ISO MOTOR CARRIER COVERAGE FORM ARCHIVE

(October 2022)

This is a repository of articles and analyses relating to earlier editions of this coverage form.

Archive Index
Analysis	CA 00 20–Motor Carrier Coverage Form Analysis–03 10 Edition
Analysis	CA 00 20–Motor Carrier Coverage Form Analysis–03 06 Edition
Analysis	CA 00 20–Motor Carrier Coverage Form Analysis–10 01 Edition
Comparison	Compare: CA 00 20–Motor Carrier Coverage Form 03 10 Edition To The 03 06 Edition
Comparison	Compare: CA 00 20–Motor Carrier Coverage Form 03 10 Edition To The 03 06 Edition Knowledge Tester Quiz
Comparison	Comparison Of The 1997 Motor Truck Carriers Program To The 1993 Motor Truck Carriers Program
Comparison	Comparison Of The 1997 Motor Truck Carriers Program To The 1993 Motor Truck Carriers Program Knowledge Tester Quiz
Endorsements	Reserved for Future Use
Special Analysis	Reserved for Future Use

CA 00 20–MOTOR CARRIER COVERAGE FORM ANALYSIS–03 10 Edition

INTRODUCTION

CA 00 20–Motor Carrier Coverage Form is designed for the motor carrier industry and can be used by any carrier for hire. With the elimination of CA 00 12–Truckers Coverage Form, this is the only ISO auto form specifically designed for the trucking industry.

This analysis is based the 03 10 edition of this coverage form. Changes from the previous edition are in bold print.

CA 00 20–MOTOR CARRIER COVERAGE FORM ANALYSIS

CA 00 20 opens by defining the terms you or your as the named insured and we, us and our as the insurance company providing the coverage. Named insured is not defined. As a result, it means only the entities on the declarations. All other definitions are found in Section V–Definitions.

SECTION I–COVERED AUTOS

Numerical symbols are used to determine the autos insured and the coverages provided. The only coverages that apply to loss or damage are those with a symbol beside them. The only autos covered are those defined by the indicated symbol. These symbols are defined in the Description Of Covered Auto Designation Symbols.

A. Description Of Covered Auto Designation Symbols

61–Any Auto

This is the broadest symbol designation and has no limitations or restrictions. Vehicles defined as autos in this coverage form are covered, subject to certain exclusions and conditions. Because of the broad scope of the coverage provided, many insurance companies are reluctant to use this symbol. Even if a company uses it for liability, it may not do so for physical damage. No other symbol should appear in the same box when Symbol 61 is used.

62–Owned Autos Only

This symbol means that any auto the named insured owns is covered, including those acquired after the inception date. In addition, any owned or non-owned trailer pulled by an owned vehicle is also covered if this symbol is used with liability coverage.

Note: The definition of trailer includes semitrailers, dollies that convert a semitrailer into a trailer, and containers, but only with respect to Trailer Interchange Coverage.

63–Owned Private Passenger Type Autos Only

This symbol means only the named insured's owned private passenger type autos, including those acquired after the inception date.

64–Owned Commercial Autos Only

This symbol means any trucks, tractors and trailers the named insured owns, including those acquired after the inception date. For liability coverage, it also means any non-owned trailer attached to an owned power unit.

65–Owned Autos Subject To No-Fault

This symbol applies to vehicles licensed or garaged in a state where no fault coverage is available but only to autos required to have such coverage. Coverage also extends to such autos acquired after the inception date in addition to those the named insured owned on the inception date.

66–Owned Autos Subject To A Compulsory Uninsured Motorists Law

This symbol applies to any auto the named insured owns garaged or licensed in a state that requires that the named insured carry uninsured motorists coverage. It also applies to any auto acquired after the inception date.

Note: This symbol does not apply to vehicles licensed or operated in states that allow the named insured to formally reject Uninsured Motorists coverage.

67–Specifically Described Autos

Only autos specifically scheduled and for which a premium charge is made are covered. Similar to Symbol 62 above, the liability coverage provided extends to any owned or non-owned trailer pulled by this type of owned vehicle.

68–Hired Autos Only

This symbol means only autos the named insured leases, hires, rents or borrows. This symbol has a significant limitation. It does not include leased, hired, rented, or borrowed vehicles owned by an employee, partner, member of a limited liability company, or members of any of the preceding groups’ households.

69–Trailers In Your Possession Under A Written Trailer Or Equipment Interchange Agreement

This symbol applies only to trailers and related equipment that the named insured does not own but that are in its possession and for which it agreed to be legally responsible in a written trailer or equipment interchange agreement.

70–Your Trailers In The Possession Of Anyone Else Under A Written Trailer Interchange Agreement

This symbol applies to losses that occur to owned or hired trailers the named insured leases, loans or rents to others that are subject to a written trailer interchange agreement between it and the other party.

Note: The Motor Carrier Coverage Form exclusion for physical damage loss to trailers controlled by other parties does not apply when this symbol is indicated on the declarations.

71–Nonowned Autos Only

This symbol applies only to autos the named insured uses in its business that it does not own, lease, hire, rent or borrow. Private passenger type autos owned by employees, partners in the case of a partnership, members in the case of limited liability companies, or members of the preceding group’s households are included. Coverage applies only when they are used in the named insured's business or its personal affairs.

79–Mobile Equipment Subject To Compulsory Or Financial Responsibility Or Other Motor Vehicle Insurance Law Only

This symbol applies only to land vehicles considered mobile equipment under the definition of mobile equipment. It extends Motor Carrier Coverage to mobile equipment but only in states where such equipment is subject to registration and/or licensing laws. This meshes with the Commercial General Liability exclusion for such equipment.

Note: Several issues arise concerning symbol use. From time to time, more than one symbol is needed.

Example: Hurryup Transport wants all of its commercial vehicles covered, as well as any hired or non-owned vehicles. Hurryup's insurance agent requests symbols 64, 68, and 71 for liability coverage after deciding not to enter symbol 61, realizing that Hurryup's insurance company would probably refuse to cover "any auto."

Manuscript Symbol

An additional manuscript symbol not mentioned in the Motor Carrier Coverage Form is available by adding endorsement CA 99 54–Covered Auto Designation Symbol. Symbol 72 is available for the Motor Carrier Coverage Form and the autos considered covered must be listed and described on the endorsement schedule.

Example: Hurryup Transport wants liability coverage for all of its owned vehicles and physical damage coverage on all owned vehicles except the concrete mixer it owns and leases to Good Deeds, LLC, a local not-for-profit masonry contractor, for $1.00 a year. Good Deeds provides all liability and physical damage coverage. As a result, symbol 72 is used for Hurryup’s liability and physical damage coverage. The description/definition for symbol 72 is: "All owned autos, except the concrete mixer."

B. Owned Autos You Acquire After The Policy Begins

1. If Symbols 61–Any Auto, 62–Owned Autos Only, 63–Owned Private Passenger Type Autos Only, 64–Owned Commercial Autos Only, 65–Owned Autos Subject To No-Fault, 66–Owned Autos Subject To A Compulsory Uninsured Motorists Law or 79–Mobile Equipment Subject To Compulsory Or Financial Responsibility Or Other Motor Vehicle Insurance Law Only are used for coverages indicated on the declarations, autos of the type described by such symbols that the named insured acquires during the policy period are also covered.

2. When symbol 67–Specifically Described Autos is used, new autos acquired during the policy period are covered only if the insurance company either covers all vehicles the named insured already owns or if the new vehicle replaces a scheduled vehicle. The named insured must inform the insurance company of the acquisition within 30 days of the acquisition date.

Example: Hurryup Transport has a fleet of tractor-trailer rigs and one private passenger vehicle. Symbol 67 is entered for all coverages provided but only the tractor-trailer units are scheduled. The private passenger vehicle is insured elsewhere. There is no coverage for a pickup Hurryup purchases because it does not replace a scheduled vehicle and coverage is not provided for all owned vehicles.

C. Certain Trailers, Mobile Equipment And Temporary Substitute Autos

When liability coverage is selected based on entries on the declarations, l additional categories of vehicles are added as covered vehicles.

1. Utility trailers having a load capacity of 2,000 pounds or less and designed for travel on public roads are covered but only while being pulled by a covered auto.

Example: Hurryup Transport rents a trailer with a 2,000-pound load capacity to transport a 1,500-pound machine. The trailer qualifies as a covered auto as long as the named insured's covered vehicle pulls it.

2. Mobile equipment being carried or towed by a covered auto is covered.

Example: Hurryup Transport's is towing a generator. It was not properly secured and becomes uncoupled. It strikes and damages a Volkswagen. Hurryup Transport’s liability coverage responds to the damage to the Volkswagen.

3. If the named insured's covered, owned auto is temporarily out of service for repair or service or due to breakdown, repair, servicing, loss or destruction, a non-owned, temporary substitute is covered but only if the named insured uses it with the owner's permission.

Example: Bill, Hurryup’s owner, must drive to another state on business but is concerned because the convertible top in his Miata is stuck in the down position and it looks like it might rain. Bill decides to rent a car for the trip. The rental is not automatically covered if any liability symbol other than 61 was selected. On the other hand, if Bill puts the Miata in for service and then rents a car for the trip, Hurryup has liability coverage if Bill is involved in an accident.

SECTION II–LIABILITY COVERAGE

A. Coverage

It also has the right and duty to defend any insured against suits seeking damages covered by this insurance. It decides how to handle that obligation. It has the right to decide what to investigate, whether the claim is valid, and whether settling the claim or contesting it is appropriate. However, the company no longer has to provide a defense once an action is resolved by payment of a settlement, a court award, or by exhausting the limit of insurance that applies.

Note: A pollution event is covered only if connected to a covered bodily injury or property damage loss.

Example: Hurryup Transport does not properly maintain its oldest, large tractor-trailer unit. During its latest trip, the brakes failed, causing an accident that involved four vehicles and multiple claimants. The insurance company realized that Hurryup was at fault in the accident and settled out of court with as many of the claimants as the limits allowed. Once they were exhausted, the company no longer had to provide Hurryup with a legal defense against the remaining claimants and Hurryup was left to bear the entire cost of the remaining legal expenses by itself.

1. Who Is An Insured

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

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. The following persons are not insureds.

(1) When the named insured hires or borrows a covered auto, the owner, employee, agent, or driver of the owner, or any other party the auto was hired or borrowed from is not an insured.

(2) The named insured's employees or agents are not insureds if the employees, agents or members of their households own the auto.

Note: If the named insured borrows an employee's car to pick a client up at the airport, the employee is not an insured.

(3) When the covered auto is being worked on, the individual doing the work is not an insured if he or she is in the business of selling, servicing, repairing, parking, or storing autos. However, those individuals are insureds if the named insured owns the business.

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

Example: Bill allows Jack, one of his friends, to use one of Hurryup’s trucks to move his household property. Jack is not an insured when he loses control of his piano and it strikes his new neighbor.

(5) The named insured's partners or members are not insureds for a covered private passenger auto they or members of their households own.

c. Owners or others the named insured hires or borrows trailers from are insureds while they are attached to a covered power unit. They are also insureds when the trailers are not attached but are used exclusively in the named insured's business.

d. Any party leasing a non-trailer covered auto to the named insured is an insured only if all of the following apply:

There is a written agreement
The written agreement does not require the lessor to hold the named insured harmless
The leased auto is used in the named insured carrier for hire business

Note: Employees, agents or drivers of the lessor are insured if the party leasing the auto to the named insured is considered an insured.

e. Parties liable for the conduct of any insured described above are also insureds to the extent of their liability.

The following are not insureds:

(1) Other than the named insured and its employees, any carrier for hire and its agents or employees that is:

(a) Subject to motor carrier insurance requirements and does not use auto liability insurance to meet them

(b) Not covered for primary hired autos liability that insures the parties that own the autos and their employees and agents while the hired autos are used exclusively in the truckers business according to operating rights granted to it by a public authority

Note: This does not apply when the named insured uses a written agreement to lease an auto to carrier for hire when that lease holds that carrier harmless.

(2) When a trailer is detached from a covered auto and is being transported, rail, water or air carriers are not insureds. This applies only when the covered auto is being loaded, transported or unloaded by the carrier.

Note: One of the important differences in Who Is An Insured in this coverage form compared to the old Truckers Coverage Form is the section dealing with the named insured’s business operations. The Truckers Coverage Form specifically referred to the named insured’s business as a trucker and to the operating rights granted by a public authority. The Motor Carrier Coverage Form does not.

2. Coverage Extensions

a. Supplementary Payments

The Motor Carrier Coverage Form provides six supplementary payments.

Note: Payments made from this section do not reduce the limits available to pay for any loss.

These payments apply to any claim or suit the insurance company defends:

(1) All expenses the insurance company incurs

(2) If a bail bond related to a covered accident is required, up to $2,000 is available to pay its cost. The bond could be for a traffic law violation if related to the covered accident. The insurance company does not have to furnish the bond.

(3) The cost of bonds needed to release attachments in a suit filed against the insured that the insurance company defends, but only to bond amounts within the limit of insurance.

(4) The insurance company pays reasonable expenses when it asks the insured to participate in any investigation or defense. This includes actual loss of earnings up to $250 a day because of time taken off from work.

(5) All costs taxed against the insured in a suit filed against it that the insurance company defends. This does not include attorney’s fees or expenses taxed against the insured (03 10 change).

(6) Interest on the full amount of any judgment that accrues after it is entered in a suit against the insured that the insurance company defends. It no longer pays interest once it has paid, offered to pay or provided the court with its share of a judgment.

b. Out-Of-State Coverage Extensions

This section provides two important coverage extensions when an insured is away from the state where the auto is licensed or garaged. They essentially make the insurance provided comply with any state financial responsibility law, no-fault, or other compulsory coverage. The two extensions are:

(1) The limit of insurance provided is automatically increased as needed to meet the limits required by a compulsory or financial responsibility law in the jurisdiction where the covered auto is being operated. An important note to this extension is that it does not apply to any law governing motor carriers, passengers or property.

Example: Hurryup Transport's Motor Carrier Coverage Form has a $50,000 limit of insurance that complies with the financial responsibility laws of the state where the vehicles are licensed and garaged. The federal requirements are $750,000. This extension does not increase his limit to meet the federal requirement.

(2) The Motor Carrier Coverage Form provides the minimum amounts and types of other coverages required of out-of-state autos by the jurisdiction where the covered auto is being operated. One such coverage is no-fault.

Example: Hurryup Transport is transporting honeybees from Gary, Indiana to Fort Myers, Florida. Henrietta, Hurryup's driver, has an accident in Gainesville, Florida. She has the required no-fault coverage but at a minimum limit because of this extension.

Note: A statement here clarifies that the insurance company does not pay anyone more than once for the same elements of loss because of these extensions. In other words, they do not duplicate any coverage or allow damages to be collected more than once.

B. Exclusions

The insurance provided by this coverage form does not apply to the following:

1. Expected Or Intended Injury

Any bodily injury or property damage the insured expects or intends to cause is excluded.

Note: This exclusion is intended to protect insurance companies from responding to damages or injuries the insured intentionally causes. It is in the public interest to prevent the insurance coverage from being used for gain, to injure competitors, as an instrument of revenge, or to cause any other deliberate harm. There is no ISO endorsement available to buy coverage for intentional acts or to delete this exclusion at the present time.

Example: Suburban Shippers is insured under a Motor Carrier Coverage Form and submitted a serious claim involving Gail, one of its employee drivers. Gail was hurrying to complete her delivery route and was upset that another driver boxed her in by double-parking his vehicle next to hers. Tiring of waiting, she attempted to slowly nudge the other vehicle out of her way but hit the gas pedal too hard and seriously damaged the other vehicle. Suburban's loss notice indicated that the damage caused was unintentional but the insurance company denied the claim because it resulted from Gail's deliberate decision to try to move the other vehicle.

2. Contractual

Damages for bodily injury or property damage that result from liability the insured assumed in a contract or agreement are excluded with two exceptions. They are excluded if either the contract or agreement is considered an insured contract or if the insured would have been liable without a contract or agreement.

3. Workers Compensation

Coverage does not apply to any requirement or obligation the insured or its insurance company must assume due to any workers compensation, disability benefits, unemployment compensation, or similar law.

Note: This exclusion and the one that follows are intended to prevent double indemnification for injury that should be covered under workers compensation or employers liability policies.

4. Employee Indemnification And Employers Liability

Any bodily injury to the insured's employee or the spouse, child, parent, brother or sister of that employee due to the employment of that employee or while performing duties of the insured’s business operations is excluded. This exclusion applies whether the insured is liable as an employer or in any other capacity, or whether the insured is obligated to share damages with or repay someone else who must pay damages because of the injury. This clarification is important because of the widespread use of contractors, subcontractors, independent contractors or leased employees, and much of the uncertainty with respect to who is responsible.

Note: This exclusion has two exceptions. Coverage applies to bodily injury to domestic employees who are not entitled to workers compensation benefits and to liability the insured assumes in an insured contract. Domestic employees are persons who perform household or domestic work primarily for a residence premises.

5. Fellow Employee

It is important to remember that employees are considered insureds. As a result, exclusions 3 and 4 could be circumvented if the injured employee could sue the fellow employee who actually caused the accident. This exclusion prevents that workaround. Bodily injury to a fellow employee of the insured that occurs as a result of or in the course of that employee’s employment is excluded. There is also no coverage for any relative of a fellow employee for consequential damages that arise from such an injury (3 10 addition).

There are two ways to modify this exclusion. An employer may delete the fellow employee exclusion for all employees by using CA 20 55–Fellow Employee Coverage. An employer may delete the fellow employee exclusion for specific employees or specific positions using CA 20 56—Fellow Employee Exclusions For Designated Employees/Positions.

