Commercial Auto Insurance This coverage part may be added to the CPP to protect an insured against BI or PD to others arising out of the operation, maintenance or use of an auto used for business purposes. This coverage part is similar in nature and scope to the PAP except that the exposure is different. It provides BI and PD coverage in addition to physical damage protection for the covered business auto. Coverage is provided for three classes of autos including: Owned Hired Non-owned

Any type of covered auto used for business purposes should be covered by this coverage part. There are several coverage forms that can be purchased including: • Business Auto Coverage • Garage Coverage • Garage Keepers’ Liability • Truckers’ Coverage

Business Auto Coverage Form The standard form for insuring commercial automobiles is this form. It may be added to the commercial auto coverage part and provides liability, physical damage coverage, medical payments and uninsured motorist coverage. This form possesses five coverage sections including: • Section I Covered Autos. Three classes of autos are insurable including owned, hired and non-owned autos. Hired autos include those that are leased, hired, rented or borrowed, excluding autos that are owned by employees. Non-owned autos are typically owned by an employee (not the company) but are used for business purposes.

• Section II Liability coverage covers legal liability of the insured, defense costs and supplementary payments. Pollution damage will only be covered if pollution is caused by an accident where the damaged gas tank leaked gas or other pollutants necessary for the normal operation of a covered auto.

• Section III Physical damage coverage section may be written to cover: Collision – upset of the covered vehicle or collision with another vehicle or object. Comprehensive – any loss, other than collision or overturn that is not otherwise excluded. This would include glass breakage or hitting an animal. Specified Causes of Loss – is similar to comprehensive but is more limited in coverage. Specified perils are fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief or vandalism, and the sinking, burning, collision or derailment of a conveyance transporting the covered auto

• Sections IV The Conditions section of the BAP includes the most common conditions. Common conditions listed are the duties of the insured following a loss, subrogation, liberalization, policy periods and coverage territory. • Section V This section of the BAP gives the full meaning of terms included within the policy. An exclusion section is also included. Most of these exclusions are similar to those appearing in other liability policies. However, pollution liability is covered.

Garage Coverage Form This form is available for businesses who wish to be covered for liability arising out of garage operations. It may be purchased by a garage, auto sales firms, service stations, repair shops, public parking lots and storage garages. Garage coverage does not cover property damage to autos or other property of customers in the care, custody or control of the named insured. This is provided by Garage keepers Liability. Garage keepers Liability is a form of bailee liability which provides coverage for damage to the autos of customers when they are in the custody of the named insured. The insured may choose from among several perils insured against including collision, comprehensive or other specified perils.

specified perils. Truckers’ Coverage Form Truckers may insure a single vehicle, several vehicles or a fleet. The truckers’ coverage form may be added to the commercial auto coverage part. Premiums charged are generally based upon class rates. This form will protect a trucker who contracts with another party in order to haul goods or property. Some truckers may use their own tractor or cab to haul the property of others in the customer's trailer. In this situation, the trailer owner provides liability insurance for himself and the trucker.

If the tractor or cab of the trucker is not being used to pull the trailer of another, it requires its own coverage in the form of a bobtail endorsement. "Non-trucking" use of the tractor or cab without a trailer is called bobtailing. If a tractor or cab pulls an empty trailer, this is known as deadheading. The actual endorsement that is added to provide coverage for bobtailing or deadheading is called "Truckers Insurance for Non-Trucking Use." Regulation of Commercial Carriers An organization that transports goods or passengers for a fee is known as a carrier. A common carrier is one that makes transportation available to the public and has liability for bodily injury to others.

The 1980 Motor Carrier Act requires that truckers and carriers file proof of liability insurance in order to operate (MCS90 endorsement). The financial responsibility limits required according to this Act were as follows: A Type 1 trucker who is for hire to carry non-hazardous property in interstate or foreign commerce must carry a minimum of $750,000 of coverage. A Type 2 trucker for hire for private intra or interstate transportation of hazardous substances must carry a minimum of $5 million of coverage. A Type 3 transporting oil listed as a hazardous substance or any other substance not identified under type 2 must carry a minimum of $1 million of coverage.

Several endorsements are available to be added to commercial auto coverage including: •Auto Medical Payments Coverage is a form of accident insurance with coverage limited to land motor vehicle incidents without regard to fault. It provides a prompt source of medical expense reimbursement for occupants of covered autos. •Drive Other Car Coverage is available when persons have furnished a company auto for business and personal use. The endorsement makes the person an insured for an auto owned neither by the named insured nor the operator and therefore, provides personal non-ownership liability coverage.

•Employees as Insureds can be used to provide employees with protection in the event of accidents while employees are using their own auto on company business. This provides excess protection once the employees' personal auto limits are exhausted. •The Individual Named Insured Endorsement is used when the named insured is a sole proprietor. Its purpose is to provide the insured with the equivalent of insurance as provided by the personal auto policy.

•Deductible Liability Coverage can be added which is characterized by a deductible that must be satisfied by the insured before the policy will pay any liability losses. •Uninsured Motorists Coverage can include coverage for property damage and/or liability coverage.

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