q&a on commercial automassagent.com/events/17web/book_covers17/qanda... · commercial client...

Q&A on Commercial Auto

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covered. It is provided with the understanding that the publisher is not engaged in rendering legal,

accounting, or other professional service. If legal advice or other expert assistance is required, the

services of a competent professional person should be sought.

With special thanks to the Insurance Services Office, Inc. for advance information, continued support,

and permission to use their forms and information.

Q and A

on

Commercial

Auto

with

Irene Morrill, CPCU, CIC, ARM, CRM, LIA, CPIWVice President of Technical Affairs

Massachusetts Association of Insurance Agents

1

Partnerships and auto non-ownership

My insured has a BAP on their partnership – say A and B partnership.

The partnership owns and insures two vehicles – 2 sports cars. Sometimes the partners allow their spouses to drive these vehicles. 1) Would the spouse be covered when doing so

2) When the spouse has the partnership vehicle then the partner takes the spouse’s personally owned vehicle. Should the partner have an accident when driving the spouse’s vehicle, will the BAP respond to that claim?

2


The answer will be the same for all the BAP editions …2006, 2010, 2013

BAP liability covers “insureds” for “covered autos”

An insured is …you anyone using a covered autoyou own/hire or borrow with your permission

Spouse using partnership vehicle with permission would be an insured3



What partner using spouse’s vehicle for business of partnership?

If liability is activated by “1” or 7,8,9 will the BAP respond if there is an accident?

4



What partner using spouse’s vehicle for business of partnership?

If liability is activated by “1” or 7,8,9 will the BAP respond if there is an accident?

5



The symbols might provide a “covered auto” …but we still need an “insured”

The partnership will be an “insured” under the BAP if has symbol “1”Or symbol “8” and “9” – depending on how you determine this partner’s spouse owned vehicle … but the partner is NOT an insured when using a vehicle he/she owns or owned by household member

6



If carrier paid out claim …

it could subrogate back against partner which would be horrific ….

7

Listing all drivers…or not

BAP carrier has guidelines about driver experience, several carriers depending on the tier/voluntary you are in you have to have at least 4 yrs driving experience.

Customer calls as they have kid or inexperienced driver on occasion, the kid is listed on a personal auto policy paying a premium however just in case they drive one of the bap vehicles they ask to list them.

The carriers want us to take one of the vehicles and cede the vehicle, the one the kid will drive. Sometimes its multiple vehicles and the kid may not drive one specifically, sometimes it might be. Every scenario is different.

8


I understand they don’t want the exposure of an inexperienced driver and want to collect premium. I am not looking for the customer to circumvent the system, I want to do what is right and want to make sure they are covered.

My question is, it’s a permissive state so if the insured didn’t add their kid and they did have an accident could they deny coverage?

I know the map is very specific.

I know I have seen a few incidents where employers have had a driver have an accident, the driver not listed, the company pays and then addresses the driver after the fact.

9


The MM 99 11 – MA amendatory endorsement to the ISO BAP rewrites the concealment provision and states:

10


And ….MA law … on fraud applies to agents as well as clients who don’t tell “all” when asked

It is better to put a vehicle in CAR …then have claims denied or ….go to jail.11

Certificates and what to say

Does it matter

on a cert if we

put all autos

instead of

scheduled

autos??

12


I’m not sure I understand….

Are you saying you want to ask for symbol 1 for liability instead of

symbol 7,8,9?

That would be up to insurance company

Are you asking if on the certificate you can state “all autos” …

when the symbols are 7,8,9 and not “1” for liability …

absolutely NOT as symbol 1 and symbol 7,8,9 are NOT the same

thing …

close but not the same

13


14


This is what

ACORD says

15


That is exactly what I am asking they have symbol 7,8, & 9

but the insured wants the cert to say any auto

is that allowed

NOPE – because symbol 1 and symbol 7,8,9 is NOT the

same thing

They have scheduled autos, non-owned autos and hired

autos but NOT “all autos”

16


MGL 175L Certificates of Insurance states

17



18



19



20

Trailers only …owned when do they need to be listed for liability ?

We are having a discussion in the office …some say all trailers have to be listed and paid for on the BAP and others say not all …who is correct?

