11.6 Selected Commercial Auto Endorsements
The following endorsements may be added to Commercial Auto coverage forms to modify, broaden, or restrict the coverage provided by the policy.
Auto Medical Payments Coverage
The Auto Medical Payments Endorsement pays reasonable and necessary medical and funeral expenses resulting from bodily injury caused by an auto accident. Covered individuals include the named insured and family members while occupying an auto or when struck as pedestrians. Coverage also applies to other individuals, such as passengers, while they are occupying a covered auto.
Coverage is subject to a per-person limit for each accident. The insurer pays covered medical and funeral expenses up to that limit, provided the expenses are incurred within three years of the accident.
Coverage does not apply to bodily injury arising from war, organized racing activities, or the use of a covered auto by a person who does not reasonably believe they are entitled to use it. The endorsement also excludes bodily injury sustained by an employee in the course of employment when the injury is covered by Workers’ Compensation insurance.
Uninsured Motorists Coverage
Uninsured Motorists Coverage pays for bodily injury sustained by the insured or occupants of a covered vehicle when an accident is caused by a legally responsible driver who does not have liability insurance.
Note
Medical Payments Coverage and Uninsured Motorists Coverage are not automatically included in most Commercial Auto policies because covered autos are commonly occupied by employees performing job-related duties. Injuries employees sustain in the course of employment are generally addressed by Workers’ Compensation insurance rather than the Commercial Auto policy. However, some states require these coverages to be offered or included. When added by endorsement, they typically contain exclusions for employee injuries that are covered by Workers’ Compensation.
Individual Named Insured
The Individual Named Insured Endorsement is designed for a named insured who is listed on a Commercial Auto policy as an individual or sole proprietor. It is particularly useful when the insured owns a private passenger auto that is covered by the commercial policy but is also used for personal activities. The endorsement extends liability and physical damage coverage to the private passenger auto while it is being used for nonbusiness purposes. In effect, it adds coverage similar to that provided by a Personal Auto policy for qualifying private passenger autos owned and used by the named insured.
The Individual Named Insured Endorsement expands the definition of an insured to include the named insured’s resident family members when coverage applies to qualifying private passenger autos. The endorsement also extends liability coverage to certain nonowned autos, such as rented vehicles, while they are being used by the named insured or a family member. However, coverage may not apply when the nonowned auto is owned by a family member or is being used in a business other than the named insured’s business. When an owned private passenger auto is insured for physical damage coverage, the endorsement generally extends the same physical damage coverage to qualifying nonowned private passenger autos.
The endorsement modifies the Fellow Employee exclusion so that it does not apply to bodily injury sustained by a fellow employee of the named insured or by a family member of that fellow employee.
Example
A sole proprietor owns an SUV that is used for both business and personal purposes and is insured under a Business Auto policy. By adding the Individual Named Insured Endorsement, the sole proprietor may obtain both commercial and personal-use coverage for the SUV under one policy rather than maintaining separate commercial and personal auto policies. The endorsement also extends insured status to resident family members while they are using the covered SUV, similar to the protection provided by a Personal Auto policy.
Drive Other Car – Broadened Coverage for Named Individuals
The Drive Other Car Endorsement also extends Commercial Auto coverage to specifically named individuals. Unlike the Individual Named Insured Endorsement, it is designed for policies in which the named insured is an organization, such as a limited liability company (LLC), partnership, or corporation.
The Drive Other Car Endorsement is designed to extend coverage to a specifically named individual, such as an employee or executive, who is furnished with a company vehicle but does not personally own or insure an auto. Although the Commercial Auto policy generally covers the individual’s use of the company vehicle, the endorsement broadens protection to include the individual’s or spouse’s use of certain autos that are not owned, hired, or borrowed by the policy’s named insured. For this broadened coverage to apply, the individual must be specifically scheduled on the endorsement.
Example
Employee B works for an LLC and is furnished with a company car. However, B does not own a personal vehicle or maintain a Personal Auto policy. If B is specifically scheduled on the Drive Other Car Endorsement, coverage may apply when B rents a vehicle, even when the rental vehicle is used for personal purposes. The endorsement may also provide coverage when B borrows a neighbor’s car or test-drives a vehicle.
Coverage does not apply to an auto owned by the scheduled individual or by a member of the individual’s household. Coverage is also excluded while the scheduled individual or a household member is using an auto in connection with a business involving the sale, service, repair, or parking of automobiles.
The Drive Other Car Endorsement may provide liability coverage, comprehensive and collision physical damage coverage, Auto Medical Payments Coverage, and Uninsured or Underinsured Motorists Coverage. A coverage applies only when the endorsement’s schedule shows the applicable liability limit or coverage limit and the corresponding premium.
Employees as Insureds
This endorsement expands liability coverage by including the named insured’s employees as insureds while they use certain covered autos that the named insured does not own, hire, or borrow. For coverage to apply, the auto must be used in the named insured’s business or personal affairs.
Example
T uses a personal vehicle to deliver pizzas for P’s Pizzeria and is involved in an accident. If the restaurant owner has added the Employees as Insureds Endorsement to the Business Auto policy, the endorsement may provide liability coverage for T while the vehicle is being used in the restaurant’s business. T’s Personal Auto policy generally applies as primary insurance, while the coverage provided by the Business Auto policy applies as excess insurance.
Lessor – Additional Insured and Loss Payee
This endorsement is used when the insured leases a vehicle and the vehicle’s owner or lessor requires protection under the Commercial Auto policy as both an additional insured and a loss payee. The leased auto identified in the endorsement’s schedule is treated as a covered owned auto rather than as a hired or borrowed auto.
The insurer pays covered physical damage losses jointly to the named insured and the named lessor according to their respective financial interests in the leased auto. The lessor’s interest remains protected unless the loss results from fraudulent acts or omissions committed by the insured.
Mobile Equipment
This endorsement allows certain types of mobile equipment, such as bulldozers, forklifts, road-construction equipment, and power cranes, to be classified and insured as covered autos. However, the endorsement does not provide liability coverage for bodily injury, property damage, or covered pollution costs or expenses arising from the operation of machinery or equipment attached to the vehicle.
Broad Form Products Coverage
The Broad Form Products Coverage Endorsement may be added only to the Garage Coverage Form. It modifies Section II by removing the Defective Products exclusion, thereby providing bodily injury and property damage liability coverage arising from defective products. Coverage is subject to the Section II Each Accident limit and a $250 deductible.