6. Care, Custody Or Control

Property damage to, or covered pollution cost or expense to property the insured owns or transports or that is in its care, custody or control is excluded unless such liability was assumed in a sidetrack agreement.

The Motor Carrier Coverage Form is intended to protect the insured for its negligence and tort liability to others, not to damages or injury to the insured. As such, it reinforces the need for the insured to maintain its premises and properties in good condition and to use reasonable care to prevent damage or injury, including damage to property in its care, custody or control. However, coverage applies if liability is assumed in a sidetrack agreement for property loaned to the insured or for personal property in its care, custody or control.

Note: A sidetrack agreement involves the owners of a premises and a railroad with respect to a railroad sidetrack (transfer or access track) on the insured's premises. The railroad allows the premises owner to use the sidetrack as long as it guarantees the railroad access to the sidetrack and agrees to certain conditions of property maintenance. It may also contain specified conditions of hold-harmless between the owner and the railroad.

Note: The Motor Carrier Coverage Form has no endorsements to cover property in the insured’s care, custody, control, or transported by the insured. Separate inland marine coverage is available to address these exposures. It is designed to protect the property of customers or clients in the insured's care, custody or control. Various coverage forms are available through ISO and the American Association of Insurance Services (AAIS), as well as company specific forms, depending on the insured's needs and operations.

7. Handling Of Property

This exclusion works in conjunction with the ISO Commercial General Liability (CGL) Coverage Form. It provides coverage up to the point where the property is moved to a location where it can be loaded. This exclusion states that coverage does not apply to bodily injury or property damage resulting from handling of property before it is physically moved to the point or place where the insured accepts it to be moved into or onto the covered auto. The CGL provides coverage once the property is delivered so this exclusion states that coverage ceases once the property is moved from the covered auto at the point where the insured makes the final delivery.

8. Movement Of Property By Mechanical Device

Exclusion 7. above and the ISO CGL definition of loading and unloading work in conjunction with this exclusion. It excludes bodily injury or property damage caused by the movement of any property by any mechanical device if it is not attached to the covered auto. Hand trucks are not considered mechanical devices. In other words, loading or unloading by conveyors, mobile carts, forklifts or any other mechanical device other than a handcart is excluded but may be covered by the CGL Coverage Form.

9. Operations

Any bodily injury or property damage that results from operation of mobile equipment listed in paragraphs 6.b. and 6.c. of the definition of mobile equipment is excluded. This includes cherry pickers, air compressors, pumps, generators, sprayers, welding equipment, building-cleaning equipment, geophysical exploration devices, lighting or well servicing equipment. It also excludes bodily injury and property damage losses that involve operation of mobile equipment attached to equipment considered a Symbol 79 type vehicle.

Note: Coverage for this exclusion is available in the ISO CGL Coverage Form.

10. Completed Operations

Coverage does not apply to any bodily injury or property damage due to the insured’s work after it is completed or abandoned. Work is defined as any work or operations the insured performs or has performed for it by others and includes materials, parts or equipment furnished in connection with the work or operations. Work also includes any warranty or representation made with respect to the fitness, quality, durability, or performance of any item defined in the work.

The insured's work is considered completed whenever the first of any one of the following occurs:

All work called for in the named insured’s contract is completed
All work to be done at a job site is completed if the contract calls for work at more than one job site
When that part of the work done at a job site is put to its intended use by any party other than another contractor or subcontractor working on the same project

Note: If the insured's work requires service, maintenance, correction, repair or replacement but is otherwise complete, it is considered complete.

Note: Coverage for this exclusion is available in the ISO Commercial General Liability Coverage Form.

11. Pollution

Pollutants are defined as any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste also includes materials intended for recycling, reconditioning or reclamation.

Coverage does not apply to bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

a. Being transported, towed by, handled, or handled for movement into, onto, or from a covered auto, are otherwise in the course of transit by the insured or on its behalf, or being stored, disposed of, treated or processed in or on a covered auto. This includes any pollutants contained in any property during any of these conditions.

This portion of the exclusion has an exception. Coverage may apply if fuels, lubricants, fluids, exhaust gases, or other similar pollutants needed for or resulting from the normal electrical, hydraulic or chemical function of the covered auto or its parts causes the pollution. The pollutants must escape, seep, migrate or be discharged, dispersed or released directly from an auto part designed by the manufacturer to hold, store, receive or dispose of the pollutants. However, the damages must not arise out of operations of any equipment listed in paragraphs 6.b. or 6.c. in the definition of mobile equipment. This includes cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers, air compressors, pumps, and generators, including spraying, welding, building cleaning, geophysical exploration, lighting, or well servicing equipment.

b. Prior to movement of the pollutant generating property to where the insured receives it in order to move it either into or on a covered auto.

c. After moving the pollutant generating property from the covered auto to the point of the insured’s final delivery.

Paragraphs b and c of this exclusion do not apply if an accident occurs away from premises any insured owns or rents and the pollutants are not in or on a covered auto, if the pollutant generating property is upset, overturned or damaged as a result of maintenance or use of a covered auto and the polluting event is caused directly by an upset, overturn, or damage.

CA 99 48–Pollution Liability–Broadened Coverage For Covered Autos–Business Auto, Motor Carrier And Truckers Coverage Forms is available to provide a buyback for pollution coverage. It changes the pollution exclusion in the coverage form by excluding only liability the insured assumes under a contract or agreement.

12. War

This exclusion unequivocally bars coverage for bodily injury or property damage related to war and similar military events. It is not affected by circumstances such as a formal declaration of war, that the war is a civil uprising, whether it involves government or civilian participants. The bottom line is that there is no coverage for loss related either directly or indirectly to war or warlike activity.

Note: There is no ISO endorsement available to buy back or delete this exclusion at the present time.

13. Racing

There is no coverage for any auto while being used in, practicing or being prepared for any professional or organized racing, demolition contest or stunts.

Note: Simply stated, vehicles are troublesome, even under regular operating conditions. They're heavy, difficult to control and can cause an incredible amount of damage. For these reasons, insurance companies are not interested in providing coverage in cases where vehicle owners deliberately operate their property in a reckless or dangerous manner.

C. Limit Of Insurance

The most the insurance company pays for the total of all damages, including any covered pollution cost or expense resulting from any one covered accident, is the liability limit of insurance on the declarations. This limit applies regardless of the number of insureds, autos covered, vehicles involved in an accident, premium paid or number of claims made. The limit of insurance is the most paid in any one covered accident, regardless of the number of insureds on the declarations.

Example: The two named insureds on the Motor Carrier Coverage Form are Harris Inc. and Jim Harris, the owner. Harris, Inc. owns several private passenger vehicles that Jim uses for both business and pleasure. One evening while using a vehicle on a personal errand, John crashes into another automobile. The injured party sues John as an individual for $500,000 and Smith, Inc. as the vehicle owner, also for $500,000. The Motor Carrier Coverage Form limit of insurance is $500,000. However, since the claimant is awarded $1,000,000 or $500,000 from each of the named insureds, the $500,000 limit of insurance is all that is paid, regardless of the number of insureds.

The final paragraph of this section applying to the limit of insurance states that no one is entitled to receive duplicate payments for the same elements of loss under this coverage form, any coverage endorsement, or any other endorsement attached to it.

Note: CA 99 27–Split Liability Limits is available to amend the Liability Limit Of Insurance. It changes the liability limit of insurance from a single limit to a split limit for bodily injury liability each person, bodily injury each accident, and property damage each accident.

SECTION III–TRAILER INTERCHANGE COVERAGE

Coverage

1. The insurance company pays amounts the named insured is liable for as a result of damages for loss to non-owned trailers and their equipment while in its custody or that it uses. The coverage provided is based on entering symbol 69 in the coverage area on the declarations.

a. Comprehensive Coverage

Coverage applies to any source of damage to a covered auto except collision and overturn.

b. Specified Causes Of Loss Coverage

This coverage applies only to loss or damage caused by or resulting from fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism or sinking, burning, collision or derailment of any conveyance transporting the covered auto.

Note: This is limited physical damage coverage because coverage applies only to the causes of loss indicated as opposed to the approach with comprehensive coverage.

c. Collision Coverage

The only covered loss or damage is that caused by the covered auto's collision with another object or its overturn.

Note: Another object could be another vehicle or an animal, bird, person, tree, building or a sign, to name a few.

2. The insurance company has the right and the duty to defend any insured for any suit for damages but only those covered by this insurance. It has the option to investigate or settle any claim or suit at its discretion. Its duty to defend or settle ends when the limit of insurance for the coverage involved is used up by payments of judgments or settlements.

3. Coverage Extensions

There are five supplementary payments in addition to the Limits Of Insurance.

a. All expenses the insurance company incurs

b. Cost of bonds needed to release attachments. This applies only to bond amounts within the Limit Of Insurance.

c. Reasonable expenses the named insured incurs at the insurance company's request. This includes up to $250 for each day away from work.

d. All costs taxed against the insured in any suit against it that the insurance company defends. This does not include attorney’s fees or expenses taxed against the insured (03 10 change).

e. Interest on the amount of any judgment that accrues after it is entered until the insurance company offers to pay, pays or deposits its part of the judgment with the court.

B. Exclusions

Editor’s note: We have titled a few of the exclusions in this section for analysis purposes. These titles are not part of the Motor Carrier Coverage Form.

1. Coverage does not apply to loss or damage caused by or resulting from the following, regardless of any other cause or event that contributes concurrently or in any sequence to the loss:

a. Nuclear Hazard

This is explosion of any weapon using atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination, regardless of how caused.

b. War Or Military Action

This includes declared or undeclared war, civil war, warlike action by a military force, including acts to defend or hinder an expected or actual attack by any government or authority employing military personnel or agents, as well as insurrection, rebellion, revolution, usurped power or any action to hinder or defend against these.

Note: Damage or loss involving nuclear or war-like activities is excluded even if other loss factors contribute to an incident. In other words, these losses are excluded regardless of how caused or whether or not they combine with any other cause of loss.

2. Loss Of Use

There is no coverage for loss of use, indirect or consequential loss.

3. Wear And Tear And Tire Damage

Coverage does not apply to loss or damage from wear and tear, freezing, mechanical or electrical breakdown. It also does not cover blowouts, punctures or other road damage to tires. This exclusion applies only when the loss is confined to the above items which can be interpreted to mean that when other covered causes occur and these stem from those other causes, they would be covered (03 10 change).

Note: This exclusion does not apply when the entire vehicle is stolen.

Example: Ken, Hurryup's driver, runs over a piece of metal that pierces his tire. There is no coverage because of this exclusion. However, coverage applies for the tire as part of the overall collision loss if the piece of metal came off Ken’s truck when he hit the bridge.

C. Limit Of Insurance (03 10 change)

The most paid for loss or damage to a single trailer is the smallest of the following:

1. The actual cash value of the stolen or damaged property.

Note: The value is based on what the property was worth at the time of the loss, not at the time of adjustment or when it was purchased.

2. The cost to repair or replace the stolen or damaged property with property of like kind and quality

3. The limit of insurance on the declarations

Example: A non-owned trailer in Hurryup's custody has a replacement cost of $20,000. It is covered under a Trailer Interchange Agreement. However, due to its age and condition, its actual cash value is only $5,000. It costs $7,500 to repair it after one of Hurryup's drivers causes it to overturn. The limit of insurance on the declarations is $25,000. In this case, the insurance company pays $5,000, the least of the three amounts.

D. Deductible (03 10 addition)

The deductible amount is taken into account when considering a loss payment. It is subtracted from the actual cash value of the damaged vehicle. The cost to repair or replace the vehicle is reduced by the deductible amount. The loss paid is reduced by the deductible prior to applying the limit of insurance.

Example: Hurryup's trailer limit is $25,000. The deductible is $1,000. A non-owned trailer in its custody covered under a Trailer Interchange Agreement has a replacement cost of $30,000 is destroyed by a covered loss. Since it is a new trailer, its actual cash value is also $30,000. The $1,000 deductible is deducted from the values, reducing the loss amount to $29,000. Since the limit is $25,000 the insured pays $4,000 in addition to the $1,000 deductible.

SECTION IV–PHYSICAL DAMAGE COVERAGE

A. Coverage

1. The insurance company pays for loss to a covered auto and its equipment based on the coverages on the declarations and the symbols the insured selects. When selected, the Motor Carrier Coverage Form provides:

a. Comprehensive Coverage

Coverage applies to any source of damage to a covered auto except collision and overturn and subject to certain exclusions.

b. Specified Causes Of Loss Coverage

Note: Although these are the most common losses, they are very specific, and many others are not covered.

c. Collision Coverage

The only covered loss or damage is that caused by the covered auto's collision with another object or its overturn.

Note: Another object could be another vehicle or an animal, bird, person, tree, building or sign, to name a few.

2. Towing–Private Passenger Vehicles

The insurance company pays for towing and labor costs but only for private passenger autos. The costs must be incurred at the place of disablement.

Note: This means all expenses at the repair shop are excluded.

3. Glass Breakage–Hitting A Bird Or Animal–Falling Objects Or Missiles

The insurance company pays for loss or damage caused by or resulting from glass breakage, striking an animal or bird, and by falling objects or missiles if Comprehensive Coverage applies to the damaged covered auto. However, the insured can choose to cover a glass breakage loss as part of collision when the breakage is due to a collision and avoid paying two deductibles.

Note: This clarifies coverage. The three types of losses described could be called collisions because an object struck the vehicle. This is important because an insured might have a smaller deductible on its comprehensive coverage or may carry only comprehensive coverage.

4. Coverage Extensions

a. Transportation Expenses

If a covered private passenger type auto carries comprehensive or specified causes of loss coverage and it is stolen, this extension provides coverage for temporary transportation costs but only if the entire auto is stolen. If items such as tires or rims are the only things taken, this extension does not apply. Coverage begins 48 hours after the theft and ends when the covered auto is returned and can be used or the insurer pays for its loss, regardless of when the policy expires. The limit is $20 per day and $600 maximum.

b. Loss Of Use Expenses

Expenses an insured must pay under a written rental contract or agreement for loss of use of the rental car are covered but only if it purchases Hired Auto Physical Damage Coverage. Coverage is limited to $20 per day and $600 maximum. This coverage extension pays if the loss of use expenses are caused by:

Other than collision, but only if symbol 68 appears for Comprehensive Coverage
Specified Causes Of Loss, but only if symbol 68 appears for Specified Causes Of Loss Coverage
Collision, but only if symbol 68 appears for Collision Coverage

Note: CA 99 90–Optional Limits–Loss Of Use Expenses can be used to provide higher limits.

B. Exclusions

Editor’s note: We have titled some of the exclusions in this section for analysis purposes. These titles are not part of the Motor Carrier Coverage Form.

1. Coverage does not apply to loss or damage caused by or resulting from the following, regardless of any other cause or event that contributes concurrently or in any sequence to the loss:

a. Nuclear Hazard

This is explosion of any weapon using atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination, regardless of how caused.

b. War Or Military Action

2. Excluded Property

a. Trailer Interchange Agreements

Coverage does not apply to covered autos in the possession of another party when the relationship between the named insured and that other party is based on a written trailer interchange agreement.

Note: This exclusion does not apply to loss payees. If a loss occurs, the insurance company pays the loss payee for its interest. The named insured must then reimburse the insurance company for payments made to the loss payee.

b. Racing

There is no coverage for any covered auto while used in or practicing or being prepared for any professional or organized racing, demolition contest or stunting activity.

c. Tapes, Records And Discs

Tapes, records, discs and similar property or devices designed for use with audio, visual, or electronic equipment are excluded. This exclusion is extremely broad because of changes in media. Tapes and CD’s are excluded as well as DVD’s and equipment that can be attached to any media system within the auto.

Note: ISO uses the term “data electronic” in this exclusion that is not defined or in common usage. It is used to describe devices that are excluded and also to describe equipment that any of these excluded items could be designed for. Although it appears to be an all-inclusive term, its lack of clear meaning could make this exclusion ambiguous.

Note: CA 99 30–Tapes, Records And Discs Coverage is available to provide this coverage. It extends physical damage coverage for tapes, records and discs in covered autos for up to $200 for an additional premium charge.

d. Speed Detection Devices

There is no coverage for radar and laser jamming, detecting, eluding or disrupting equipment designed or used to detect speed.

e. Receiving And Transmitting Equipment (03 10 change)

Any type of electronic equipment used to reproduce, receive or transmit audio, visual or data signals is excluded, whether or not it is permanently installed.

Note: The exception for equipment used solely to reproduce sound is eliminated (03 10 change).

f. Accessories

Coverage does not apply to any accessories used with electronic equipment described in paragraph e.

3. Changes to Exclusion 2 (03 10 addition)

Paragraphs e. and f. of exclusion 2. do not apply to property designed to operate only from the auto’s electrical system and that at the time of loss meet any of the following criteria:

a. Permanently installed in or on the covered auto at the time of loss

b. Not permanently installed but removable only from a housing unit that is permanently installed in or on the covered auto

c. Any item considered integral to items described in a. or b. above

d. Other electrical equipment normal to the operation of the covered auto or that monitors the operating system

4. Wear And Tear And Tire Damage (3 10 change)

Coverage does not apply to loss or damage from wear and tear, freezing, mechanical or electrical breakdown. It also does not cover blowouts, punctures or other road damage to tires. This exclusion applies only when the loss is confined to these items. This can be interpreted to mean that they are covered when other covered causes occur and these stem from those other causes (03 10 change).

This exclusion does not apply when the entire vehicle is stolen.

Note: There are no ISO endorsements available to buy back or delete this exclusion at the present time. The named insured might consider checking into various warranty, labor and replacement programs available through many organizations for tire protection.