21


The BAP states:As long as there is a vehicle listed for liability and a premium charged for liability on the Dec page then all owned trailers with a load capacity of 2000 lbs or less is automatically covered

22


The BAP states:We are NOT talking GVWR

The load capacity could be 1950 lbs and the weight of the trailer itself could be 200 lbs which means combined weight of 2150. This would then be bumped up to 3000 lbs by RMV and weight for 3000 lbs charged …but trailer is automatically covered by BAP for liability

23


The BAP states:

This is evidenced by class code pages …

Trailer with up to 2000 LOAD capacity …has a factor of “0” for liability Last I learned …anything multiplied by “0” is …. “0”

24

Trailers and BAP

Ok so regarding trailers (just like a small boat trailer, etc)I know whoever is pulling the trailer (regardless if it is their trailer or not) their insurance would respond for liability.

What if whoever is pulling the trailer (that they did not own) and their insurance did not respond…

Would the owner of the trailer’s insurance company respond?

25

Trailers and BAP

My client has a commercial auto policy only…

He may borrow his sons trailer, and the commercial auto will not respond

So will the son’s MAP policy respond?

26

Trailers and BAP

Well…first …who said the BAP won’t respond to a non-owned trailer?

The BAP can provide liability coverage for a non-owned trailer as long as liability is purchased for the power unit pulling it… even the “worst” symbol activating liability coverage under the BAP … symbol 7 – provides coverage for a non-owned ATTACHED trailer:

27

Trailers and BAP

And … if BAP liability is either symbol 1 …

or if symbol 7 one ALWAYS sells symbol 8 and 9 …

8 could provide coverage when NOT attached

28

Trailers and BAP

The definition of “auto” includes trailer ….

So …the BAP should ALWAYS be providing liability to a non-

owned/hired auto … 29

Trailers and BAP

FYI …the MAP could also be there for your client

The MAP states under the Your Auto definition …

Under Parts 1, 2, 3, 4, 5 and 6 the term “your auto” also includes any trailer not described on the Coverage Selections Page as covered under those Parts.

30

Trailers and BAP

And the definition of trailer is:

And …both Parts 4 and Parts 5 of the MAP grant insured status to someone using “your auto”

6. Trailer – means a vehicle designed to be pulled by a private passenger auto, motorcycle, pick-up truck, van, or similar vehicle and designed for use on public roads. This includes a farm wagon or a farm implement.

We will also pay if someone else using your auto with your consent is legally responsible for the accident.

31

Trailers only …can it have a BAP?

Commercial client (that has no commercial auto policy) called me to certify a trailer registration that is in the name of the company.

[They will be donating the use of the trailer to provided free food, water etc. to first responders, such as on duty police.]

How does one certify a registration, when there is no policy?

32

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.kuipers.com.au/fire-fighting-vehicles&ei=dQ5ZVO3sG8muogTNhICoAg&psig=AFQjCNEHeGmpXJ-6jGbZ7AJ834p2EJzTUA&ust=1415208924620969


Hmmmmmm…..

If the load capacity of the trailer is over 2000 lbs ... liability is not free ... So there would be a premium ...

I assume it would have to be ceded...

The question is … CAR take it if you can’t get a company to do it voluntarily ?

33


Per John MetcalfeAdministrator of Residual Market Services

“The answer is yes. The trailer is required to be registered and have a plate so it can be written on a commercial auto policy (TTT).

34

Newly acquired vehicles and the BAP

I have a question for you in regards to a commercial auto policy.

We have an insured that has commercial with Company X and he has purchased a new vehicle that he will register and insure on the commercial auto policy under the company name.

He has purchased the vehicle in Maryland private sale.

He is still driving the car with the MD plates on it because the title has not been released from the lienholder yet.

35


I have asked Company X several times if he is covered under his policy and they keep telling me

no because it’s not registered.

I took a commercial class back in 2009 so need some refresher on this.

I thought that if you purchased a new vehicle and are adding it to the commercial auto policy you have the same coverage as what is on the policy now and 30 days of coverage.

Is that not true?

36


If there is a current BAP … and symbol 7 activates all coverage…the BAP states regarding additional vehicles and/or replacement vehicle … states:

B. Owned Autos You Acquire After The Policy Begins1. If Symbols 1, 2, 3, 4, 5, 6 or 19 are entered next to a coverage in Item Two of the

Declarations, then you have coverage for "autos" that you acquire of the type described for the remainder of the policy period.

2. But, if Symbol 7 is entered next to a coverage in Item Two of the Declarations, an "auto" you acquire will be a covered "auto" for that coverage only if:a. We already cover all "autos" that you own for that coverage or it replaces an

"auto" you previously owned that had that coverage; andb. You tell us within 30 days after you acquire it that you want us to cover it for

that coverage.

