220.4-2

CA 00 01–BUSINESS AUTO COVERAGE FORM ANALYSIS

(July 2010)

SECTION II–LIABILITY COVERAGE

 

1. Who Is An Insured

a. The named insured is an insured for any covered auto.

Note: Naturally, the party listed is an insured according to the auto symbols that apply.

b. Anyone else using a covered auto the named insured owns, hires or borrows with the named insured's permission is an insured with some exceptions.

Related Court Cases:

220_C059, Court In Favor Of Defense For Unauthorized Driver (Classic)

220_C019, Vehicle's Fire Loss In Repair Shop Not Covered Under Auto Policy

1) The owner or any other party the insured hired or borrowed a covered auto from is not covered.

 

Example: Polly, the named insured, rents an import car from Jalopy Motors, Inc. Polly is covered during her use of the rented car but Jalopy Motors is not.

           

Note: An exception to this is any trailer connected to an owned and covered auto.

2) Employees of the named insured are not covered if they or members of their household own the auto.

 

Example: Mavis is vice president of Karla Consultants. On Karla's behalf, she borrows her son's car to impress a client. If an accident occurs, Karla Consultants is covered but Mavis is not.

 

3) Anyone while working in the business of selling, servicing, repairing, parking, or storing autos that uses a covered auto is not covered unless it is the named insured's business.

 

Example: James works for Heffernan International and takes his company vehicle to A-1 Garage for repairs. John, the garage mechanic, takes the vehicle for a test drive. The brakes fail, resulting in a serious accident. Neither John nor A-1 Garage is covered but both Heffernan International and James are covered if they are named in a suit.

 

4) Anyone moving property to or from a covered auto is not an insured but there are numerous exceptions. The named insured's partners, employees and LLC members are covered, as well as lessees and borrowers of autos, including their employees.

 

Example: John is a carpenter with a nice pickup truck. He lets George use it to move his household items to a new location. While unloading a dishwasher, George loses his grip, the dishwasher tips and falls and seriously injures a young child who was watching. George is not an insured.

 

5) Partners and members of a LLC are not insureds for any auto owned by the partner or member or for any auto owned by a member of their households. This means that a partner that borrows his or her spouse's car for company business is not an insured under the Business Auto Coverage Form.

c. Anyone held liable for the conduct of an insured is also considered an insured, but only to the extent of that liability.

Note: CA 20 54–Employee Hired Autos is available to add coverage if an employee hires an auto in his or her own name as an individual to perform business-related duties and activities on behalf of his or her employer. When this endorsement is added, the definition of Who Is An Insured is amended to also include the employee while operating the vehicle owned or rented in his or her name.

Related Court Case: 220_C029, Insurer Not Liable For Driver's Unauthorized Use Of Employer's Truck