5. Diminution Of Value

Loss of a covered auto's value because it was involved in an accident is not covered. Diminution Of Value is defined in Section VI–Definitions.

Example: Hurryup Transport has a collision loss and the tractor is repaired. It receives $2,000 less than a similar unit when it is sold at auction because of the collision loss. Hurryup Transport's claim for the $2,000 is denied because of this exclusion.

C. Limit Of Insurance

1. The most paid for loss or damage in any one accident is the lesser of:

a. The actual cash value of the stolen or damaged property

Note: The value is based on what the property was worth at the time of the loss, not at the time of adjustment or when it was purchased.

b. The cost to repair or replace the stolen or damaged property with property of like kind and quality

2. A $1,000 sub-limit applies to certain types of covered electronic equipment. It must be permanently installed or removable but in a permanently installed housing in a part of the vehicle that the auto manufacturer does not use for such equipment. Any equipment that is part of such equipment is also subject to the sub-limit (03 10 addition).

3. In case of a total loss, adjustments are made for the auto's depreciation and physical condition to establish the actual cash value.

4. If repairing or replacing the auto increases its value, the insurance company does not pay for that increase.

Note: CA 99 28–Stated Amount Insurance amends the limit of insurance for physical damage coverages. For vehicles indicated on the endorsement schedule, the limit for physical damage coverage is changed to the least of the actual cash value, the cost to repair or replace, or the limit indicated on the endorsement schedule. This endorsement should be used with caution because it could decrease the settlement amount.

D. Deductible

The insurance company pays for repair, return or replacement of damaged or stolen property for each covered auto minus the deductible amount indicated on the declarations. However, the comprehensive deductible does not apply to fire or lightning losses.

SECTION V–MOTOR CARRIER CONDITIONS

These conditions are in addition to those in IL 00 17–Common Policy Conditions.

A. Loss Conditions

1. Appraisal For Physical Damage Loss

If the insurance company and the named insured fail to agree to the amount of a loss, either may demand an appraisal. When this occurs, each party selects a competent appraiser, both of whom then select a competent and impartial umpire. Each appraiser separately states the actual cash value and amount of loss. If the two appraisers do not agree, they submit their differences to the umpire. When any two of the three agree, that decision is binding on all parties. The insurer and the named insured each pay the cost of the appraisers and share the expense of the umpire and costs of the appraisal equally.

Note: Even if the insurance company participates in the appraisal process, it still retains the right to deny the claim.

2. Duties In The Event Of Accident, Claim, Suit Or Loss

The insurance company has no duty to provide any coverage under this coverage form unless the named insured fully complied fully with the following duties:

a. In case of an accident, claim, suit or loss, the named insured must provide either the insurance company or its authorized representative with prompt notice of how, when and where the accident or loss occurred, the insured’s name and address and the names and addresses of any injured persons or of any witnesses, if known.

b. The named insured and the involved insured must not commit the insurance company to any payment, obligation or expense. However, the insured can make any commitments it wants at its own expense. The named insured and the insured involved must cooperate with the insurer during investigating or settling the claim or defending the suit. They must also provide copies of all documents the insurance company requests as well as provide it with all necessary authorizations so it can obtain medical records or other pertinent information and submit to examination by a physician the company chooses as long as it is reasonable and at the insurer’s expense.

c. The named insured has additional duties in case of a physical damage loss to a covered auto or its equipment. The police must be notified promptly if the loss is due to theft. In other loss situations and within reason, the named insured must protect the covered auto from further damage and record the expenses incurred to do so because they can be considered when the claim is settled. The insurer must be able to inspect the damaged auto and obtain information about the loss before the auto is repaired or disposed of. If requested by the insurer, the named insured must agree to be examined under oath and sign any statement of answers.

Failure to cooperate can have serious consequences. Although it does not involve commercial auto, this case illustrates what can happen to a party who does not comply with such provisions.

3. Legal Action Against Us

No one may bring legal action against the insurance company until all coverage form terms have been complied with. In addition, there are two additional requirements prior to legal action with respect to liability coverage. First, the insurer must agree that it has an obligation to pay or the amount of the obligation has been determined in a judgment. Second, no party has a right to bring the insurer into an action to determine the insured's liability.

4. Loss Payment–Physical Damage Coverages

The insurance company determines the method to use to settle a physical damage loss. It can:

a. Pay to repair or replace the damaged or stolen property

b. Return the stolen property but bear the expense of returning it. It also pays any damages the auto incurred due to the theft.

c. Pay the appraised or agreed value of the damaged or stolen property and then take any or all of it

Note: Any payment made includes any required sales tax.

5. Transfer Of Rights Of Recovery Against Others To Us

If the insurance company made payments to a party under this coverage form, any rights that party may have to recover from another transfer to the insurer. The party that was paid must do everything necessary to secure the insurer's rights to recover and do nothing to impair those rights.

Note: Serious consequences may arise when the named insured impedes the insurance company's right to seek reimbursement from other parties.

B. General Conditions

1. Bankruptcy

Bankruptcy of the insured or its estate does not relieve the insurance company of its obligations under this coverage form.

2. Concealment, Misrepresentation Or Fraud

Coverage is void in any case of fraud by the named insured at any time relating to this coverage form. It is also void if the named insured or any insured at any time intentionally conceals or misrepresents material facts relating to this coverage form, the covered auto, the named insured’s interest in the covered auto, or any claim made under this coverage form.

3. Liberalization

Any broadened or additional coverage the insurance company provides without an additional premium charge automatically applies to this coverage form. It is effective on the date that the coverage is effective in the named insured’s state.

4. No Benefit To Bailee–Physical Damage Coverages

If a party, such as a bailee, holds or transports property for a fee and requires an assignment of coverage, the insurance company does not recognize that assignment, regardless of any other provision in this coverage form.

5. Other Insurance–Primary And Excess Insurance Provisions

a. This liability insurance is primary for the named insured's covered autos that another motor carrier hires or borrows if a written agreement between them requires that the named insured as lessor hold the motor carrier as lessee harmless. However, it is excess over any other collectible insurance if the written agreement does not have this requirement.

b. This liability coverage is primary when the named insured hires or borrows a covered auto from another motor carrier if a written agreement between them does not require that the other motor carrier as lessor to hold the named insured as lessee harmless but only when the named insured uses the covered auto exclusively in its motor carrier operations. However, it is excess over any other collectible insurance if the written agreement does not have this requirement.

c. With respect to trailers, this liability coverage is provided on the same primary or excess basis as the liability coverage provided for the power unit if it is a covered auto. However, it is excess if the power unit is not a covered auto.

d. This coverage is primary for any Trailer Interchange Coverage this coverage form provides.

e. Other than as indicated above, this insurance is primary for any covered auto the named insured owns and excess for covered autos it does not own.

f. Under hired auto physical damage coverage, a covered auto the named insured leases, hires, rents or borrows is considered an owned covered auto. The one exception is when such autos come with a driver.

Note: CA 20 54–Employee Hired Autos is available to add coverage when an employee hires an auto in his or her own name as an individual intending to perform business-related duties and activities for the named insured.

g. This coverage is always primary when liability is assumed in an insured contract, regardless of the provisions above.

Note: This supersedes the provisions of paragraph 5.e. above.

h. The insurance company pays only its share when any other insurance covers the loss on the same basis, regardless of whether that coverage is on a primary or excess basis. Its share is the proportion that this limit of insurance bears to the total of the limits of all coverage forms and policies that apply on the same basis.

Note: Ratios are determined based on each company’s limits as a percentage of all limits available. Losses are proportioned among companies accordingly.

6. Premium Audit

a. The initial premium payment is an estimated premium based on the exposures the named insured stated at inception. The insurance company calculates the final premium based on the insured's actual exposures. Once that is done, the estimated premium is subtracted, and the first named insured is either billed for the additional amount owed or receives a refund if it overpaid. The billing statement indicates the date additional premium is due.

b. When coverage is issued for longer than a one-year term, the premium is calculated annually based on the insurance company's rates in effect at the beginning of each annual period.

7. Policy Period, Coverage Territory

Only accidents and losses that occur during the policy period indicated on the declarations and in the coverage territory are covered. The coverage territory is the United States of America and its territories and possessions, Puerto Rico and Canada.

Worldwide coverage is provided if a covered private passenger auto is leased, rented or hired for a period of less than 30 days and the responsibility to pay is determined in the territories listed in the first paragraph of this condition. Coverage also applies while a covered auto is being moved between points in the coverage territory.

Note: CA 01 21–Limited Mexico Coverage is available to minimally broaden the coverage territory. However, it should be read carefully and evaluated completely before being used because of its very limited nature.

8. Two or More Coverage Forms Or Policies Issued By Us

Except for coverage forms or policies issued specifically as excess, if this coverage form and any other coverage form or policy issued to the insured by the insurance company or any of its affiliates apply to the same accident, the most paid for the total limit of insurance under all the coverage forms or policies does not exceed the highest applicable limit of insurance under any one coverage form or policy.

SECTION VI–DEFINITIONS

A. Accident includes continuous or repeated exposure to the same conditions that result in bodily injury or property damage.

B. Auto is a land motor vehicle, trailer or semitrailer designed for travel on public roads. It does not include mobile equipment as defined below. It also includes land vehicles subject to a state's financial responsibility or vehicle registration laws.

C. Bodily injury is not only bodily injury sustained by a person but also sickness or disease sustained by a person, including resulting death from any of these.

D. Covered pollution cost or expense is any cost or expense arising out of requests, demands, orders, statutory or regulatory requirements, claims or suits by or on behalf of a governmental authority demanding that the insured or others test for, monitor, clean up, remove, contain, treat, detoxify, neutralize, or in any way respond to or assess the effects of pollutants. This includes suits or claims brought by the governmental authority or others for any of these.

It does not include cost or expense that arises out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

a. Being transported, towed by, handled or handled for movement into, onto or from a covered auto, are otherwise in the course of transit by or on behalf of the insured, or are being stored, disposed of, treated or processed in or on a covered auto. This includes any pollutants contained in any property during any of the previously indicated conditions.

This paragraph has an exception. Coverage may apply if fuels, lubricants, fluids, exhaust gases or other similar pollutants needed for or as a result of the normal electrical, hydraulic or chemical function of the covered auto or its parts causes the pollution. The pollutants must escape, seep, migrate or be discharged, dispersed or released directly from an auto part designed by the manufacturer to hold, store, receive or dispose of the pollutants. However, the damages must not arise out of operation of any equipment listed in paragraphs 6.b. or 6.c. in the definition of mobile equipment, such as cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers, air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting or well servicing equipment.

b. Prior to moving the pollutant generating property to the place where the insured receives it in order to move it either into or on a covered auto.

c. After moving the pollutant generating property from the covered auto to the point of the insured’s final delivery.

Note: Paragraphs b and c of this exclusion will not apply if an accident occurs away from a premises any insured owns or rents and the pollutants are not in or on a covered auto, but only if the pollutant generating property is upset, overturned or damaged resulting from maintenance or use of a covered auto and upset, overturn or damage causes the polluting event.

E. Diminution in value is the loss of market value solely due an accident. This loss of value can be actual or perceived.

F. Employee includes leased workers but not temporary workers.

G. Insured is any party who qualifies as an insured under Who Is An Insured. Coverage applies separately to each insured seeking coverage or against whom a claim or suit is brought. The one exception is that the limit of insurance does not apply per insured.

H. Insured contract includes the following:

1. Leases of premises

2. Sidetrack agreements

3. Easement or license agreements. However, contracts in conjunction with construction or demolition operations on or within 50 feet of a railroad are not insured contracts.

4. Obligations required by ordinance when the purpose is to indemnify a municipality. However, this does not apply to any work being done for the requesting municipality.

5. The portion of a contract or agreement that relates to the named insured’s business, including any municipal indemnification in connection with work being done for the municipality, where the named insured assumes the tort liability of another party. The tort liability must be to pay for bodily injury or property damage to a third party or organization. Tort liability is liability the named insured would have had without a contract or agreement.

6. The portion of an auto rental or lease contract or agreement the named insured or an employee enters into that relates to the named insured’s business. Any obligation the named insured or its employee has to pay for property damage to the auto is not considered an insured contract.

These contracts or agreements are not considered insured contracts:

a. Indemnification of a railroad for bodily injury or property damage arising out of construction or demolition operations within 50 feet of railroad property that affects any railroad bridges, trestles, tracks, road beds, tunnels, underpasses or crossings

b. Any loan, lease or rental contract or agreement where the named insured or its employees borrow, lease or rent an auto with a driver

c. Contracts or agreements that hold persons or organizations in the business of transporting property by auto on a fee or hire basis harmless for the named insured's use of a covered auto unless it is used in the named insured's business as a motor carrier for hire under Who Is An Insured

I. Leased worker is a person the named insured leases from a labor-leasing firm to work in its business. It requires an agreement between the leasing firm and the named insured. Temporary workers are not considered leased workers.

J. Loss is direct and accidental loss or damage.

K. Mobile equipment is defined the same way in the Motor Carrier Coverage Form as it is in the Commercial General Liability Coverage Form. The goal is to eliminate gaps in coverage as well as duplicate coverage by defining it the same way in both forms. This works if an insurance company uses only the latest editions of these ISO forms, but it does not if the insurer does not.

Mobile equipment is defined as any of the following types of land vehicles, including machinery or equipment attached to it:

1. Vehicles designed principally for use off public roads. This includes bulldozers, farm machinery and forklifts.

2. Vehicles kept solely for use on or next to premises the named insured owns or rents

3. Any vehicle that travels on crawler treads

4. Any vehicle used primarily to provide mobility to power cranes, shovels, loaders, diggers, drill or road construction or resurfacing equipment. These items must be permanently mounted on the vehicle.

5. Similar to 4 above but not described in 1, 2, 3 or 4, these vehicles provide mobility to air compressors, pumps and generators, spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment along with cherry pickers and similar devices used to raise or lower workers. These items must be permanently installed on the vehicle and cannot be self-propelled.

6. Vehicles not used to transport people or cargo and not described in paragraphs 1, 2, 3 or 4 above but there are exceptions. Any self-propelled vehicle with the following equipment permanently installed is considered an auto and not mobile equipment:

a. Snow removal, road maintenance (excluding construction or resurfacing equipment) or street cleaning equipment

b. Cherry pickers and similar devices used to raise and lower workers but only if the equipment is mounted on an automobile or truck chassis

c. Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting or well servicing equipment Land vehicles subject to a given state's financial responsibility or vehicle registration laws are not mobile equipment. They are considered autos and can be covered using Symbol 79 or as part of Symbol 61.

Note: It is sometimes difficult to distinguish between autos and mobile equipment.

L. Motor carrier is a person or organization in the business of transporting property by auto for hire to enhance the business of commercial enterprises.

M. Pollutants are any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. This definition is consistent in all ISO coverage forms.

N. Private passenger type is a private passenger or station wagon type vehicle. It also includes pickups and vans not used for business purposes.

O. Property damage is not limited to just the damage to tangible property. It also includes any loss of its use.

P. Suit is not limited to just civil proceedings alleging damages. It also includes any arbitration or alternative resolution proceedings as long as the insurance company consents to the proceedings. All allegations must be due to covered bodily injury, property damage or covered pollution costs or expenses.

Q. Temporary workers are neither leased workers nor employees. They are used as substitutes for permanent employees or to meet seasonal or short-term workload conditions.

R. Trailer includes semitrailers or dollies used to convert semitrailers to trailers. With respect to Trailer Interchange Coverage, it also includes containers.

CA 00 20–MOTOR CARRIER COVERAGE FORM ANALYSIS–03 06 Edition

The Insurance Services Office (ISO) developed CA 00 20–Motor Carrier Coverage Form after the motor transportation industry was deregulated in the early 1980s and the relationship between carriers and their customers changed with the introduction of negotiation, contracts and agreements. It is flexible and any motor carrier that operates subject to contracts with its customers can use it.

This analysis is based the 03/06 edition of this coverage form. Changes from the previous edition are in bold print.

SECTION I–COVERED AUTOS

A. Description Of Covered Auto Designation Symbols

61–Any Auto

62–Owned Autos Only

Note: The definition of trailer includes semitrailers, dollies that convert a semitrailer into a trailer, and containers, but only with respect to Trailer Interchange Coverage.

63–Owned Private Passenger Type Autos Only

This symbol means only the named insured's owned private passenger type autos, including those acquired after the inception date.

64–Owned Commercial Autos Only

65–Owned Autos Subject To No-Fault

66–Owned Autos Subject To A Compulsory Uninsured Motorists Law

Note: This symbol does not apply to vehicles licensed or operated in states that allow the named insured to formally reject Uninsured Motorists coverage.

67–Specifically Described Autos

68–Hired Autos Only

69–Trailers In Your Possession Under A Written Trailer Or Equipment Interchange Agreement

70–Your Trailers In The Possession Of Anyone Else Under A Written Trailer Interchange Agreement

Note: The Motor Carrier Coverage Form exclusion for physical damage loss to trailers controlled by other parties does not apply when this symbol is indicated on the declarations.

71–Nonowned Autos Only

79–Mobile Equipment Subject To Compulsory Or Financial Responsibility Or Other Motor Vehicle Insurance Law Only

This symbol applies only to land vehicles considered mobile equipment under the definition of mobile equipment. This symbol was introduced in the 03 06 edition of the Motor Carrier Coverage Form to coincide with this coverage being removed from the Commercial General Liability Coverage Form. It extends Motor Carrier Coverage to mobile equipment but only in states where such equipment is subject to registration and/or licensing laws.