37


Additional auto …gets the coverages that currently apply to ALL owned autos.

If the current BAP only shows ONE vehicle …then a second vehicle will have all the coverages of the vehicle currently showing on the dec page … for 30 days

If it is a replacement vehicle …meaning you’ve lost possession of the one currently showing on the BAP dec page …then a replacement vehicle gets the coverage of the vehicle it replaced …for a 30 day max …

38


Registration is NOT discussed …

From a “get a ticket standpoint” …Massachusetts does NOT recognize temporary plates from other states

And if it is a replacement vehicle …one can only put the plate on a newly acquired vehicle if one has lost possession of the one that we showed on dec page …for a maximum of 7 days …

Insurance lasts longer

39

The BAP and renting vehicles …how does coverage apply when an employee rents a vehicle for business purpose

Coverage for the employer when an employee rents an auto on a business trip in the employee’s name

1. Possible coverage under the MAP

2. Possible coverage under the employer’s BAP

3. Is the employee covered under the BAP when renting a vehicle in personal name FOR a business purpose?

Coverage for the employer when an employee rents an auto in the employer’s name

Coverage for the employee when an employee rents an auto in the employer’s name

BAP and renting vehicles

40

Where does the employer find coverage when an employee rents a vehicle on a business trip?

Irene rents a car in her name

Could MAIA, or any employer, be responsible for the actions of their employees during the course of employment?

How do we protect the liability exposure of the employer?

YES!!!

BAP


41

Part 4

We will pay only if you, or a household member, is legally responsible for the accident. We will also pay if someone else using your auto with your consent is legally responsible for the accident.

Part 5

Under this Part, we will pay damages to people injured or killed in Optional Bodily accidents if you or a household member is legally responsible for Injury to Others the accident. We will also pay damages if someone else using your auto with your consent is

legally responsible for the accident.

MAP does NOT provide insured status for “vicarious” liability situations

Must be physically using it to be an “insured”


42

Coverage for the EMPLOYER can be obtained

a. Through the BAP or

b. Similar type endorsement added to the client’s Businessowners Policy if no BAP is present


43


Irene works for MAIA. She needs to rent a vehicle to bring books to the CIC program in Burlington, Vermont.

She rents a Ford Taurus station wagon from Tuesday afternoon until Saturday afternoon.

The vehicle is rented in her personal name –for the purpose of MAIA

44

Each coverage provided under the BAP applies to “covered autos”.

1. What a “covered auto” is will be determined by the symbol used to activate coverage on the BAPDeclarations page.

2. There are two ways to provide liability coverage for autos that are not owned by but are being used for the purpose of the named insured under the BAP.


There is BAP coverage for employerLiability coverage for autos that are not owned or leased by the named insured, MAIA

45

Symbol (1) is the BEST way. Symbol 1 under the BAP defines a covered “auto” as any auto.

Symbol 1 can only be used to define “covered auto” for Liability Coverage

Any auto means all owned autos, all newly acquired autos, all hired or borrowed autos,

Symbol 1 will provide employer with liabilitycoverage when employee rents a vehicle for abusiness trip


46

Under the Liability coverage in the BAP, the definition of Who Is An Insured reads as follows:

MAIA, the you, with Symbol 1 will find coverage under its BAP should it be sued due to an employee renting an auto in the employee’s name for a business purpose.

If Symbol 1 cannot be procured from the insurance carrier, then the employer would need to make sure that Symbol 9 shows on the BAP Declarations page next to Liability Coverage.

The following are “insureds”:

a. You for any covered “auto”.b. Anyone else while using with your permission a covered “auto” you

own, hire or borrow except:

1. The owner or anyone else from whom you hire or borrow a covered “auto…..

2. Your “employee” if the covered “auto” is owed by that “employee” or a member of his/her household. ………


47

Symbol 9 states that covered autos are Non-owned “autos” only

As long as either Symbol 1 or Symbol 9 shows as activating Liability Coverage, then the employer will be protected from suits that arise when an employee on a business trip rents a vehicle in his/her name.


48

Is the employee covered under the employer’s BAPwhen

he/she rents a vehicle in his/her own personal name for the purpose of his/her employer?

(I rent car in my name for business trip for MAIA)


49

1. NO!!!!

2. The BAP symbols of either 1 or 9 ONLY protect the YOU, the named insured employer, not the employee.

3. The definition of insured for those other than You only applies to

“anyone else while using with your permission a covered “auto” you own, hire or borrow”.


