Business automobile provides coverage for bodily injury or property damages your business may become liable for as a result of the operation or use of a variety of motor vehicles. It may also provide physical damage protection – Comprehensive and collision – for your business on specifically listed vehicles.
Terms Defined
Types of vehicles which may be covered include…
Any Auto
This includes coverage for owned, non-owned, and hired autos. Provides automatic coverage for autos the insured newly acquires. Not to be used for No-Fault, Medical Payments, Uninsured or Underinsured Motorists, or Physical Damage coverage.
All Owned Autos
Applies only to autos owned by the insured, and for liability coverage on any non-owned trailers while attached to power units the insured owns. This provides automatic coverage for autos the insured newly acquires. Used for Liability, Medical Payments, Uninsured and Underinsured Motorists, or Physical Damage coverage, except Towing and Labor.
Owned Private Passenger Autos
Provides automatic coverage for private passenger autos the insured newly acquires. Used for Liability, Medical Payments, Uninsured and Underinsured Motorists, Physical Damage, or Towing.
Owned Autos Other Than Private Passenger
Provides automatic coverage for autos other than private passenger the insured newly acquires. Used for Liability, Medical Payments, Uninsured and Underinsured Motorists, and Physical Damage except Towing.
All Owned Autos Which Require No-Fault Coverage
Provides automatic coverage for autos the insured newly acquires where no-fault is required by law. Used only for P.I.P. and Additional P.I.P.
Owned Autos Subject To Compulsory U.M. Law
Provides automatic coverage for autos the insured newly acquires where rejection of U.M. is not permitted by law.
Autos Specified On Schedule
Applies only to those autos described on the schedule for which a premium charge is shown, and for liability coverage on any non-owned trailers while attached to power units the insured owns. Provides no automatic coverage for autos the insured newly acquires. The company must be notified of newly acquired autos within 30 days. Used for all coverage.
Hired Autos
Applies only to those autos leased, hired, rented or borrowed by the insured. This does not include any auto leased, hired, rented or borrowed from any of the insured’s employees or members of their households. Can be used for all coverage except no-fault, towing, and labor. For medical payments, this symbol applies only to funeral directors.
Non-Owned Autos
Applies only to those autos not owned, leased, or hired by the insured which are used in connection with the insured’s business. Used only for liability coverage.
Other Coverages Which Can Be Included
Bodily Injury
Bodily injury liability coverage pays for damages you, or your business, are legally liable for resulting from injuries or death to others related to the ownership or operation of covered vehicles.
Medical expenses, loss wages, and court cost are among the types of expenses covered through bodily injury coverage.
Collision
Pays for damage to or the loss of automobiles from upset or collision with another object. A deductible applies. Collision is when the insured runs the vehicle into something.
Combined Single Limits vs. Split Limits
Liability insurance limits for Bodily Injury and Property Damage coverage may be purchased either under a single limit for both, or a separate (split) limit for each.
Example:
Combined single limit may be $500,000.00 for both Bodily Injury and Property Damage.
You are liable for an accident causing $300,000 of medical bills and $200,000 of property damage. Since the combined damages are equal or less than the combined single limit of $500,000, your insurance pays all the bills.
Split Limits may be $250,000 per person and $500,000 per occurrence for Bodily Injury and $100,000 per accident for Property Damage.
You cause the same accident. If the $300,000 in medical bills are for a single person, your insurance will only pay $250,000. Since you have only $100,000 in Property Damage, $100,000 is the amount your insurance company will pay.
Comprehensive
Pays for damage to or the loss of automobiles from perils other than collision. Causes of loss include fire, theft, vandalism, glass breakage, etc. A deductible applies.
Deductible
A deductible is the amount of loss the insured pays in a claim before the insurance company makes any payment. The purpose of a deductible is to discourage small claims that the insured can manage as a normal cost of doing business.
The larger the deductible an insured accepts, the lower the premium charge.
Hired Automobile
Covers liability for the use of hired automobiles in your business.
Hired Physical Damage
Hired Physical Damage covers comprehensive and collision claims when you rent a car for business use.
This coverage does not apply to non-owned vehicles.
Medical Payments
Provides payment up to the covered amount for injury regardless of fault.
Non-Owned Automobile
Covers liability for the use of non-owned automobiles in your business. An example would be an employee using his/her own car on an errand for you.
Property Damage
Property damage liability coverage pays for damages you, or your business, are legally liable for resulting from damage to the property of others related to the ownership or operation of covered vehicles.
Damage to the other party’s property and legal costs associated with the event are among the types of expenses covered through property damage coverage.
Towing and Labor
Towing and Labor pays up to the stated coverage dollar amount when a covered vehicle needs a tow due to mechanical breakdown on the road.
Uninsured Motorists
Protects you when you are hit by someone who is at fault but has no insurance.
If Your Business Provides Employees Cars
Broad Form Drive Other Car – Coverage applies to employees or executives of a company or any other person who is supplied a company vehicle, but who does not own a personal vehicle, thereby not having personal automobile coverage.
