Just as it is with private persons who own autos, businesses with autos also face significant third party liability created by their use. It’s quite common to secure protection against losses by securing Commercial Automobile coverage. The big difference between personal and commercial auto policies is the variety of vehicles covered by the latter.

A trucking company was facing a lawsuit for a collision that was caused by one of its drivers. However, it fought against the suit due to a couple of key factors involved in the accident. One was how the vehicle was being used and the other was the driver’s condition during that use.

Click below to discover whether the trucking firm was obligated to respond to the loss after consideration by two courts. The stakes could be high for the employee/driver.

Understanding a Commercial Auto Policy is, like nearly all property and casualty insurance forms, fairly simple. It’s a straightforward transaction. The insurer will respond to certain types of losses that occur to certain types of property or persons when they involve certain operators (also known as insureds).

The plaintiff trucking firm had a solid understanding of its commercial auto policy’s coverage obligation. The firm consistently advised their drivers what rules they were always required to follow when performing their jobs. It was also made clear that situations falling outside the rules might be allowed if company permission was given.

When the trucking operation contested a loss caused by an employee, it successfully avoided responsibility. During litigation, it demonstrated how the driver’s alcohol impairment and personal use of a company vehicle (without permission) fell outside of their policy’s obligation to provide coverage.

Click here for a handy bit of information on the various risks that are common with truckers. It includes recommendations of coverages that are designed to address the described risks. It is from the Commercial Lines Survey found in Advantage Plus.

We mentioned earlier that one significant difference between policies that protect personal and commercial (business) exists with the type of vehicles each covers. Another difference worth discussion is the commercial automobile policy’s use of covered auto symbols.

Symbols (numbers) designate what vehicles and form of coverage apply under a given policy. Specifically, a number is entered on a policy declarations/schedule next to each described vehicle. The symbols typically refer to the vehicle status (ownership or use) in relationship to the policy’s named insured. The symbols are specifically defined. This is a critical feature that addresses the wider variety of vehicle use that usually exists with businesses.

Click here for more information on covered automobile symbols. It is from the Commercial Automobile Liability Section of PF&M found in Advantage Plus.

Our featured case centered upon a loss that was not covered by the trucking firm’s insurer. This was due to an unauthorized use of a vehicle by an impaired employee. A basic commercial auto policy may contain coverage gaps for employees who have legitimate access to company vehicles for personal use.

A basic commercial auto policy’s focus is primarily upon handling business losses that involve company-owned or controlled cars and use that arises out of their operations. Companies should explore whether their coverage may need to be adjusted.

Gaps in protection may exist for different loss situations. For instance, if a company car is the only vehicle in an employee’s household, that household may not have its own insurance. Coverage may not extend to spouses or other family members who also use the company vehicle. Another unprotected instance is an employee who has an accident while temporarily using a car that is owned by a friend.

Click here for an excerpt from an article that discusses an endorsement that may close some gaps. It is from Emarketing for Agents found in Advantage Plus.