Note: Several issues arise concerning symbol use. From time to time, more than one symbol is needed.

Manuscript Symbol

Example: Hurryup Transport wants liability coverage for all of its owned vehicles and physical damage coverage on all owned vehicles except the concrete mixer it owns and leases to a local not-for-profit masonry contractor for $1.00 a year. The masonry contractor provides all liability and physical damage. As a result, symbol 72 is used for all liability and physical damage coverage. The description/definition for symbol 72 is: "All owned autos, except the concrete mixer."

B. Owned Autos You Acquire After The Policy Begins

1. If Symbols 61–Any Auto, 62–Owned Autos Only, 63–Owned Private Passenger Type Autos Only, 64–Owned Commercial Autos Only, 65–Owned Autos Subject To No-Fault, 66–Owned Autos Subject To A Compulsory Uninsured Motorists Law or 79–Mobile Equipment Subject To Compulsory Or Financial Responsibility Or Other Motor Vehicle Insurance Law Only are used for coverages indicated on the declarations, autos of the type described by such symbols that the named insured acquires during the policy period are also covered.

2. When symbol 67–Specifically Described Autos is used, new autos acquired during the policy period are covered only if the insurance company either covers all vehicles the named insured already owns or if the new vehicle replaces a vehicle already scheduled. In addition, the named insured must inform the insurance company of the acquisition within 30 days of the date it was acquired.

Example: Hurryup Transport has a fleet that includes tractor-trailer rigs and several pickups used for service. Symbol 67 is entered for all coverages provided and only the tractor-trailer units are scheduled. There is no coverage for a new pickup used for service that Hurryup purchases if it does not replace a vehicle already listed and described and coverage is not provided for all owned vehicles.

C. Certain Trailers, Mobile Equipment And Temporary Substitute Autos

When liability coverage is selected based on entries on the declarations, several additional categories of vehicles are added as covered vehicles.

1. Utility trailers having a load capacity of 2,000 pounds or less and designed for travel on public roads are covered while being pulled by a covered auto.

2. Mobile equipment being carried or towed by a covered auto is covered.

Example: Hurryup Transport's is towing a generator that was not properly secured. It falls off, striking and damaging a Volkswagen. Hurryup Transport’s liability coverage responds to the damage to the Volkswagen.

3. If the named insured's covered, owned auto is temporarily out of service for repair or service or due to breakdown, repair, servicing, loss or destruction, a non-owned, temporary substitute for it is covered but only if the named insured uses it with the owner's permission.

Example: Bill, Hurryup’s owner, must drive to another state on business but is concerned because the convertible top in his Miata is stuck in the down position and it looks like it might rain. Bill decides to rent a car for the trip. The rental is not automatically covered if any liability symbol other than 61 was selected. On the other hand, if the car rented was a temporary substitute for the owned vehicle while it was in the repair shop for service, liability coverage applies to it.

SECTION II–LIABILITY COVERAGE

A. Coverage

The insurance company pays amounts an insured is legally obligated to pay as damages because of bodily injury or property damage and certain types of pollution events covered by this insurance caused by an accident and resulting from ownership, maintenance or use of covered autos. It also has the right and duty to defend any insured against suits seeking damages covered by this insurance. It decides how to handle that obligation. It has the right to decide what to investigate, whether the claim is valid, and whether settling the claim or contesting it is appropriate. However, the company no longer has to provide a defense once an action is resolved by payment of a settlement, a court award, or by exhausting the limit of insurance that applies.

Note: An eligible pollution event is covered only if connected to a covered bodily injury or property damage loss.

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.

(1) The owner, employee, agent, or driver of the owner, or any other party the named insured hires or borrows a covered auto from is not an insured.

(2) The named insured's employees or agents are not insureds if the employees, agents or members of their households own the auto.

Note: If the named insured borrows an employee's car to pick a client up at the airport, the employee is not an insured.

(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

(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 members of a limited liability company are covered, as well as lessees and borrowers of autos, including their employees.

Example: Bill allows Jack, one of his friends, to use one of HurryUp’s trucks to move his household property. Jack is not an insured when he loses control of his piano and it strikes his new neighbor.

(5) The named insured's partners, if the named insured is a partnership, or members, if the named insured is a limited liability company, for a covered private passenger auto he or she, or a member of his or her household, owns are not insureds.

c. Owners or others from whom the named insured hires or borrows trailers are insureds but only while the trailers are attached to a covered power unit. If they are not attached, they must be used exclusively in the named insured's business.

d. Any party from whom the named insured hires or borrows a covered auto that is not a trailer used exclusively in the named insured’s business as a motor carrier is not an insured.

e. Parties liable for an insured's conduct as indicated above are insureds to only the extent of that supervisory liability.

The following are not insureds:

a. Other than the named insured and its employees, any trucker and its agents or employees that is:

(1) Subject to motor carrier insurance requirements and does not use auto liability insurance to meet them

(2) Not covered for primary hired autos liability that insures the parties that own the autos and their employees and agents while the hired autos are used exclusively in the truckers business according to operating rights granted to it by a public authority

b. Other than the named insured and its employees, rail, air or water carriers, their employees and agents if bodily injury or property damage occurs when the trailer is not attached to a covered unit the named insured is using and/or is being:

(1) Transported by the carrier

(2) Loaded on or unloaded from any of the carrier's transportation units

Note: One of the important differences in Who Is An Insured in this coverage form compared to the Truckers Coverage Form is the section dealing with the named insured’s business operations. The Truckers Coverage Form specifically refers to the named insured’s business as a trucker and to the operating rights granted by a public authority. The Motor Carrier Coverage Form does not.

2. Coverage Extensions

a. Supplementary Payments

The Motor Carrier Coverage Form provides six supplementary payments.

2006 Change: Previous editions stated that the supplementary payments were in addition to the Limit Of Insurance. The wording was determined to be ambiguous because it was sometimes interpreted to mean that the payments were contingent on activity involving the coverage form's stated policy limits. The intent was merely to inform policyholders that any supplementary payments made did not affect the stated limits. The coverage form now states that such payments do not reduce the limits.

These payments apply to any claim or suit the insurance company defends:

(1) All expenses the insurance company incurs.

(3) The cost of bonds needed to release attachments in a suit filed against the insured that the insurance company defends, but only to bond amounts within the limit of insurance.

(5) All costs taxed against the insured in a suit filed against it that the insurance company defends.

Note: This supplementary payment can provide rather extensive benefits over and above the limits of insurance.

(6) Interest on the full amount of any judgment that accrues after it is entered in a suit against the insured that the insurance company defends.

b. Out-Of-State Coverage Extensions

Example: Hurryup Transport is transporting honeybees from Gary, Indiana to Fort Myers, Florida. Henrietta, Hurryup's driver, has an accident in Jacksonville, Florida. She has the required no-fault coverage but at a minimum limit because of this extension.

B. Exclusions

The insurance provided by this coverage form does not apply to the following:

1. Expected Or Intended Injury

Any bodily injury or property damage the insured expects or intends to cause is excluded.

Example: Suburban Shippers is insured under a Motor Carrier Coverage Form and submitted a serious claim involving Gail, one of its employee drivers. Gail was hurrying to complete her delivery route and was upset that another driver boxed her in by double-parking his vehicle next to hers. Tiring of waiting, she attempted to slowly nudge the other vehicle out of her way but hit the gas pedal too hard and seriously damaged the other vehicle. Suburban's loss notice indicated that the damage caused was unintentional, but the insurance company denied the claim because it resulted from Gail's deliberate decision to try to move the other vehicle.

2. Contractual

3. Workers Compensation

Note: This exclusion and the one that follows are intended to prevent double indemnification for injury that should be covered under workers compensation or employers liability policies.

4. Employee Indemnification And Employers Liability

5. Fellow Employee

6. Care, Custody Or Control

7. Handling Of Property

This exclusion works in conjunction with the ISO Commercial General Liability (CGL) Coverage Form. It provides coverage up to the point where the property is moved to a location where it can be loaded. This exclusion states that coverage does not apply to bodily injury or property damage resulting from handling property before it is physically moved to the point or place where the insured accepts it to be moved into or onto the covered auto. The CGL also provides coverage once the property is delivered. This exclusion states that coverage ceases once the property is moved from the covered auto at the point where the insured makes the final delivery.

8. Movement Of Property By Mechanical Device

Exclusion 7. above and the ISO CGL definition of loading and unloading work in conjunction with this exclusion. It excludes bodily injury or property damage from movement of any property by any mechanical device not attached to the covered auto. Hand trucks are not considered mechanical devices. In other words, loading or unloading by conveyors, mobile carts, forklifts or any other mechanical device other than a handcart is excluded but may be covered by the CGL Coverage Form.

9. Operations

It also excludes bodily injury and property damage losses that involve operation of mobile equipment attached to equipment considered a Symbol 79 type vehicle.

Note: Coverage for this exclusion is available in the ISO CGL Coverage Form.

10. Completed Operations

The insured's work is considered completed whenever the first of any one of the following occurs:

All work called for in the insured’s contract is completed
All work to be done at a job site is completed if the contract calls for work at more than one job site
When that part of the work done at a job site is put to its intended use by any party other than another contractor or subcontractor working on the same project

Note: If the insured's work requires service, maintenance, correction, repair or replacement but is otherwise complete, it is considered complete.

Note: Coverage for this exclusion is available in the ISO Commercial General Liability Coverage Form.

11. Pollution

Coverage does not apply to bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

b. Prior to movement of the pollutant generating property to where the insured receives it in order to move it either into or on a covered auto.

c. After moving the pollutant generating property from the covered auto to the point of the insured’s final delivery.

12. War

This exclusion is rewritten to unequivocally bar coverage for either bodily injury or property damage related to war and similar military events. It is not affected by circumstances such as a formal declaration of war, that the war is a civil uprising, whether it involves government or civilian participants. The bottom line is that there is no coverage for loss related either directly or indirectly to war or warlike activity.

Note: There is no ISO endorsement available to buy back or delete this exclusion at the present time.

13. Racing

There is no coverage for any auto while being used in, practicing or being prepared for any professional or organized racing, demolition contest or stunts.

C. Limit Of Insurance

The most the insurance company pays for the total of all damages, including any covered pollution cost or expense resulting from any one covered accident, is the liability limit of insurance indicated on the declarations. This limit applies regardless of the number of insureds, autos covered, vehicles involved in an accident, premium paid or number of claims made. The limit of insurance is the most paid in any one covered accident, regardless of the number of insureds indicated on the declarations.

SECTION III–TRAILER INTERCHANGE COVERAGE

A. Coverage

1. The insurance company pays amounts the named insured is liable for as a result of damages for loss to non-owned trailers and their equipment while in its custody or that it uses. The coverage provided is based on indicating symbol 48 in the coverage area on the declarations.

a. Comprehensive Coverage

Coverage applies to any source of damage to a covered auto except collision and overturn.

b. Specified Causes Of Loss Coverage

Note: This is limited physical damage coverage because coverage applies only to the causes of loss indicated as opposed to the approach with comprehensive coverage.

c. Collision Coverage

The only covered loss or damage is that caused by the covered auto's collision with another object or its overturn.

Note: Another object could be another vehicle or an animal, bird, person, tree, building or a sign, to name a few.

3. Coverage Extensions

There are five supplementary payments in addition to the Limits Of Insurance.

a. All expenses the insurance company incurs

b. Cost of bonds needed to release attachments. This applies only to bond amounts within the Limit Of Insurance.

c. Reasonable expenses the named insured incurs at the insurance company's request. This includes up to $250 for each day away from work.

d. All costs taxed against the insured in any suit against it that the insurance company defends

e. Interest on the amount of any judgment that accrues after it is entered until the insurance company offers to pay, pays or deposits its part of the judgment with the court.

B. Exclusions

Editor’s note: We have titled a few of the exclusions in this section for analysis purposes. These titles are not part of the Motor Carrier Coverage Form.

1. Coverage does not apply to loss or damage caused by or resulting from the following, regardless of any other cause or event that contributes concurrently or in any sequence to the loss:

a. Nuclear Hazard

This is explosion of any weapon using atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination, regardless of how caused.

b. War Or Military Action

2. Loss Of Use

There is no coverage for loss of use, indirect or consequential loss.

3. Wear And Tear And Tire Damage

Coverage does not apply to loss or damage caused by or resulting from wear and tear, freezing, mechanical or electrical breakdown, blowouts, punctures or other road damage to tires. This exclusion does not apply if such losses are caused by a loss otherwise covered by the Motor Carrier Coverage Form.

C. Limit Of Insurance And Deductible

The most paid for loss or damage to any one trailer in any one accident is the lesser of:

1. The actual cash value of the stolen or damaged property.

Note: The value is based on what the property was worth at the time of the loss, not at the time of adjustment or when it was purchased.

2. The cost to repair or replace the stolen or damaged property with property of like kind and quality

3. The limit of insurance indicated on the declarations

Example: A non-owned trailer in Hurryup's custody has a replacement cost of $20,000. It is covered under a Trailer Interchange Agreement. However, due to its age and condition, its actual cash value is only $5,000. It costs $7,500 to repair it after one of HurryUp's drivers causes it to overturn. The limit of insurance indicated on the declarations is $25,000. In this case, the insurance company pays $5,000, the least of the three amounts.

SECTION IV–PHYSICAL DAMAGE COVERAGE

A. Coverage

1. The insurance company pays for loss to a covered auto and its equipment based on the coverages indicated on the declarations and the symbols the insured selects. When selected, the Truckers Coverage Form provides:

a. Comprehensive Coverage

Coverage applies to any source of damage to a covered auto except collision and overturn and subject to certain exclusions.

b. Specified Causes Of Loss Coverage

Note: Although these are the most common losses, they are very specific, and many others are not covered.

c. Collision Coverage

The only covered loss or damage is that caused by the covered auto's collision with another object or its overturn.

Note: Another object could be another vehicle or an animal, bird, person, tree, building or sign, to name a few.

2. Towing–Private Passenger Vehicles

The insurance company pays for towing and labor costs but only for private passenger autos. The costs must be incurred at the place of disablement.

Note: This means all expenses at the repair shop are excluded.

3. Glass Breakage–Hitting A Bird Or Animal–Falling Objects Or Missiles

Note: This clarifies coverage. The three types of losses indicated could be called collisions because an object struck the vehicle. This is important because an insured might have a smaller deductible on its comprehensive coverage or may carry only comprehensive coverage.

4. Coverage Extensions

a. Transportation Expenses

b. Loss Of Use Expenses

Other than collision, but only if symbol 47 appears for Comprehensive Coverage
Specified Causes Of Loss, but only if symbol 47 appears for Specified Causes Of Loss Coverage
Collision, but only if symbol 47 appears for Collision Coverage

Note: CA 99 90–Optional Limits–Loss Of Use Expenses can be used to provide higher limits.

B. Exclusions

Editor’s note: We have titled some of the exclusions in this section for analysis purposes. These titles are not part of the Motor Carrier Coverage Form.

1. Coverage does not apply to loss or damage caused by or resulting from the following, regardless of any other cause or event that contributes concurrently or in any sequence to the loss:

a. Nuclear Hazard

This is explosion of any weapon using atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination, regardless of how caused.

b. War Or Military Action

2. Excluded Property

a. Trailer Interchange Agreements

Coverage does not apply to covered autos in the possession of another party and the relationship between the named insured and that other party is based on a written trailer interchange agreement.

b. Racing

There is no coverage for any covered auto while used in or practicing or being prepared for any professional or organized racing, demolition contest or stunting activity.

c. Tapes, Records And Discs

d. Speed Detection Devices

There is no coverage for radar and laser jamming, detecting, eluding or disrupting equipment designed or used to detect speed.

e. Receiving And Transmitting Equipment

Any type of electronic equipment used to receive or transmit audiovisual or data signals not designed only to reproduce sound is excluded, whether or not it is permanently installed.

f. Accessories

Coverage does not apply to any accessories used with electronic equipment described in paragraph e.

However, paragraphs e. and f. of this exclusion do not apply to:

Permanently installed sound reproducing equipment and its accessories, subject to it being permanently installed in the covered auto at the time of loss. The same equipment is covered even if it can be removed as long as the auto has a permanently installed housing unit for it. Coverage applies only if the property is designed to operate from the auto’s electrical system.
Other electrical equipment normal to the operation of the covered auto or that monitors the operating system is covered. Coverage also applies if it is integrated into the items described above and is permanently installed in the area normally used for a radio.

CA 99 60–Audio, Visual And Data Electronic Equipment Coverage is a buyback endorsement for physical damage coverage to audio, visual and data electronic equipment excluded in the coverage form. Coverage applies only to equipment that is permanently installed or that can be removed from permanently installed housing units. Autos covered by this endorsement must be scheduled and a $100 deductible applies.

3. Wear And Tear And Tire Damage

4. Diminution Of Value

Loss of a covered auto's value because it was involved in an accident is not covered. Diminution Of Value is defined in Section VI–Definitions.

C. Limit Of Insurance

1. The most paid for loss or damage in any one accident is the lesser of:

a. The actual cash value of the stolen or damaged property

Note: The value is based on what the property was worth at the time of the loss, not at the time of adjustment or when it was purchased.

b. The cost to repair or replace the stolen or damaged property with property of like kind and quality

2. In case of a total loss, adjustments are made for the auto's depreciation and physical condition to establish the actual cash value.

3. If repairing or replacing the auto increases its value, the insurance company does not pay for that increase.

D. Deductible

The insurance company pays for repair, return or replacement of damaged or stolen property for each covered auto minus the deductible amount indicated on the declarations. However, no deductible applies to a fire or lightning loss if an auto has comprehensive coverage.