50

A vehicle rented by the employee is NOT a vehicle:a. Owned by the named insured employerb. Hired by the named insured employer, or c. Borrowed by the named insured employer

Therefore, the BAP will not apply to the employee in this situation as the vehicle was not owned by, hired by or borrowed by the named insured.


51

Consider this … Irene causes an accident while working for the Association. The Association is sued and the BAP responds.

1. Since Irene is NOT an insured under the BAP, could the BAP carrier SUBROGATE against Irene???????

2. Can we create “insured” status for the employee under the employer’s BAP?

YES

YES


52

Possible solution to making employee an insured under employer BAP when employee rents vehicle in his own name for business trip


53

This endorsement definitely allows the BAP to include an employee using his/her own vehicle for the purpose of the employer as an “insured”.

This endorsement could allow the BAP to apply to an employee renting a vehicle in his/her name on behalf of the employer.


54

Possible solution #2 to making the employee an insured under the employer’s BAP CA 20 54 Employee Hired Autos

Makes employee an insured for hired autos ONLY – no other situation

If have hired auto physical damage symbol 8 – will apply to this endorsement too


55

Finding coverage when the Vehicle is rented in the employer’s name – for the employer and the employee

Instead of renting the car in my name I get the MAIA creditcard and rent the vehicle in the name of the MAIA.

Will MAIA have liability coverage for hired and borrowed autos?

Will I be covered using a vehicle hired or borrowed by my employer under the BAP?

What symbol activates coverages?

YES!


56

For liability would need symbol 1

Orsymbol 8 activating coverage


57

As long as MAIA has symbol 8 activating liability coverage then it will be covered when it rents a vehicle as well as the employee using the vehicle.


58

If symbol 8 activates coll/comp then BAP will respond to a vehicle rented to the named insured…and permissive users would not be subrogated against should there be a claim

Will the BAP provide physical damage coverage for the vehicle rented in the name of the employer?

Hired auto physical damage coverage is NOT automatic


59

Some companies have “company specific” endorsement for hired auto physical damage

And …remember …if have symbol 8 activating Collision and comprehensive coverage …then that activates coverage under the CA 20 54 Employees Hired Autos for physical damage …as well as the liability previously discussed


60

Where is the policy territory for rental?

1. What if the business trip rental was in Washington, DC?

2. What if the business trip rental was in London, England?


61

MAP –

Loss in Washington DC covered

Loss in London England is NOT


62

BAP 10/01 and BAP 3/06

Worldwide rental less than 30 days … without driver …

ASSUMING PROPER SYMBOLS ACTIVATE COVERAGE


63

buy vehicle online

My insured called ... He has a BAP and is buying another vehicle ... online... from someone in California.

He will be sending certified check to a lawyer who will pay for the vehicle upon transfer of title.

Then the vehicle will be shipped.

What should we do about coverage?

64

buy vehicle online

Good news ...if he has a BAP ...there is automatic coverage for a newly acquired vehicle....

I "assume" that he currently has symbol (7) activating all coverages on his BAP.

A newly acquired additional auto ...gets the coverage if ALL owned vehicles ...have that coverage ...for 30 days.

65

buy vehicle online

66

buy vehicle online

MM 99 11

67

buy vehicle online

68

buy vehicle online

69

Mutt and Jeff are delivering a refrigerator to Irene. When lifting it out of the back of the truck, they drop it and it falls on a neighbor who stopped to watch.

Will the BAP respond to the injury to the neighbor?

70

Yes … BAP covers BI done when loading or unloading property by hand , hand truck or mechanical device attached to the truck as no exclusion

Loading and unloading

Mutt and Jeff are bringing the refrigerator into Irene’s house. They must bring it up a small flight of stairs to reach the kitchen.

While bringing it up the stairs they damage the hard wood flooring on the stairs. Will the BAP respond to this damage?

71

Yes … BAP covers PD done when loading or unloading property by hand , hand truck or mechanical device attached to the truck


Will it cover the damage TO the refrigerator

72

NO … BAP excludes PD to property in c/c/c


Loading and unloading …covered or not

We have a client with a ceded commercial auto policy who is a transport ambulance company. They were carrying a patient up the stairs in a wheelchair and the patient shifted her weight and they lost their grip on the wheelchair causing her, in the wheelchair, to go down the stairs. She was 88 at the time of the accident.

73


We have since gotten legal notice and the auto carrier has denied saying it is not loading or unloading for the distance from the vehicle (I don’t believe that reason as there is nothing in the form I can see that says anything about distance it says to it’s intended location, this would be her apartment) The GL carrier is denying because of an exclusion for loading and unloading.

