step ahead of the competition in this rapidly growing market.
Leasing Your Personal Auto to Your Business
A son and daughter take over the business of their retiring father, forming an LLC with each as the members. The daughter’s husband, a CPA, recommends that she lease her personal auto to the LLC, giving her three options of what to do and advising that her insurance agents can tell her what it would cost and provide a lease agreement. The agent has promised to stop giving tax advice if the CPA promises to stop giving insurance advice.
Pulling a Personally-Owned Trailer with a Company Truck
No, we weren’t kidding in the last issue about the number of questions we get regarding insuring trailers. Here is yet another twist, along with links to other articles at the end. If you search the VU for “trailer,” you will undoubtedly find many more.
The Insurance Implications of the U.S. Supreme Court Same-Sex Marriage Ruling – Commercial Lines Edition
On June 26, 2015 in Obergefell v. Hodges, the U.S. Supreme Court in a 5-4 decision ruled in favor of same-sex marriage. So what does this mean for you and your customers? Specifically, what are the P&C coverage implications? This article primarily examines some commercial lines issues and the companion article does the same for personal lines issues.
BAP Coverage for Loaner Cars...Or Lack Thereof
The ISO Personal Auto Policy provides broad coverage for the use of nonowned autos...essentially, the broadest coverage on any owned vehicle (liability, medical payments, physical damage, etc.) will extend to most rented or borrowed cars. Unfortunately, it's not that simple when dealing with the Business Auto policy and, if an agent isn't careful, their insureds could find themselves with serious exposure gaps.
BAP Symbol 2 Coverage for Deleted Autos
An auto policy was written to provide liability and uninsured motorists (UM BI & PD) coverage on a Symbol 2 basis. The insured asked the agency to delete several autos during the policy term. Later there was an accident with an uninsured motorist involving $8,000 in damage to one of the deleted autos. The insured discovers that they asked the agency to delete the autos in error...they still own them. The insurer denied the claim because the auto was deleted, so Symbol 2 no longer applies. Is this correct?
Business Auto Coverage Games
A corporate owner or officer wants to insure his personally owned auto on the company's Business Auto Policy. Heck, he wants to insure all the family vehicles under the BAP! Or how about this one...a corporate owner wants to rent a car, loan it to his daugher's boyfriend for the summer, and insure under the corporate BAP. With apologies to Joe South, oh the games people play!
Do Businesses Need to Buy UM Coverage?
In today's market, everyone is looking for a way to reduce premiums. One method that is sometimes used is to not carry UM coverage under the BAP. After all, if an employee is injured, there's workers compensation coverage, right? Answer: maybe, maybe not, and definitely not.
DOC Coverage for a Personally Owned Auto Leased to a Corporation
The principal of a corporation has leased her only personally owned auto to the corporation and is named as an additional insured-lessor on that auto. She is named on the DOC form as she carries no personal auto policy. The corporation provides that particular auto to her for her personal use. Since the DOC excludes 'autos owned by the individual,' will there be any coverage under the corporation's policy for her personally when using that vehicle?
Does a Trucker Need CGL Coverage?
Recently, we've had several 'Ask an Expert' questions about the need for CGL coverage for someone whose business involves almost exclusively the driving or operation of a motor vehicle, from long-haul truckers to cement truck drivers to parcel delivery services. Do such businesses really need CGL coverage?
Garage Policy vs. CGL+BAP+GKLL
Many companies insist on writing some auto service exposures under the CGL and BAP policies, with Garagekeepers Legal Liability attached. (In fact, ISO has removed nondealership risks from the Garage Program.) Other carriers use a Garage form. Is one approach better than another?
Garagekeepers vs. On-Hook Coverage
'On-hook' coverage is often provided for towing operations in case a vehicle being transported is damaged. Exactly what is 'on-hook' coverage and how does it compare to garagekeepers coverage? If garagekeepers coverage is provided, is on-hook coverage needed? Well, it depends on what insurer you ask.
Insure Business Autos on a Personal Auto Policy?
Have you ever tried to fit a square peg through a round hole? Several years ago, a large regional insurer published an article in its newsletter about how you should insure a business-owned auto under a personal auto policy. Like the analogy above, this method will not work. No matter how big the hammer is, you will only get splinters.
Insuring Personally Owned Autos on a Corporation's BAP
In recent months, we have received several 'Ask an Expert' questions about insuring autos that are titled in an individual's name under a Business Auto Policy where the named insured is a corporation. Is there any liability or physical damage coverage if this is done? What obligation does the agent have, if any, to determine if a vehicle to be insured is titled in the name of a corporation as opposed to an individual?
Is It BAP or CGL?
A contractor is rolling an air compressor across a parking lot to load it into his truck. He slips and the compressor rolls into a Cadillac. Is it a Business Auto claim or a CGL claim? The answer may not be as simple as you think. In addition, this actual claim submitted to our 'Ask an Expert' service involves two other issues even more important than the coverage!
Overcoming a Symbol 7 Limitation with Symbol 8
Your insured's business auto policy includes Symbols 7 and 8. He acquires a new vehicle, but fails to report it until he has an accident three months later. Normally, there is no coverage under Symbol 7 for acquired vehicles beyond 30 days. However, rather than buy the vehicle, he leased it under a long-term lease agreement. Does that make a difference?
The BAP and Temporary Substitutes
Question: 'My customer has a Business Auto Policy (BAP) with Symbol 1 for liability and Symbol 7 for physical damage. One of their autos will be in the shop for two weeks for repairs and I want to make sure there are no gaps in coverage. Since they will rent a vehicle during this time, it will be a temporary substitute auto and the BAP responds for liability and physical damage claims, right?'
Trucking Accounts...Working with Underwriters
Despite all the history and data available, the trucking-insurance industry has not figured out how to determine the right price for coverage, is confined to a per-power-unit thought process, and has not been able to substantiate risk demographics. By working together, agents and underwriters can change this picture. It is our hope that the information provided in this article will enable agents dealing in truck insurance to work smarter and more efficiently, to improve submission hit ratios and save a world of time.
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