SECTION V–MOTOR CARRIER CONDITIONS

These conditions are in addition to those in IL 00 17–Common Policy Conditions.

A. Loss Conditions

1. Appraisal For Physical Damage Loss

Note: Even if the insurance company participates in the appraisal process, it still retains the right to deny the claim.

2. Duties In The Event Of Accident, Claim, Suit Or Loss

The insurance company has no duty to provide any coverage under this coverage form unless the named insured fully complied fully with the following duties:

Failure to cooperate can have serious consequences. Although it does not involve commercial auto, this case illustrates what can happen to a party who does not comply with such provisions.

3. Legal Action Against Us

4. Loss Payment–Physical Damage Coverages

The insurance company determines the method to use to settle a physical damage loss. It can:

a. Pay to repair or replace the damaged or stolen property

b. Return the stolen property but bear the expense of returning it. It also pays any damages the auto incurred due to the theft.

c. Pay the appraised or agreed value of the damaged or stolen property and then take any or all of it

Note: Any payment made includes any required sales tax.

5. Transfer Of Rights Of Recovery Against Others To Us

Note: Serious consequences may arise when the named insured impedes the insurance company's right to seek reimbursement from other parties.

B. General Conditions

1. Bankruptcy

Bankruptcy of the insured or its estate does not relieve the insurance company of its obligations under this coverage form.

2. Concealment, Misrepresentation Or Fraud

3. Liberalization

4. No Benefit To Bailee–Physical Damage Coverages

5. Other Insurance–Primary And Excess Insurance Provisions

d. This coverage is primary for any Trailer Interchange Coverage this coverage form provides.

e. Other than as indicated above, this insurance is primary for any covered auto the named insured owns and excess for covered autos it does not own.

g. This coverage is always primary when liability is assumed in an insured contract, regardless of the provisions above.

Note: This supersedes the provisions of paragraph 5.e. above.

Note: Ratios are determined based on each company’s limits as a percentage of all limits available. Losses are proportioned among companies accordingly.

6. Premium Audit

a. The initial premium payment is an estimated premium based on the exposures the named insured indicated at inception. The insurance company calculates the final premium based on the insured's actual exposures. Once that is done, the estimated premium is subtracted, and the first named insured is either billed for the additional amount owed or receives a refund if it overpaid. The billing statement indicates the date additional premium is due.

b. When coverage is issued for longer than a one-year term, the premium is calculated annually based on the insurance company's rates in effect at the beginning of each annual period.

7. Policy Period, Coverage Territory

8. Two or More Coverage Forms Or Policies Issued By Us

SECTION VI–DEFINITIONS

A. Accident includes continuous or repeated exposure to the same conditions that result in bodily injury or property damage.

C. Bodily injury is not only bodily injury sustained by a person but also sickness or disease sustained by a person, including resulting death from any of these.

It does not include cost or expense that arises out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

b. Prior to moving the pollutant generating property to the place where the insured receives it in order to move it either into or on a covered auto.

c. After moving the pollutant generating property from the covered auto to the point of the insured’s final delivery.

2006 Change: This definition was re-worded in an attempt to make it clearer. It now separately states that it refers to costs regarding clean-up, monitoring, testing, etc., required either by a formal request, including those from public officials or statutes, or by a claim or lawsuit from a government unit.

E. Diminution in value is the loss of market value solely due an accident. This loss of value can be actual or perceived.

F. Employee includes leased workers but not temporary workers.

H. Insured contract includes the following:

1. Leases of premises

2. Sidetrack agreements

3. Easement or license agreements. However, contracts in conjunction with construction or demolition operations on or within 50 feet of a railroad are not insured contracts.

4. Obligations required by ordinance when the purpose is to indemnify a municipality. However, this does not apply to any work being done for the requesting municipality.

These contracts or agreements are not considered insured contracts:

b. Any loan, lease or rental contract or agreement where the named insured or its employees borrow, lease or rent an auto with a driver

J. Loss is direct and accidental loss or damage.

Mobile equipment is defined as any of the following types of land vehicles, including machinery or equipment attached to it:

1. Vehicles designed principally for use off public roads. This includes bulldozers, farm machinery and forklifts.

2. Vehicles kept solely for use on or next to premises the named insured owns or rents

3. Any vehicle that travels on crawler treads

a. Snow removal, road maintenance (excluding construction or resurfacing equipment) or street cleaning equipment

b. Cherry pickers and similar devices used to raise and lower workers but only if the equipment is mounted on an automobile or truck chassis

c. Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting or well servicing equipment

Land vehicles subject to a given state's financial responsibility or vehicle registration laws are not mobile equipment. They are considered autos and can be covered using Symbol 79 or as part of Symbol 61.

It is sometimes difficult to distinguish between autos and mobile equipment.

L. Motor carrier is a person or organization in the business of transporting property by auto for hire to enhance the business of commercial enterprises.

N. Private passenger type is a private passenger or station wagon type vehicle. It also includes pickups and vans not used for business purposes.

O. Property damage is not limited to just the damage to tangible property. It also includes any loss of its use.

Q. Temporary workers are neither leased workers nor employees. They are used as substitutes for permanent employees or to meet seasonal or short-term workload conditions.

R. Trailer includes semitrailers or dollies used to convert semitrailers to trailers. With respect to Trailer Interchange Coverage, it also includes containers.

CA 00 20–MOTOR CARRIER COVERAGE FORM ANALYSIS–10 01 Edition

Insureds who transport goods, materials, or commodities for others, need protection for their potentially substantial auto liability exposure. This section will analyze the provisions of the Motor Carrier Coverage Form—CA 00 20 which provides both auto liability and physical damage protection.

Section V—DEFINITIONS contains defined words. Defined words are in quotation marks in this analysis.

Note: Changes that have occurred since previous program editions appear in bold.

10 01 Changes:

1. Loss of Use – Rental Vehicle Coverage. This is added to the policy in Section III – Physical Damage – A. Coverage - 4. Coverage Extension – b. Loss of Use Expenses. This provides payment of up to $20 per day or a maximum of $600 to a rental operation due to damage incurred by the insured.

2. Limited Worldwide Coverage for Hired Autos. This is added to the policy is Section IV- Business Auto Conditions – B. General Conditions – 7. Policy Period, Coverage Territory – paragraph e. This provides liability coverage for private passenger auto that are leased or rented for less than 30 days anywhere in the world. The suit must be adjudicated in the standard territory.

3. Insured Contract definition change. This is accomplished in Section V- Definitions – H. Insured Contract – paragraph 6.a. The term ‘any person or organization’ is replaced by the term ‘a railroad’. By doing this, an insured contract only excludes contracts with railroads for damages arising out of construction or demolition operation within 50 feet of railroad property.

4. Payment for diminution of value has been excluded because of the subjective nature of the claim. A diminution claim assumes that an auto loses value merely because it has been in an accident. The auto policy is not designed to deal with subjective issues and therefore will deny any such claim.

5. The policy’s Limit of Insurance section was revised. It revised how actual cash value is determined so that the insured will not receive any payment beyond like kind or quality.

A revised definition of temporary worker was added. The definition was reworded dramatically, apparently to preserve its original meaning.

SECTION I—Covered Autos

In order to determine which "autos" are covered for each of the policy’s coverages, numerical symbols are used. These symbols correspond to a specific auto definition.

In the declarations of the motor carrier policy, there is a place to show a symbol or symbols next to each of the liability and physical damage motor carrier coverages. Only those coverages that have a symbol(s) shown in the declarations are applicable.

A. DESCRIPTION OF COVERED AUTO DESIGNATION SYMBOLS

61 = ANY "AUTO." This is the broadest of the symbol designations, applying to any "auto."

62 = OWNED "AUTOS" ONLY. This symbol covers any "auto" owned by the insured, including any "auto" that is acquired after the policy begins. For liability purposes, this also covers any "trailer" while it is towed by an owned vehicle. Refer to Section VI—Definitions to understand what is considered a "trailer."

63 = OWNED PRIVATE PASSENGER TYPE "AUTOS" ONLY. This symbol covers only private passenger type "autos" owned by the insured, including any private passenger auto acquired after the policy begins.

64 = OWNED COMMERCIAL "AUTOS" ONLY. This symbol covers any trucks, tractors and "trailers" owned by the insured, including any of the same that are acquired after the policy begins. For liability purposes, this also covers any "trailer" whether owned or not, that is towed by an owned vehicle. Refer to Section VI—Definitions to understand what is considered a "trailer."

65 = OWNED "AUTOS" SUBJECT TO NO-FAULT. Any "auto" owned by the insured that is required to carry no-fault coverage because it is garaged or licensed in a state that has no-fault benefits laws.

66 = OWNED "AUTOS" SUBJECT TO A COMPULSORY UNINSURED MOTORISTS LAW. Any "auto" owned by the insured that is garaged or licensed in a state where that "auto" is required to have uninsured motorists coverage is covered by this symbol.

67 = SPECIFICALLY DESCRIBED "AUTOS." Only those "autos" that are specifically scheduled and for which there is a premium charge shown, are covered. For liability purposes, this also covers any "trailer" whether owned or not, that is towed by an owned, scheduled vehicle.

68 = HIRED "AUTOS" ONLY. This symbol covers "autos" that the insured leases, hires, rents, or borrows, unless the "auto" is leased, hired, rented, or borrowed from an employee, partner (if the insured is a partnership), members (if the insured is a limited liability company), or member of the insured’s household.

69 = TRAILERS IN YOUR POSSESSION UNDER A WRITTEN TRAILER OR EQUIPMENT INTERCHANGE AGREEMENT. When this symbol is used, only "trailers" and related equipment that are in the insured’s possession and for which the insured is legally responsible under a written interchange agreement.

70 = YOUR TRAILERS IN THE POSSESSION OF ANYONE ELSE UNDER A WRITTEN TRAILER INTERCHANGE AGREEMENT. For those insureds who lease, loan, rent, or lend "trailers" to others, this symbol will trigger coverage for owned "trailers" while in the possession of others as long as there is written interchange agreement between the insured and other party.

71 = NONOWNED "AUTOS" ONLY. This symbol covers only those "autos" the insured does not own, lease, hire, rent, or borrow that are used in the insured’s business, including "autos" owned by employees, partners (if the insured is a partnership), members (if the insured is a limited liability company), or members of the insured’s household, but only while those non-owned "autos" are used either in the insured’s business or personal affairs.

Several considerations on the use of symbols should be explored. The first is that in some cases, more than one symbol may be used. For example, regarding liability coverages, the insured may wish to have all commercial vehicles covered, as well as any hired or nonowned vehicles, so symbols 64, 68, and 71 would be shown by the liability coverage on the declarations page. However, if symbol 61 is used for liability, no other symbol is needed, as 61 covers any "auto."

Symbols can be different for coverage within the same policy. Symbol 61 may be used for liability, but symbol 67 used for comprehensive and collision coverage.

Manuscript Symbol. These symbols may be added by the use of endorsement CA 99 54—Covered Auto Designation Symbol. In the event this endorsement is used for the Motor Carrier Coverage Form, symbol 72 is sometimes used to follow suit with the other coverage forms. A complete description of the "autos" that are to be considered covered "autos" must be shown in the endorsement.

Example: An insured wants liability coverage for all of their owned vehicles and physical damage coverage on all owned vehicles except one very high value antique car. For physical damage purposes, the antique car is in a specialty market and has its own policy on that coverage. Symbol 62 is used to designate the covered autos for liability coverage, and symbol 72 is used to designate the covered autos for comprehensive and collision coverages. The definition for symbol 72 is: all owned autos, except the 1959 Classic Mercedes Benz.

For insurers and brokers that have access to coverage for a variety of difficult business auto or trucking situations such as racing activities, refer to the section for Automobiles, Trucks, or Recreational Vehicles in The Insurance Marketplace, published by The Rough Notes Company, Inc.

B. OWNED AUTOS YOU ACQUIRE AFTER THE POLICY BEGINS

1. Automatic coverage for newly acquired vehicles exists under specified conditions. These conditions are clarified by the use of the coverage symbols. If the symbols 61 = Any Auto, 62 = Owned Autos Only, 63 = Owned Private Passenger Type Autos only, 64 = Owned Commercial Autos Only, 65 = Owned Autos Subject to No-Fault, or 66 = Owned Autos Subject to a Compulsory Uninsured Motorists Law are used for coverages as shown in the declarations, then "autos" acquired by the insured during the policy period, of the type described by the symbol, are also covered.

If symbol 64 (Owned Commercial Autos Only) is used and the insured purchases a new tractor during the policy period, coverage is automatic. However, if symbol 64 (Owned Commercial Autos Only) is used and the insured purchases a private passenger vehicle, there is no automatic coverage. The insured would have to specifically request coverage for this vehicle to be added to the policy and change the policy symbol.

2. When symbol 67 (Specifically Described Autos) is used, coverage for newly acquired "autos" within the policy period may be covered if the insurer either covers all the vehicles that the insured already owns or the new vehicle is a replacement for a vehicle already scheduled, and if the insured notifies the insurer within 30 days of the acquisition of the new vehicle regarding coverage or changes desired.

Example: The insured is a trucking operation with a combination of tractor-trailer rigs and also owns a few pickups for service use. Symbol 67 is shown on the insured’s policy and only the tractor-trailer rigs are scheduled. Should the insured purchase a new pickup for service use, there would be no automatic coverage under symbol 67 as the vehicle is not a replacement for a scheduled vehicle.

C. CERTAIN TRAILERS, MOBILE EQUIPMENT AND TEMPORARY SUBSTITUTE AUTOS

When liability coverage has been selected in the declarations, several additional categories of vehicles are considered covered:

1. "Trailers" of the utility type that have a load capacity of 2,000 pounds or less and have been designed for travel on public roads are covered while being towed by a covered "auto."

Example: A semi-trailer is not covered; however, the liability for a utility trailer that the insured rented to transport a piece of machinery is covered while towed by an "auto," as long as the load capacity is under 2,000 pounds

2. "Mobile equipment" while it is being carried or towed by a covered "auto."

Example: A bulldozer owned by the insured is being transported on a flatbed that is being towed by a covered "auto." An accident occurs and the bulldozer overturns onto another vehicle. The liability is covered by the policy covering the towing "auto."

3. When a covered, owned "auto" of the insured is temporarily out of service due to breakdown, repair, servicing, loss, or destruction, then the non-owned, temporary substitute is covered if the insured is using it with the proper permission of the vehicle owner.

Example: The insured has to drive to another state on business but does not want to chance driving that far in the owned, older vehicle that has had mechanical problems. The insured decides to rent a car for the trip. The rental is not automatically covered by the insured’s auto policy (if any symbol other than 41 or 47 was selected for liability). On the other hand, if the car was rented as a temporary substitute while the owned vehicle was in a repair shop for servicing, then liability coverage is provided.

SECTION II—Liability Coverage

A. COVERAGE

The insurer agrees to pay all sums that the insured is legally liable for, including damages that result from "bodily injury," "property damage," or "covered pollution cost or expense" which are covered by this policy, caused by an "accident," and which also results from the ownership, maintenance, or use of a covered "auto." "Covered pollution cost or expense" is covered if it occurs as part of a covered loss. The insurer has the right and the duty to defend the insured for any "suit" for those damages. The insurer may at any time and at the insurer’s discretion, investigate or settle any claim or "suit." The option to settle the claim or loss out-of-court is the insurer’s. The insurer is no longer obligated to continue with providing legal defense when the limit of insurance is spent in payments of either judgments or settlements.

Example: Due to the insured’s negligence in maintaining a large tractor trailer rig, the brakes fail on the rig, and an accident occurs. The accident involved four vehicles and multiple claimants. The insurer, realizing the accident was the fault of the insured, settles out of court with as many of the claimants as the policy limits will provide. Once the policy limits are exhausted, the insurer has no obligation to provide any type of coverage or defense for the remaining claimants and the insured is obligated to bear the entire cost of defense for the remaining "suits" and claims that ensue against them.

1. WHO IS AN INSURED

When comparing the various business auto coverage forms, Who is an Insured is somewhat different for the Motor Carrier Coverage Form, especially when contrasted to the Truckers Coverage Form.

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

b. Anyone else using a covered "auto" that is owned, hired, or borrowed by the named insured and who is operating with the insured’s permission is an insured except:

· The owner, employee, agent, or anyone from that the insured has hired or borrowed a covered "auto" is not covered. In other words, if the insured rents a car from a rental agency, the rental agency is not considered an insured.

· Employees of the insured are not covered if the "auto" belongs to the employee or members of the employee’s household. So, when the insured borrows an employee's car to pick a client up at the airport, the employee is not considered an insured.

· Anyone using a covered "auto" while working in the business of selling, servicing, repairing, parking, or storing "autos" is not covered unless that business is the insured’s. To illustrate, when an employee borrowed a company vehicle to use one night in that employee's part-time auto repair business, that employee was not considered an insured.

· Anyone other than the insured’s employees, partners (if the insured is a partnership), members (if the insured is a limited liability company), lessee, borrower, or their employees, are not covered while moving property to or from a covered "auto.”

· Example: The insured allows a friend to use one of the insured’s company trucks to move household items to a new location. In this case, the friend is not an insured during the loading and unloading process.

· Partners of the insured are not covered if the "auto" is a "private passenger type auto" owned by the partner (if the insured is a partnership), members (if the insured is a limited liability company), or members of the partner’s household. When a partner borrows a spouse’s car for company business, the spouse is not considered an insured.

c. When the named insured hires or borrows a trailer, that person from whom the trailer is hired or borrowed is an insured while the borrowed or hired trailer is attached to a covered power driven “auto.” That same person remains an insured when the trailer is not attached to the unit PROVIDED that unit is for the exclusive use of the named insured’s business.

d. Also covered as an insured, is any party from whom the insured has hired or borrowed a covered "auto" that is not a "trailer," while that covered "auto" is used exclusively in the insured’s business as a "motor carrier."

e. Anyone who is liable for an insured’s conduct is also an insured, but only to the extent of that liability.