74


From what I read the form shows bodily injury and property damage for loading and unloading but does not specify if it has to be something other then what is being carried.

The attorney is also suing the insurance company sighting case Travelers vs Aetna 410 Mass (1991). I have not been able to pull up this case to know what it is about but apparently it is the auto carrier vs the gl carrier for a loading unloading situation and the attorney is therefore inferring precedence.

75

What are they talking about ….sounds like the wrong exclusion is being used ……

The liability section of the BAP covers

An insuredUsing a “covered auto”

Unless an exclusion applies …

I don’t remember …a “dropping a body” exclusion in the liability section of the BAP!!


76

All BI/PD covered

When an “insured”

Using a “covered auto”

Loading or unloading ….covered or not

77

No …exclusion …

We have a

scheduled vehicle

driven and owned

by an “insured” …

PAY THE CLAIM


78

Citation: 410 Mass. 1002 Parties: THE TRAVELERS INSURANCE COMPANY vs.

AETNA LIFE AND CASUALTY COMPANY.(Rescript Opinions.)

Decision Date: June 4, 1991

Where loading and unloading …auto …not CGL

Judge felt same way!!!!!


79

CGL won’t pay because there IS an exclusion

Cover age A (BI and PD) in the GGL excludes:

In the CGL policy …loading and unloading IS defined:

80

Is ALL BI/PD

arising out of the

loading or unloading of

a “covered auto”

covered under the

BAP?????

81


There are issues to worry about with loading and unloading

of property ….

No damage TO the property being unloaded ….

And ….

Is it a BAP claim or a CGL claim …

for the loading or unloading process when something

or someone else is damaged or injured during this

process?????????


82

6. Care, custody or control

a. No PD for damage to property

that an insured owns (hit

corporation fence with corporation truck)

b. No PD for damage to property transport

83


6. Care, custody or control

Ace Trucking Company bringing load of

expensive computers from manufacturer to

CompUSA …

truck door opens …

computers fall out on road and are damaged

…

BAP does NOT respond for damage to computers)

84


7. Handling of property (loading/unloading)

a. BAP not cover BI/PD arising out of the property until it is “FIRST accepted ”

85


(Ace Trucking hired by COMPUSA to pick up

100 boxes of computers.

Boxes are piled on COMPUSA loading dock.

Fall over and kill pedestrian …BEFORE Ace

Trucking gets to loading dock.

Injury to the pedestrian is NOT the

responsibility of Ace Trucking CGL of COMPUSA is responsible).

86


7. Handling of property (loading/unloading)

b. BAP not cover BI/PD arising out of the property until it is “FINALLY delivered”

87


(Carpenter remodeling my kitchen.

Takes oak cabinets out of his truck to bring into my

kitchen.

To get to the kitchen he must bring them into a foyer and

then up a few stairs, through the living room and then into

the kitchen.

While bringing the cabinets up the stairs and through the

living room he gauged the walls alongside the stairway.

Will the BAP pay for the damage to the walls)?

YES … cabinets are NOT “finally delivered” 88


(Carpenter remodeling my kitchen.

Takes oak cabinets out of his truck to bring into my

kitchen.

To get to the kitchen he must bring them into a foyer and

then up a few stairs, through the living room and then into the

kitchen.

While bringing the cabinets up the stairs and through the

living room he gauged the walls alongside the stairway.

Will the BAP pay for the damage to the cabinet that damaged

the wall???

NO … per exclusion 6 that was just discussed – damage to

property in c/c/c” 89


(Carpenter gets cabinets installed in the kitchen.

One falls off and whacks me in the head.

Will the carpenter’s BAP respond to my injury?

NO …the cabinets were “finally delivered”. Carpenter

needs CGL)

90


Complete Operations Rule …

91


Complete Operations Rule …

92


93


8. Movement of Property by

Mechanical Device

a. The BAP will cover BI/PD

arising out of loading or

unloading

1) By hand

2) By hand truck (dolly)

3) By hydraulic device

attached to truck

b. BAP will NOT cover BI/PD

arising out of loading or

unloading by mechanical

device NOT attached to auto94


The CGL covers loading /unloading of an “auto” by a mechanical device NOT attached to the truck/auto

The BAP covers loading/unloading by hand, dolly and mechanical device attached TO the auto/truck


95

What rental coverage, or “loss of use” coverage is available for

large trucks or equipment that are being used by contractors to

generate revenue?