There are two exceptions to the above list of insureds:

1. Excluded is any "motor carrier," motor carrier’s agent, or motor carrier’s employee, other than the insured and the insured’s employees:

· If the "motor carrier" is subject to motor carrier insurance requirements and uses means other than insurance to comply

· If the “motor carrier” does not have primary insurance for hired autos.

This does not apply if there is a written lease agreement in which the named insured holds the “motor carrier” harmless.

2. Excluded is any rail, water, air carrier, and their agent or employee, other than the insured and the insured’s employees, for a "trailer," should any "bodily injury," "property damage," or "covered pollution cost" occur while that "trailer" is detached from a covered "auto" and is being transported by the carrier; or loaded on or unloaded by the carrier.

One of the important differences in the "insured" coverage as compared to the Truckers Coverage Form is with the section dealing with the insured’s business operations. The truckers form specifically refers to the insured’s business as a trucker and to the operating rights granted by a public authority. The Motor Carrier Coverage Form does not reference the operation, or the operating rights granted by a public authority.

2. COVERAGE EXTENSIONS

a. Coverage Extensions: Six supplementary payments are provided for, in addition to the limits stated in the limits of insurance. These apply to any claim or "suit" the insurer defends. They are as follows:

1. All expenses the insurer incurs; this item clarifies that the limits of insurance is not reduced by the insurer’s expenses.

2. If a bail bond is required because of accidents or traffic law violations based on the use of any vehicle covered by the bodily injury liability coverage, up to $2,000 is available for the cost of such bonds. Special notation is made to clarify that the insurer is not responsible for furnishing these bonds.

3. Cost of bonds needed to release attachments is provided for when a suit is filed against the insured, if the amount of the bond is within the applicable policy limit. Again, clarification is made that the insurer is not responsible for providing the bonds.

4. If the insurer requests the insured to participate in any investigation or defense, reasonable expenses are provided for the insured. This includes any actual loss of earnings, up to $250 a day, if the insured must take time off work.

5. All costs taxed against the insured in a "suit" filed against the insured; in cases where the court assesses the costs and expense of the trial against the negligent party, this supplementary payment can provide some extensive benefits over and above the policy limits.

6. Interest on the amount of the judgment that has accrued after the judgment has been entered, but before the insurer has paid the judgment or the policy limits, is covered in full for a "suit" filed against the insured.

b. Out-of-State Coverage Extensions: When an insured is away from the state where the "auto" is licensed or garaged, two very important coverage extensions are provided. These extensions, in a real sense, make the insurance provided by the motor carrier policy comply with any state financial responsibility law, no-fault, or other compulsory coverage. The two extensions are as follows:

First, the limit of liability provided is automatically increased, as necessary, to meet the limits specified by a state compulsory or financial responsibility law of the jurisdiction where the covered "auto" is being operated.

One important note to this extension is that it does not cover or comply with any law that governs motor carriers of passengers or property.

Example: A motor carrier policy has a single liability limit of $50,000. This limit complies with the financial responsibility laws of the state where the vehicle is licensed and garaged, but when the "auto" crosses over into the next state, that limit is inadequate. The second state requires a limit of at least $75,000. This extension will automatically increase the limit, without further endorsement, to $75,000 for the temporary period the covered "auto" is being operated in the second state.

The second part of the extension indicates that this policy will provide the minimum amounts and types of other coverages, such as no-fault, that are required by the jurisdiction where the covered "auto" is being used.

Example: The state where the covered "auto" is garaged and licensed does not require no-fault coverage, but when the vehicle crosses into the second state, no-fault coverage is required. With this extension, during the period the "auto" is operated in the second state, the Motor Carrier Coverage Form provides the coverage as required by that state.

A note of clarification states that the insurer will not pay anyone more than once for the same elements of loss because of the extensions provided. In other words, the extensions do not duplicate any coverage, nor do they allow for the collection of damages more than once.

B. EXCLUSIONS

1. Expected Or Intended Injury: Any "bodily injury" or "property damage" that the insured expects or intends to cause, is not covered by this insurance.

The purpose of this exclusion is to protect insurers from being called upon to respond to damages or injuries that an insured intentionally caused. This exclusion is in the public interest to make sure an insured is not using the insurance contract for gain, to inflict injury to competitors, or to be used as an instrument of revenge or cause any other purposeful harm.

The expected and intended wording is currently being challenged and clarified in several court cases across the country. The challenges issued are to clarify that even though the act was intentional, if the resultant damage or injury is greater than expected or intended, will the liability policy respond? Cases that are now before state supreme courts may have an impact on this exclusion and should be watched carefully over the next few years.

There are no current ISO endorsements available to buy back or delete this exclusion.

2. Contractual Damages for "bodily injury" or "property damage" that result from liability the insured has assumed in a contract or agreement, are not covered unless either the contract or agreement is considered to be an "insured contract," or if the insured would have been liable even if the contract or agreement had never occurred.

There are no current ISO endorsements available to buy back or delete this exclusion.

3. Workers Compensation: This insurance does not apply to any requirement or obligation that the insured must assume resulting from any workers compensation, disability benefits, unemployment compensation, or similar type laws.

The extent of this exclusion and the one that follows is to prevent double indemnification for injury that should be covered under workers compensation or employers liability policies.

For insurers and brokers that have access to coverage for a variety of difficult, unusual, or specialty workers compensation situations, refer to the section for workers compensation in The Insurance Marketplace, published by The Rough Notes Company, Inc.

4. Employee Indemnification and Employers Liability: Excluded is any "bodily injury" to an "employee" of the insured, or the spouse, child, parent, brother, or sister of that "employee," as a consequence or result of employment of that "employee" by the insured or while involved in the performance of duties of the "insured’s" business operations. (07-97 Changes: Wording is added to make clear that the "employee" is covered while employed and while performing duties relative to the business operations.)

It is further clarified that the exclusion applies whether the insured is liable as an employer or in any other capacity; or whether the insured is obligated to share damages with or repay someone else, who must pay damages because of the injury. This is a particularly important clarification because of the widespread use of contractors, subcontractors, independent contractors, or leased "employees," and much of the uncertainty with respect to whom is responsible.

There are two exceptions to this exclusion: any "bodily injury" to domestic "employees" that are not entitled to workers compensation benefits is covered, and liability assumed by the insured in an "insured contract" is covered. Domestic employees are defined to be a person that performs household or domestic work primarily for a residence premises.

5. Fellow Employee: No coverage exists for "bodily injury" suffered by any fellow "employee" of the insured. This exclusion applied to injuries related to an employee’s job. This exclusion complements exclusions number 3 and 4.

6. Care, Custody or Control: "Property damage" to or "covered pollution cost or expense" involving any property owned or transported by the insured or in the insured’s care, custody, or control is excluded. Note: An exception is made for liability assumed under a sidetrack agreement.

The Motor Carrier Coverage Form protects the insured for negligence and tort liability to others; it does not apply to damages or injury to the insured. In this manner, it provides an incentive to the insured to maintain their premises and use reasonable care to prevent damage or injury to property in the insured’s care, custody, or control. However, if liability is assumed in a "sidetrack agreement" for property loaned to the insured or for personal property in his or her care, custody, or control of the insured, the exclusion is inapplicable.

A "sidetrack agreement" is one between the owners of a premises and a railroad with respect to a transfer or access track located on the insured’s premises. The railroad will allow use of the sidetrack as long as the property owner guarantees access by the railroad to the sidetrack and agrees to certain conditions of property maintenance. It may also contain specified conditions of hold-harmless between the railroad and property owner.

7. Handling of Property: Excluded is any "bodily injury" or "property damage" from handling of property before it is physically moved to the point or place where it is accepted by the insured to be moved into or onto the covered "auto," or after it is moved from the covered "auto" at the point of final delivery by the insured. Coverage for this exclusion may be sought under the insured’s commercial general liability policy.

8. Movement of Property by Mechanical Device: Excluded is any "bodily injury" or "property damage" from movement of any property by any mechanical device other than a hand truck, unless the device is attached to the covered "auto." In other words, loading or unloading by conveyors, mobile carts, forklifts, or any other mechanical device other than a handcart is not covered by the motor carrier policy. Coverage for this exclusion may be sought under the insured’s commercial general liability policy.

9. Operations: Excluded is any "bodily injury" or "property damage" that results from the operation of any equipment listed in the definition of "mobile equipment" as follows: cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers, air compressors, pumps, and generators, including spraying, welding, building cleaning, geophysical exploration, lighting, or well servicing equipment. Coverage for this exclusion may be sought under the insured’s commercial general liability policy.

10. Completed Operations: Any "bodily injury" or "property damage" that results out of the insured’s work after that work has been completed or abandoned. Work is defined as any work or operations performed by the insured or on the insured’s behalf and includes materials, parts, or equipment furnished in connection with the work or operations. Included in the work of the insured is any warranties or representation made with respect to the fitness, quality, durability, or performance of any of the items defined in the work. The work of the insured is considered completed whenever the first of any one of the following circumstances occur:

a. all the work called for in the insured’s contract is completed

b. all the work to be done at a job site has been completed if the insured’s contract calls for work at more than one job site

c. when that part of the work done at a job site has been put to its intended use by any party other than another contractor or subcontractor working on the same project

If the work of the insured needs service, maintenance, correction, repair, or replacement, but is otherwise complete, it should be considered completed.

Coverage for this exclusion may be sought under the insured’s commercial general liability policy.

11. Pollution: To get a better understanding of what pollution is, we will first look at Section V, where "pollutants" are defined to mean: any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste also includes those materials that are meant to be, but have not yet been recycled, reconditioned, or reclaimed.

Excluded is any "bodily injury" or "property damage" that arises out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of "pollutants:"

a. that are being transported, towed by, handled, or handled for movement into, onto, or from a covered "auto"; that are otherwise in the course of transit by or on behalf of the insured; or being stored, disposed of, treated, or processed in or upon a covered "auto." This includes any "pollutants" that are contained in any property during any of the previously mentioned conditions. There is an exception to this portion of the exclusion. This item does not apply to fuels, lubricants, fluids, exhaust gases, or other similar "pollutants" needed for or as a result of the normal electrical, hydraulic, or chemical function of the covered "auto" or its parts; if the "pollutants" escape, seep, migrate, or are discharged, dispersed, or released directly from an auto part designed by the manufacturer to hold, store, receive, or dispose of such "pollutants;" and if the damages do not arise out of the operation of any equipment listed in the definition of "mobile equipment" as follows: cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers, air compressors, pumps, and generators, including spraying, welding, building cleaning, geophysical exploration, lighting, or well servicing equipment.

b. before the "pollutants" or any property containing the "pollutants" are physically moved to the point or place where it is accepted by the insured to be moved into or onto the covered "auto."

c. after the "pollutants" or any property containing the "pollutants" is moved from the covered "auto" at the point of final delivery by the insured.

The exclusions shown in paragraphs b and c do not apply to any "accident" that occurs away from a premises owned by or rented to any insured with respect to "pollutants" not in or upon a covered "auto" if the "pollutants" or any property containing the "pollutants" is upset, overturned or damaged as a result of the maintenance or use of a covered "auto" and the discharge, dispersal, seepage, migration, release, or escape of the "pollutants" is caused directly by that upset, overturn, or damage.

One endorsement is available to provide a buyback for pollution coverage under a motor carrier policy: CA 99 48—Pollution Liability—Broadened Coverage for Covered Autos—Business Auto, Motor Carrier, and Motor Carrier Coverage Forms. Using this endorsement changes the pollution exclusion for liability in the coverage form by excluding only the liability assumed under a contract or agreement. This endorsement is not applicable in Maine. The additional charge for the use of this endorsement is at the discretion of the insurer.

12. War: No "bodily injury" or "property damage" for any liability assumed under a contract or agreement, resulting from any act, incident, or condition of war, whether declared or undeclared, is covered by the motor carrier policy. War is clarified to include in its definition acts such as civil war, insurrection, rebellion, or revolution.

13. Racing: No coverage exists under the motor carrier policy for any covered "auto" while it is used in, practicing for, or being prepared for any professional or organized racing, demolition contest, or stunting activity.

For insurers and brokers that have access to coverage for a variety of difficult business "auto" or trucking situations such as racing activities, refer to the section for Automobiles, Trucks, or Recreational Vehicles in The Insurance Marketplace, published by The Rough Notes Company, Inc.

C. Limits of Insurance

The most the insurer will pay for the total of all damages including any "covered pollution cost or expense" that results from any one covered "accident" is the limits of insurance for liability coverage shown in the declarations. No other elements of a given loss affect this maximum.

Example: The two named insureds on a motor carrier policy are Smith, Inc. and the individual who owns the corporation, John Smith. The corporation owns several private passenger vehicles that John uses for both business and pleasure. One evening while using a vehicle for pleasure, John has a serious accident that is his fault. The injured party sues both John as an individual and Smith, Inc. as the vehicle owner for $500,000 each, because of the severity of the injury. The motor carrier policy has a limit of liability of $500,000. The claimant is awarded $1,000,000 or $500,000 from each of the named insureds; however, the insurance under the motor carrier policy only pays a total of $500,000.

The definition of "accident" also includes all "bodily injury," "property damage," or "covered pollution cost or expense" related to a continuous or repeated exposure to substantially the same conditions.

The final paragraph of the section applying to limits of insurance clarifies that no one is entitled to receive duplicate payments for the same elements of "loss" under the Motor Carrier Coverage Form, any coverage part, or any endorsement attached to this coverage part.

SECTION III—Trailer Interchange Coverage

A. COVERAGE

The insurer agrees to pay the amounts that the insured becomes liable for damage to a non-owned "trailer" and related equipment. The coverage only applies if the damage takes place while the insured possesses or controls the property.

Three physical damage coverage options available under this legal liability physical damage coverage are:

1. Comprehensive Coverage—damage from any cause except the "trailer’s" collision with another object or the "trailer’s" overturn

2. Specified Cause of Loss Coverage—damage from fire, lightning, explosion, theft, mischief, or vandalism

3. Collision Coverage—damage caused by the "trailer’s" collision with another object or the "trailer’s" overturn

The insurer has the right and the duty to defend the insured against eligible lawsuits, though payment or settlement ends the obligation.

COVERAGE EXTENSIONS

Five supplementary payments are provided for in this endorsement. These supplementary payments are in addition to the Limits of Insurance stated in the declarations. They are as follows:

1. All expenses the insurer incurs. This item clarifies that the limits of insurance are not reduced by the insurer’s expenses.

2. Cost of bonds needed to release attachments is provided for, if the amount of the bond is within the applicable policy limit.

3. If the insurer requests the insured to participate in any investigation or defense, reasonable expenses are provided for the insured. This includes any actual loss of earnings, up to $100 a day, if the insured must take time off work.

4. All costs taxed against the insured in the suit; in cases where the court assesses the costs and expense of the trial against the negligent party, this supplementary payment can provide some extensive benefits, over and above the policy limits.

5. Interest on the amount of the judgment that has accrued after the judgment has been entered, but before the insurer has paid the judgment or the policy limits, is covered in full.

B. EXCLUSIONS

1. Excluded is any coverage for, caused by, or resulting from the following, regardless of any other cause, event that contributes concurrently, or in any sequence to the "loss":

a. Nuclear Hazard: the explosion of any weapon using atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination, no matter how caused.

b. War or Military Action: war, whether declared or undeclared, civil war, warlike action by a military force that includes acts of defense or to hinder any such insurrection, rebellion, revolution, usurped power, or any action to hinder or defend against such.

2. Not covered is any Loss of Use.

3. Excluded is coverage for "loss" caused by or that results from the following: wear and tear, freezing, mechanical or electrical breakdown, or from blowouts, punctures, or other road damage to tires; however, if any of the previous are caused by a "loss" that is covered by this coverage form, then the exclusion does not apply.

C. LIMITS OF INSURANCE AND DEDUCTIBLE

Three clarifications exist with regard to the Limits of Insurance and the application of the deductible as they apply to the Trailer Interchange Coverage. The most that they will be paid by the insurer for "loss" or damage to any one "trailer," is the least of the following minus the applicable deductible as found in the declarations:

· the actual cash value of the damaged or stolen property at the time of the "loss"

· the cost to repair or replace the property with like kind and quality

· the Limits of Insurance as shown in the declarations

Example: A non-owned "trailer" covered by an interchange agreement, has a cost new of $8,000. Due to its age and condition, the actual cash value is only $2,000. To repair the "trailer" after it has been involved in a collision with a tree, in which the insured is determined to be liable, would cost $3,500. The limit of insurance as shown in the declarations for this coverage is $10,000. The insurer would pay only $2,000. This is the least of the three items listed.

However, if more than one "trailer" is involved in the collision, the insured would have up to $10,000 available for each "trailer." So, the $10,000 is not the total to be paid, but the maximum for any one "trailer."

SECTION IV—Physical Damage Coverage

A. COVERAGE

1. The insurer will pay for "loss" to a covered "auto" and its equipment for the following coverages if they have been selected in the declarations and a symbol has been inserted showing the covered "autos":

a. Comprehensive Coverage: any cause except collision by the covered "auto" with another object or overturn of the covered "auto."