The agent then asked, if we have a waste hauler whose vehicle gets

in an accident and is out of commission for two months, that waste

hauler is losing revenue daily. Most times they are unable to find a

replacement vehicle, or IF they do, the rental fee would be hundreds

of dollars a day, not the typical $30 rental reimbursement dollars.

What is available for coverage?

Or if a contractor “rolls” his excavator and needs to rent another one

until he can find one. Where is the coverage available for this?

Loss of income

96

Easy question first …. Renting “comparable” equipment

Rental Reimbursement Coverage CA 99 23 has been around for a

LONG time. The MA counterpart is MM 99 39 Loss of Use/Rental

Reimbursement Coverage. The client chooses whether

comprehensive or specified causes of loss and collision will

activate coverage.

The client has to RESEARCH IF replacement rental is available.

The client then determines how many days desired at what cost

per day. The a rate per $100 of value is applied. This

endorsement is WORTHLESS if there is no replacement

equipment to rent when a covered physical damage claim occurs.

Loss of income

97

Find out how much

would need per day …

then can buy 30 days

worth

Loss of income

98

So …what’s the scoop with equipment that is not readily replaceable

and major loss of income occurs when direct physical damage to

equipment occurs.

Well, this has been a problem for decades. Business Income through the

BOP or the CP forms has some coverage activation requirements that don’t

work well with “movable locations”. The following is from CP 00 30 10 12:

Loss of income

99

A collision accident or comprehensive incident could cause a

suspension of operations and the CP or BOP Special Form Cause of

Loss could respond from a covered loss standpoint.

If the equipment is damaged then there certainly could be a

“suspension” of operations.

The big issue is “direct physical loss of or damage to property at

premises which are described in the Declarations”.

Under the CP or BOP business interruption coverage, the requirement

for described location could be problematic. A carrier would have to

create their own endorsement and/or language.

Loss of income

100

ISO BAP endorsement (also approved through AIB with the MA DOI)

Business Interruption Coverage CA 99 05 02 14

It is a 7 page endorsement and a company doesn’t have to file to use it or

offer it to all clients.

Loss of income

101

Loss of income

There are two options.

Option A is used when there is only 1 item of scheduled property or when multiple items of scheduled property are being covered subject to separate limits of insurance.

Option Bis used when a single limit of insurance applies to more than 1 item of scheduled property.

Just like the CP/BOP forms one can purchase business income with extra expense or without.

102

Loss of income

Endorsement has own schedule of coverage

On the first page is a “schedule”.

This is where the covered business activity is described, the

equipment and the BII limit(s) of insurance are displayed.

How long will it take to repair or replace this equipment?

This is something the business owner should know or research.

How many jobs present and future will be lost because damaged

equipment takes months to repair or replace? 103

Loss of income

Losses covered

Loss or damage must result from a covered loss in coverage

territory.

Since this can be added to the BAP, the Auto dealer and the Motor

Carrier coverage Form refer to the policy to which it is attached to

determine the definition of “coverage territory”.

The options for covered losses are comprehensive or specified

caused of loss and collision just like the BAP form. If a covered

situation causes a slowdown or cessation of the described property’s

operations, then coverage is activated. 104

Loss of income

Endorsement specific definitions: Schedule property is defined as:

A definition of “business income” and “extra expense” is added and are

similar to that found in the CP or BOP forms.

The “Period of restoration” is also defined similar to the BOP and CP forms

so remember there is a 72 hour deductible for business income coverage.

The endorsement schedule area provides the ability to buy this 72 hour

deductible back to “24” hours or “0” hours just as the CP and BOP forms

allow. But, if one doesn’t ask to reduce deductible on endorsement

schedule … SURPRISE! 105

Loss of income

Also remember the period of restoration ends coverage when

scheduled property should be repaired/replaced with reasonable

speed.

The endorsement provides an additional coverage of “Extended

Business Income” which begins when the “period of restoration”

ends and lasts for 60 days.

Will 60 days of Extended Business Income be sufficient to regain all

clientele who went elsewhere when equipment is being repaired or

replaced?

A longer period of time can be purchased just as in the CP and BOP

forms.106

Loss of income

Are there exclusions?

Of course! Though, not as

many as found in the Special

Form Cause of Loss attached

to

CP 00 30 or those found in the

BOP!

Option A

107

Loss of income


Option B

108

Loss of income


Get BII

Get EE

Extended BII

Remaining pages …

109

Thank you for attending…

Q&A

Commercial auto

110

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