This coverage is similar in response to the special cause of loss coverage provided in property or inland marine policies and covers all types of physical damage losses unless excluded.

b. Specified Causes of Loss Coverage caused by:

· fire, lightning, or explosion

· theft

· windstorm, hail, or earthquake

· flood

· mischief or vandalism

· sinking, burning, collision, or derailment of any conveyance transporting the covered "auto"

This coverage is a limited physical damage coverage in that only those causes of loss that are specified are covered, unlike the comprehensive which covers all causes of loss unless excluded.

c. Collision Coverage: caused by the covered "auto's" collision with another object or overturn of the covered "auto."

Another object is not limited to just another vehicle, but could be an animal, bird, person, tree, building, sign, or so forth.

2. Towing: The insurer will pay up to the limit shown in the declarations for towing and labor costs incurred as a result of the disablement of a covered private passenger type "auto"; however, the labor must be performed at the place of disablement.

An endorsement available for additional or broader coverage is CA 99 23—Rental Reimbursement Coverage. When a covered "auto" that has been scheduled in the endorsement has suffered a physical damage loss from a covered cause of loss, as indicated in the endorsement by the insertion of a premium, rental reimbursement is provided for that "auto" subject to the maximum limit shown for any one day, the number of days indicated, and the total amount shown for any one period. Several limitations or exclusions apply, such as the exclusion stating that if other spare or reserve "autos" are available, the coverage does not apply. The formula for the computation of the increase in premium is found in the ISO Motor Carrier Rating Program.

3. Glass Breakage—Hitting a Bird or Animal—Falling Objects or Missiles: When comprehensive coverage is carried by the insured, the insurer will pay for glass breakage, "loss" caused by hitting a bird or animal, and "loss" caused by falling objects or missiles, under the comprehensive coverage. If a glass "loss" occurs as a result of the covered "auto’s" collision or overturn, the insured has the option of covering the glass "loss" under the collision coverage.

4. Coverage Extension: There are now two extensions. Loss of Use Expenses is added with the 10 01 edition.

a. Transportation: If a covered private passenger type "auto" carries comprehensive or specified causes of loss coverage and a theft occurs to that covered "auto," this extension provides coverage for temporary transportation costs when the theft is a total theft of the covered vehicle. If items such as tires are the only things taken, this extension is not available. Coverage is available for the period that begins 48 hours after the theft and ends when the covered "auto" is returned to use or the insurer pays for its "loss," regardless of when the policy expires. The amount of coverage is up to $20 per day with a maximum amount available of $600. Note that the rates went from $15 to $20 per day and the maximum amount increased from $450 to $600.

b. Loss of Use Expenses: If Hired Auto Physical Damage has been purchased then this policy will pay the expenses and must pay under a written rental contract or agreement. The coverage depends on the coverage selected for any covered "auto" on the policy declarations. This is limited to $20 per day and $600 maximum. Higher limits may be purchased with endorsement CA 99 90.

B. EXCLUSIONS

1. Excluded is any coverage for, caused by, or resulting from the following, regardless of any other cause, event that contributes concurrently, or in any sequence to the "loss":

a. Nuclear Hazard: the explosion of any weapon using atomic fission or fusion, or nuclear reaction, radiation or radioactive contamination, no matter how caused

b. War or Military Action: war, whether declared or undeclared, civil war, warlike action by a military force which includes acts of defense or to hinder any such insurrection, rebellion, revolution, usurped power, or any action to hinder or defend against such

The wording in the first sentence of this exclusion is intended to clarify that the doctrines of concurrent causation and proximate cause do not apply to the nuclear hazards and war or military action exclusions. These type "losses" are excluded no matter how caused or whether or not in combination with any other cause of "loss."

2. A number of separate type situations are excluded under item 2 of exclusions. Most of these are similar to the Business Auto Coverage Form, although listed in different order. One additional exclusion of note applies to the Motor Carrier Coverage Form as compared to the business auto coverage form. That is the first of the individual exclusions as listed below:

Excluded is any covered "auto" that is in any other party’s possession under a written trailer interchange agreement. However, if a loss payee is involved, the loss payee is not excluded. The insurer will pay the loss payee, but then the insured must reimburse the insurer for any payment made.

No coverage exists under the motor carrier policy for any covered "auto" while it is used in, practicing for, or being prepared for any professional or organized racing, demolition contest, or stunting activity.

The following property is not covered:

· tapes, records, discs, or other similar audiovisual equipment, or data electronic devices designed for use with such type equipment

· equipment designed or used to detect, locate, jam, or disrupt any type of speed measurement devices including but not limited to radar or laser devices. (07-97 Changes: Wording is added to make clear that any type of detection, location, jamming or other devices of any type that disrupt speed measurement are not covered.)

· any electronic equipment, whether or not permanently installed, that receives or transmits audiovisual or data signals and that is not designed solely for sound reproduction

· any accessories used with the electronic equipment described in paragraph c

However, the exclusion for electronic equipment and accessories do not apply to:

· equipment and its accessories designed only for sound reproduction that is permanently installed in the covered "auto" at the time of "loss" or if that equipment is removable from a permanently installed housing unit, and which the equipment is designed to operate only off the power of the "auto’s" electrical system

· any other electrical equipment that is normal to the operation of the covered "auto," that monitors the operating system, or that is an integral part of the same unit housing any sound reproduction equipment and permanently installed in the opening of the dash or console normally used by the manufacturer for installation of a radio

An endorsement available to provide this coverage is CA 99 30—Tapes, Records and Discs Coverage. For the additional premium stated, this endorsement extends physical damage coverage for tapes, records, and discs in covered "autos" for up to $200. The formula for the computation of the increase in premium is found in the ISO Motor Carrier Rating Program.

An option to the above is CA 99 60—Audio, Visual and Data Electronic Equipment Coverage. This is a buyback endorsement for physical damage coverage to audiovisual and data electronic equipment that is excluded in the coverage form. This buyback applies only to the equipment that is permanently installed or which is removable from a housing unit that is permanently installed. Those "autos" that are covered by this endorsement must be scheduled and a $100 deductible applies. The formula for the computation of the increase in premium is found in the ISO Motor Carrier Rating Program.

3. Excluded is coverage for "loss" caused by or that results from the following: wear and tear, freezing, mechanical or electrical breakdown; or from blowouts, punctures, or other road damage to tires; however, if any of the previous are caused by a "loss" that is covered by this coverage form, then the exclusion does not apply.

There are no current ISO endorsements available to buy back or delete this exclusion. The insured should consider checking into the special warranty, labor, and replacement programs that are available through many dealerships for this protection.

4. The diminution of value does not add to the loss. The term diminution of value is defined in Section V Definitions.

Example: The insured has a collision loss and the vehicle is repaired. The repair shop explains to the insured that their car is now worth less than before the loss just because people will not pay as much for a car that has been in an accident. The insured presents that perceived loss of value to the company and is denied.

C. Limits of Insurance

This section has been revised significantly as an attempt to clarify. Two new sentences are added to make sure the insured is only brought back to the condition the car was in prior to any accident.

The maximum amount that the insurer will pay for "loss" in any one "accident" is the lesser of the following:

the actual cash value of the damaged or stolen property, at the time of the "loss"
the cost to repair or replace the damaged or stolen property with other property of like kind and quality.

Adjustments must be made for physical condition and depreciation to determine the actual cash value

If fixing the auto increases the value, the company does not pay for that betterment.

One endorsement, CA 99 28—Stated Amount Insurance, is available to amend the limit of liability for physical damage coverages. For those vehicles that are scheduled in the endorsement, the limit for the physical damage coverages is changed to the least of the actual cash value, the cost to repair or replace, or the limit that is specified in the endorsement schedule. The formula for the computation of the increase in premium is found in the ISO Motor Carrier Rating Program.

D. DEDUCTIBLE

The insurer will pay for repair, return, or replacement of damaged or stolen property for each covered "auto," minus the deductible shown in the declarations. The comprehensive coverage deductible shown in the declarations does not apply to "loss" caused by fire or lightning.

SECTION V—Motor Carrier Conditions

All of the conditions listed in Section V are in addition to the conditions found in the Common Policy Conditions—IL 00 17.

A. LOSS CONDITIONS

1. Appraisal for Physical Damage Loss: If the insurer and the insured do not agree to the amount of the "loss," either party may demand an appraisal. When this occurs, each party selects a competent appraiser. Those appraisers will then select a competent and impartial umpire. Each appraiser will separately state the actual cash value and amount of "loss." If the two appraisers do not agree, the umpire will review their appraisals. When any two of the three agree, all parties are bound by the decision. The insurer and the insured will each pay the cost of their own appraiser but will share the expense of the umpire and other costs.

Even though the insurer has submitted to an appraisal, the insurer retains the right to deny the claim.

2. Duties in the Event of Accident, Claim, Suit, or Loss:

The insurer has no duty to provide any coverage under this coverage form unless the insured has complied fully with the following duties:

a. When any of these events occur, the insured must give either the insurer or an authorized representative of the insurer prompt notice of such, including:

· how, when and where the "accident" or "loss" occurred;

· the insured’s name and address; or

· if known, the names and addresses of any injured persons or of any witnesses.

b. Any involved insured must:

· under no circumstances, make any obligation, payment, or incur any expense without the insurer’s consent. To do so is at the insured’s expense.

· immediately send the insurer copies of any request, demand, order, notice, summons, or legal paper received regarding the claim or "suit"

· cooperate with the insurer in the investigation, settlement of the claim or defense of the "suit" provide the insurer with authorization to obtain all medical records or other pertinent information

· as often as the insurer reasonably requires, the insured must submit to examination by a physician of the insurer’s choice and at the insurer’s expense

c. If any physical damage loss occurs to a covered "auto" or its equipment, the insured must also do the following items:

· notify the police promptly of any theft of a covered "auto" or its equipment

· take all reasonable steps to protect the covered "auto" from further damage and keep a record of any expenses to be considered in the settlement of the claim

· before the insurer repairs or provides disposition of the claim, the insured must allow the insurer to inspect the covered "auto" or any necessary records to prove "loss"

· agree to examination under oath if requested by the insurer and provide the insurer with a signed statement of those answers

3. Legal Action Against Us: No one may bring legal action against the insurer under this coverage form until:

a. there has been full compliance with all terms of this coverage form

b. with respect to any liability coverage provided in this insurance, the insurer agrees in writing that the insured has an obligation to pay, or the amount of that obligation has been determined by judgment after trial. No one has the right under this policy to bring the insurer into any action to determine the insured’s liability.

4. Loss Payment—Physical Damage Coverages: The insurer has the option to determine which of the following methods will be used for payment of "loss":

a. to pay for, repair or replace the damaged or stolen property

b. return the stolen property, at the insurer's expense; the insurer will also pay for any damages that result to the "auto" from the theft

c. take all or any part of the damaged or stolen property at an agreed or appraised value

Any payment made will include sales tax, where applicable.

5. Transfer of Rights of Recovery Against Others to Us: If the insurer has made payments to a party under this coverage form, any rights that party may have to recover from another are transferred to the insurer, and that party receiving payment must do everything necessary to secure the rights of the insurer to recover, doing nothing to impair those rights.

B. GENERAL CONDITIONS

1. Bankruptcy: Even if the insured or the estate of the insured becomes bankrupt or insolvent, the insurer is still obligated under this coverage part and not relieved of any responsibilities.

2. Concealment, Misrepresentation, or Fraud: This coverage form is void in any case of fraud by the insured at any time as it relates to this coverage form. It is also void if the insured or any other insured at any time intentionally conceals or misrepresents material facts concerning:

a. this coverage form

b. the covered "auto"

c. the insured’s interest in the covered "auto"

d. a claim under this coverage form

3. Liberalization: If the insurer revises this coverage form by providing broader or more coverage without an additional premium charge, the insured’s policy will automatically provide the additional coverage as of the day the revision is effective in the insured’s state.

4. No Benefit to Bailee—Physical Damage Coverages: The insurer does not recognize any assignment or grant any coverage for the benefit of any party while holding, storing, or transporting property for a fee, regardless of any other provision of this coverage form.

5. Other Insurance—Primary and Excess Insurance Provisions:

Most of the conditions found in the Motor Carrier Coverage Form are similar to that of the Truckers Coverage Form. However, one significant difference appears with this Condition as it applies to hire or borrowed covered "autos."

a. For covered "autos" owned by the insured but hired or borrowed by another "motor carrier" from the insured, coverage under this insurance is:

· primary when a written agreement exists between the insured and the lessee which requires the insured to hold the other "motor carrier" (lessee) harmless; or

· excess over any other collectible insurance when the insured is not required to hold the lessee harmless.

b. When the insured hired or borrows a covered "auto" from any other "motor carrier," this insurance is:

· primary if a written agreement exists between the insured (lessee) and the other "motor carrier" (lessor) but does not require the lessor to hold the insured harmless. This primary coverage applies only when the covered "auto" is used exclusively by the insured in the insured’s operations as a "motor carrier" for hire; but the coverage is

· excess over any other collectible insurance if a written agreement between the insured (lessee) and the other "motor carrier" (lessor) exists which requires the lessor to hold the insured harmless.

c. For covered "autos" that is a "trailer" and is connected to another power unit (self-propelled vehicle), the liability coverage provided for the "trailer" is excess when connected to a vehicle not owned by the insured and primary when connected to a covered, owned "auto."

d. If trailer interchange coverage is provided in this coverage form, then it is primary for any covered "auto."

e. This coverage form is primary insurance for any covered "auto" owned by the insured and excess insurance for any covered "auto" that is not owned by the insured, with the exceptions made and explained in the first four paragraphs of this condition.

f. If hired auto physical damage coverage applies, then any covered "auto" the insured leases, hires, rents, or borrows is considered an owned, covered "auto," unless that "auto" is leased, hired, rented, or borrowed with a driver.

g. In spite of the provisions of paragraph a through e, liability coverage in this coverage form is primary for any liability that has been assumed in an "insured contract."

h. When any other insurance covers the "loss" on the same basis, regardless of whether primary or excess, the insurer will only pay their share. The insurer’s share is the proportion that the limits of insurance of this coverage form bears to the total of the limits of all coverage forms and policies that apply on the same basis.

6. Premium Audit:

a. The deposit or estimated premium charged for this coverage form has been based on the exposures the insured conveyed to the insurer at policy inception. The insurer will compute the final premium based on the actual exposures of the insured. The estimated premium will be credited against the actual final premium and the first named insured will be billed for any balance. If the estimated premium exceeds the actual final premium, the first named insured will receive any refund.

b. If the policy is issued for more than one year, the premium charged will be computed annually based on the rates of the insurer that are in effect at the beginning of each year of the policy.

7. Policy Period, Coverage Territory: The insurer will cover "accidents" and "losses" under this coverage form involving a covered "auto" that occur:

a. during the policy period shown in the declarations

b. within the coverage territory

The coverage territory, including while being transported between any of these places, is:

· the United States of America

· the territories and possessions of the USA

· Puerto Rico

· Canada

Example: An insured covered by a motor carrier policy has a vehicle stolen from a salesperson at a hotel in Arizona. The insured carries comprehensive coverage so the theft of the vehicle is covered, as it occurred in Arizona during the policy period. However, the thief drove the vehicle into Mexico where the thief was involved in a major accident. One of the parties injured in the accident in Mexico tries to make a claim against the vehicle owner under the owner’s motor carrier policy. The claimant alleges that the owner was negligent in not properly preventing theft from occurring. The vehicle had no anti-theft devices or alarms. Whether or not the insured is found to be negligent and liable, the motor carrier policy will not respond to the liability claim because the accident occurred in Mexico (outside the covered territory). The insurer denies the liability claim on that basis but makes payment for the theft of the vehicle.

e. Worldwide coverage is provided if:

· The covered auto is leased, rented or hired for a period of less than 30 days

· The responsibility to pay is determined in the territories listed in a., b., c. or d. above

8. Two or More Coverage Forms or Policies Issued by Us: Except for those policies issued specifically as excess policies, if this coverage form and any other coverage form or policy issued to the insured by the insurer and any company affiliated with the insurer apply to the same "accident," the maximum amount that will be paid for the total limits of insurance under all the coverage forms or policies shall not exceed the highest applicable limits of insurance under any one coverage form or policy.

Example: The insured has three policies with the insurer, all carrying Symbol 1 = Any Auto for Liability Coverage. Policy one has a Liability limit of $1,000,000, policy two has a Liability limit of $500,000 and policy three has a Liability limit of $750,000. The total amount available to pay losses from any one accident is the highest of any one of the three policies or $1,000,000 and not the accumulated limit of $2,250,000.

SECTION VI—Definitions

The following definitions come directly from the coverage form itself and apply specifically to the motor carrier policy.

A. "Accident": includes continuous or repeated exposure to the same conditions that result in "bodily injury" or "property damage."

B. "Auto": a land motor vehicle, trailer, or semi-trailer designed for travel on public roads; this definition does not include "mobile equipment."

C. "Bodily Injury": bodily injury, sickness, or disease sustained by a person, including death, which results from any of these.

D. "Covered Pollution Cost or Expense": any cost or expense arising out of a request, demand, or order; or statutory or regulatory requirement or a claim or "suit" by or on behalf of a governmental authority demanding that the insured or others test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize, or in any way respond to or assess the effects of "pollutants."

It does not include any cost or expense arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of "pollutants":

1. that are contained in any property that is being transported or towed by, handled, or handled for movement into, onto, or from the covered "auto"; otherwise in the course of transit by or on behalf of the insured; being stored, disposed of, treated, or processed in or upon the covered "auto"

2. before the "pollutants" or any property in which the "pollutants" are contained are moved from the place where they are accepted by the insured for movement into or onto the covered "auto"

3. after the "pollutants" or any property in which the "pollutants" are contained are moved from the covered "auto" to the place where they are finally delivered, disposed of, or abandoned by the insured

Paragraph 1 does not apply to fuels, lubricants, fluids, exhaust gases, or other similar "pollutants" needed for or resulting from the normal electrical, hydraulic, or mechanical functioning of the covered "auto" or its parts, if:

a. the "pollutants" escape, seep, migrate, or are discharged, dispersed, or released directly from an "auto" part designed by its manufacturer to hold, store, receive, or dispose of such "pollutants"

b. the "bodily injury," "property damage," or "covered pollution cost or expense" does not arise out of the operation of the following equipment listed in the definition of "mobile equipment": cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and air compressors, pumps, and generators, including spraying, welding, building cleaning, geophysical exploration, lighting, or well servicing equipment

Paragraphs 2 and 3 do not apply to "accidents" that occur away from premises owned by or rented to an insured with respect to "pollutants" not in or upon a covered "auto" if the "pollutants" or any property in which the "pollutants" are contained are upset, overturned, or damaged as a result of the maintenance or use of a covered "auto"; and the discharge, dispersal, seepage, migration, release, or escape of any of the "pollutants" is caused directly by such upset, overturn, or damage.

E. "Diminution in value" is the loss of market value solely due an accident. This loss of value can be actual or perceived.

F. "Employee": a leased worker is considered as an employee, but a temporary worker is not. (07-97 Changes: This is a newly added definition.)

G. "Insured": any party qualifying as an insured in the Who is An Insured provision of the applicable coverage. Except with respect to the limit of insurance, the coverage afforded applies separately to each insured who is seeking coverage or against whom a claim or "suit" is brought.

H. "Insured contract":

1. a lease of premises

2. a sidetrack agreement

3. any easement or license agreement, except in connection with construction or demolition operations on or within 50 feet of a railroad

4. an obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality

5. That part of any other contract or agreement pertaining to the insured’s business (including an indemnification of a municipality in connection with work performed for a municipality) under which the insured assumes the tort liability of another to pay for "bodily injury" or "property damage" to a third party or organization. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement.

6. That part of any contract or agreement entered into as part of the insured’s business, pertaining to the rental or lease by the insured or employees of the insured, of any "auto." However, such contract or agreement shall not be considered an "insured contract" to the extent that it obligates the insured or any of the insured’s employees to pay for "property damage" to any "auto" rented or leased by the insured or any of the insured’s employees.

An "insured contract" does not include that part of any contract or agreement:

a. that indemnifies any railroad for "bodily injury" or "property damage" arising out of construction or demolition operations, within 50 feet of any railroad property and affecting any railroad bridge or trestle, tracks, road beds, tunnel, underpass, or crossing

b. that pertains to the loan, lease, or rental of an "auto" to the insured or any of the insured’s employees, if the "auto" is loaned, leased, or rented with a driver

c. that holds a party engaged in the business of transporting property by "auto" for hire, harmless for the insured’s use of a covered "auto" over a route or territory that party is authorized to serve by public authority

I. "Leased Worker": a person leased to the insured employer by a labor leasing firm in which there is an agreement between the insured and that labor leasing firm for that employee to perform specified duties relevant to the conduct of the insured’s business operations. Not included as a leased worker is a “temporary worker."

J. "Loss": direct and accidental loss or damage

K. "Mobile Equipment": any of the following types of land vehicles, including any attached machinery or equipment:

1. bulldozers, farm machinery, forklifts, and other vehicles designed for use principally off public roads

2. vehicles maintained for use solely on or next to premises the insured owns or rents

3. vehicles that travel on crawler treads

4. vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted power cranes, shovels, loaders, diggers, or drills; or road construction or resurfacing equipment such as graders, scrapers, or rollers

5. vehicles not described in paragraphs 1, 2, 3, or 4 that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types: air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting, and well servicing equipment; or cherry pickers and similar devices used to raise or lower workers; and vehicles not described in paragraphs 1, 2, 3, or 4 maintained primarily for purposes other than the transportation of persons or cargo

However, self-propelled vehicles with the following types of permanently attached equipment are not "mobile equipment" but will be considered "autos":

· equipment designed primarily for snow removal; road maintenance, but not construction or resurfacing; or street cleaning

· cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers

· air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting, or well servicing equipment

L. "Pollutants": any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste includes materials to be recycled, reconditioned, or reclaimed.

M. "Private Passenger Type": includes private passenger or station wagon type "auto" and any pickup or van type not used for business purposes.

N. "Property damage": damage to or loss of use of tangible property.

O. "Suit": a civil proceeding in which damages, due to "bodily injury," "property damage," or a "covered pollution cost or expense," to which this insurance applies are alleged.

"Suit" includes an arbitration proceeding alleging such damages or "covered pollution cost or expense" are claimed and to which the insured must submit or does submit with the insurer’s consent; or any other alternative dispute resolution proceeding in which such damages or "covered pollution costs or expenses" are claimed and to which the insured submits with the insurer’s consent.

P. "Trailer": includes semi-trailer

Q. "Trucker": any person or organization engaged in the business of transporting property by "auto" for hire.

R. "Temporary Worker": a person furnished or used by the insured to substitute for a permanent employee or to meet short-term situations.

(This wording has been changed significantly in 10 01 but the overall intent remains unchanged.)

COMPARE: CA 00 20–MOTOR CARRIER COVERAGE FORM 03 10 EDITION TO THE 03 06 EDITION

INTRODUCTION

This is a summary of the changes made in the 03 10 edition of CA 00 20–Motor Carrier Coverage Form. Most of the changes reduce coverage.

SECTION II–LIABILITY

A.2. Supplementary Coverage

This is a reduction in coverage because attorney’s fees or expenses taxed against the insured by the courts are specifically not covered.

B. Exclusions

5. The Fellow Employee exclusion is broadened to also exclude coverage for any consequential damage claims by relatives of an injured fellow employee.

SECTION III–TRAILER INTERCHANGE COVERAGE

A.3. Coverage Extensions

This is a reduction in coverage because attorney’s fees or expenses taxed against the insured by the courts are specifically not covered.

B. Exclusions

3. Wear And Tear And Tire Damage is amended to apply only if damage is confined to the described causes of loss. The exclusion also does not apply when the entire vehicle is stolen. The prior edition did not use the word confined but the exclusion did not apply if any cause of loss occurred first or at the same time and there was no specific reference to the auto being stolen.

Note: This could be considered more of a clarification of coverage than a reduction.

C. Limit Of Insurance

The deductible portion of this item is now a separate item in order to clarify how it is applied.

D. Deductible (03 10 addition)

This new items explains that the deductible must be subtracted from the actual cash value of the damaged vehicle. The cost to repair or replace the vehicle is reduced by the deductible amount. The amount paid is reduced by the deductible before applying the limit of insurance.

SECTION IV–PHYSICAL DAMAGE COVERAGE

B. Exclusions

The last two items of the Excluded Property exclusion have major changes.

2. e. Receiving And Transmitting Equipment

The exception for equipment used solely for reproducing sound is eliminated. This is a reduction in coverage.

2.f. Accessories

Accessories used with equipment covered under item 2.e are also reduced because coverage for accessories used with equipment that reproduces sound is eliminated.

3. Exceptions To Exclusion 2.e. and 2.f.

This is a new exclusion. It was previously part of Exclusion 2. It details the items excepted from Exclusions 2.e and 2.f. In order for the exception to apply, the item must operate only from the auto’s electrical system and meet any of the following criteria at the time of loss:

Be permanently installed in or on the covered auto
Not be permanently installed but be removable only from a housing unit permanently installed in or on the covered auto
Be an item considered integral to items described in a. or b. above
Be other electrical equipment normal to the operation of the covered auto or that monitors the operating system

4. Wear And Tear And Tire Damage

This exclusion is rewritten to apply only if damage is confined to the described causes of loss. The exclusion also does not apply when the entire vehicle is stolen. The prior edition did not use the word confined but the exclusion did not apply if any cause of loss occurred first or at the same time. There was no specific reference to the auto being stolen.

C. Limit Of Insurance

A $1,000 sub-limit that applies to the items described as covered under Excluded Property Exclusion 3. Exceptions To Exclusion 2.e. and 2.f. is added. This change means that, although coverage might be provided, the total amount of damages paid is limited to $1,000. This could be a significant reduction of coverage.

COMPARE: CA 00 20–MOTOR CARRIER COVERAGE FORM 03 10 EDITION TO THE 03 06 EDITION KNOWLEDGE TESTER QUIZ

QUESTIONS

1. What change was made to the Fellow Employee exclusion under Liability Coverage?

2. What identical change is in both the Trailer Interchange Section and the Liability Section?

3. What identical change is in both the Trailer Interchange Section and the Physical Damage Section?

4. Explain the impact of the Physical Damage Section Exclusion changes when coupled with the introduction of the sub-limit in the Limit of Insurance.

ANSWERS

1. The Fellow Employee exclusion was broadened to also exclude coverage for any consequential damages claims by an injured fellow employee's relatives.

2. Supplementary Payments in both sections eliminates attorney’s fees or expenses taxed against the insured by the courts.

3. The Wear And Tear And Tire Damage exclusion in both sections is rewritten to apply only if damage is confined to the described causes of loss. The exclusion also does not apply when the entire vehicle is stolen. The prior edition did not use the word confined but the exclusion

4. did not apply if any cause of loss occurred first or at the same time. There was no specific reference to the auto being stolen.

5. A $1,000 sub-limit that applies to the items described as covered under Excluded Property Exclusion 3. means that, although coverage might be provided, the total amount of damages paid is limited to $1,000. This could be a significant reduction of coverage.

Comparison Of The 1997 Motor Truck Carriers Program To The 1993 Motor Truck Carriers Program

The ISO Motor Truck Carriers Program and related state supplements have recently been revised to add clarity and make the programs more consistent and compatible with other commercial and business policies such as the Commercial General Liability Policy and the NCCI Workers Compensation and Employers Liability Insurance Policy.

The revised coverage forms and endorsements carry a July 1997 edition date, with the first batch of states implementing the program revisions as of October 1, 1997.

The following are a list of the changes made, grouped by the affected area of the contract that the change was made to. The state supplements are not reviewed here.

Coverage Revisions

Under the Physical Damage Coverage—Coverage Extensions, a change has been made to the coverage extension for Transportation Expense, by adding the word temporary and thus making it clear that if transportation expenses are incurred by an insured after a total theft of a covered vehicle, the coverage extension provides only temporary transportation expenses. Although these may appear to be a reduction in coverage, it is only a clarification and thus, no rate change is contemplated. One question still arises, however. Temporary has not been defined. What is the explanation of temporary - a week, a month, a quarter, a year? Hopefully, future revisions will provide clarity.

The Supplementary Payments coverage has been corrected to read that the protection is for suits against the insured clarifying that it is the insured, not the suit, that is covered. Similar wording in the condition outlining the Duties In the Event Of Accident, Claims, Suit or Loss has been amended. The insured must cooperate with the insurer in any investigation or settlement of the claim or defense against the suit. (“Defense against the suit” is the added wording.)

An increase in coverage has been made to Supplementary Payments. The maximum daily payment for loss of earnings by the insured under this item has been increased from $100 per day to $250 per day. The limit for the cost of bail bonds has also been raised to $2,000 from the previous $250.

Who Is An Insured has been amended to include protection for Limited Liability Companies (LLC).

Exclusions—Which Have Changed And How?

Exclusion #4 applies to Employee Indemnification and Employer’s Liability. Within this exclusion, there is an exclusion to the exclusion, which basically means that the exclusion does not apply to domestic employees. However, the term “domestic employees” has never been defined within the contract. A definition has been added to the exclusion to spell out what is meant by the term “domestic employee.” It refers to persons who perform duties connected and within a personal residence, such as a gardener, butler, maid or cook.

This exclusion was strengthened by adding new wording. It clarifies that not only is bodily injury to an employee resulting from employment by the insured excluded, but so is bodily injury to an employee who is injured while involved in an activity related to an insured's business activities.

Exclusion #5—Fellow Employee has been similarly strengthened and revised by the addition of almost identical wording.

Under the Physical Damage Exclusions, the item pertaining to radar equipment or other such equipment that is designed to detect or locate radar, has been revised. It now excludes devices to locate or detect speed (which now include both radar and laser equipment) as well as devices that are designed to elude or disrupt speed measurement (jammers).

Conditions That Have Been Updated Or Revised

The Duties in the Event of Accident, Claim, Suit Or Loss condition was changed. The wording makes clear that the insurer has no obligation under the contract until the insured has fully complied with the outlined duties.

Definitions—New

The following new definitions have been added:

Employee—although an actual definition for employee itself has not been added, it is made clear that a leased worker is considered an employee, but a temporary worker is not.

Leased Worker—means a person that has been leased to the insured by a labor-leasing firm where there is an agreement between the insured and the labor leasing firm for that employee to perform the duties necessary to the insured’s business operations.

Temporary Worker—is a person furnished to the insured for a specific or finite time period, the purpose being to support or supplement the insured’s work force for a special work-related situation. These special work-related situations are defined to include employee absences, temporary skill shortages, and seasonal workloads.

New Endorsements Added

CA 20 47—Additional Insured—Lessor of Leased Equipment

Provides protection for the owner of leased equipment for the existence hazard only, as it applies to the non-auto exposure under the Garage Coverage Form, for equipment that has been leased to an insured garage or repair shop.

CA 20 48—Designated Insured

Allows an additional insured to be specifically named as an additional insured for vicarious liability. Note that this coverage is already to be provided under the WHO IS AN INSURED provision in the business auto policies as protection is granted for any party that is liable for the actions or conduct of a covered insured, but only for the extent of that particular liability, so this endorsement only allows that party to be scheduled or specifically named. This endorsement may be used with any of the business auto coverage forms.

CA 23 24—Agricultural Produce Trailers - Seasonal

Use of this endorsement provides liability coverage for farm trailers that are used only seasonally to haul agricultural produce but not livestock. The 2,000-pound limit does not apply to this endorsement. The dates of the seasonal period and the specific produce must be scheduled.

CA 23 25—Coverage For Injury To Leased Workers

Coverage for bodily injury to leased workers is added by changing the definition of employee in Exclusion #4, Employee Indemnification and Employer’s Liability. The revised definition for employee, for the purposes of this endorsement, does not mean leased employee. The end result of the change is that while the insured’s employees are excluded, leased workers are not (and are thus covered). This endorsement may be used with any of the business auto coverage forms.

Revised Endorsements

CA 02 40—Suspension of Insurance

Wording has been added with respect to underinsured motorist coverage (UIM), to make it flexible enough to apply whether combined with uninsured motorist coverage (UM) or as a stand-alone option. The following three endorsements are also amended accordingly.

· CA 20 15—Mobile Equipment

· CA 20 21—Snowmobiles

· CA 20 27—Registration Plates Not Issued For A Specific Auto

Further, the Suspension of Insurance endorsement has added a blank line in order for an insurer to insert a coverage not listed that may also be suspended by that particular state law.

CA 20 19—Repossessed Autos

A simple correction has been made to this endorsement to add space to show a limit for any unlisted locations and to specify how the coverage applies to the specific locations listed.

CA 23 17—Truckers—Intermodal Interchange Uniform Endorsement Form UIIE-1

Various changes have been made in response to the Uniform Intermodal Interchange and Facility Access Agreement (UIIA) by the Intermodal Association of North America (IANA).

CA 99 10—Drive Other Car Coverage—Broadened Coverage For Named Individuals

The mandatory $50 collision deductible has been deleted.

CA 99 28—Stated Amount Insurance

A simple revision has been made to clarify that the stated deductible applies to this endorsement.

CA 99 37—Garagekeepers Coverage

The excess coverage option is amended to clarify that the Direct Coverage Options are not mutually exclusive of the underlying legal liability coverage. Further, coverage may apply even when the insured is not legally liable.

Conclusion

Numerous other editorial changes, corrections, and clarifications have been made to many of the coverage forms and endorsements. Those discussed above are just the most significant. Please review all of the new forms and endorsements prior to using them to make sure that the changes and revisions are clearly understood.

Comparison Of The 1997 Motor Truck Carriers Program To The 1993 Motor Truck Carriers Program Knowledge Tester Quiz

Questions

1. What are the three new definitions that have been added to the coverage form?

2. What change has been made to provide for a limited liability company?

3. Discuss the revision to the physical damage exclusion involving radar equipment.

4. How and where in the coverage form can protection be added for leased workers?

5. Explain the change to the physical damage coverage extension for transportation expense.

Answers

1. The following new definitions have been added:

Employee—although an actual definition for employee itself has not been added, it is made clear that a leased worker is considered an employee, but a temporary worker is not.

Leased Worker—means a person that has been leased to the insured by a labor leasing firm where there is an agreement between the insured and the labor leasing firm for that employee to perform the duties necessary to the insured’s business operations.

2. Who Is An Insured has been amended to include protection for Limited Liability Companies (LLC).

3. It now excludes devices to locate or detect speed (which now include both radar and laser equipment) as well as devices that are designed to elude or disrupt speed measurement (jammers).

4. Coverage for bodily injury to leased workers is added by changing the definition of employee in Exclusion #4, Employee Indemnification and Employer’s Liability. The revised definition for employee, for the purposes of this endorsement, does not mean leased employee. The end result of the change is that while the insured’s employees are excluded, leased workers are not (and are thus covered.) This endorsement may be used with any of the business auto coverage forms.

5. Under the Physical Damage Coverage—Coverage Extensions, a change has been made to the coverage extension for Transportation Expense, by adding the word temporary and thus making it clear that if transportation expenses are incurred by an insured after a total theft of a covered vehicle, the coverage extension provides only temporary transportation expenses. Although these may appear to be a reduction in coverage, it is only a clarification and thus, no rate change is contemplated.