9.1 Business Auto Policy Overview

Property & Casualty Insurance Exam

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1 Introduction

0.1 About the Property & Casualty Exam 0.2 How to Use This Course

2 Chapter 1: Insurance Fundamentals

1.1 Risk and Risk Management 1.2 Types of Risk 1.3 Principles of Insurance 1.4 The Insurance Contract 1.5 Policy Structure and Components

3 Chapter 2: Property Insurance Concepts

2.1 Property Coverage Basics 2.2 Perils, Hazards, and Exclusions 2.3 Valuation Methods 2.4 Coinsurance and Insurance to Value 2.5 Deductibles and Policy Limits

4 Chapter 3: Dwelling Policies

3.1 Dwelling Policy Overview 3.2 Dwelling Policy Forms (DP-1, DP-2, DP-3) 3.3 Dwelling Property Coverages 3.4 Dwelling Exclusions and Conditions

5 Chapter 4: Homeowners Policies

4.1 Homeowners Policy Overview 4.2 Homeowners Policy Forms (HO-2 through HO-8) 4.3 Section I: Property Coverages 4.4 Section II: Liability Coverages 4.5 Homeowners Exclusions 4.6 Homeowners Conditions 4.7 Common Homeowners Endorsements

6 Chapter 5: Personal Auto Policy

5.1 Personal Auto Policy Overview 5.2 Part A: Liability Coverage 5.3 Part B: Medical Payments Coverage 5.4 Part C: Uninsured/Underinsured Motorists 5.5 Part D: Physical Damage Coverage 5.6 PAP Exclusions 5.7 No-Fault Insurance and PIP

7 Chapter 6: Liability Insurance Concepts

6.1 Liability Insurance Basics 6.2 Negligence and Tort Law 6.3 Types of Legal Liability 6.4 Personal Umbrella Policies

8 Chapter 7: Commercial Property Insurance

7.1 Commercial Package Policy (CPP) 7.2 Building and Personal Property Coverage Form 7.3 Causes of Loss Forms 7.4 Business Income Coverage 7.5 Businessowners Policy (BOP)

9 Chapter 8: Commercial General Liability

8.1 CGL Policy Overview 8.2 Coverage A: Bodily Injury and Property Damage 8.3 Coverage B: Personal and Advertising Injury 8.4 Coverage C: Medical Payments 8.5 CGL Exclusions 8.6 CGL Limits and Conditions

10 Chapter 9: Commercial Auto Insurance

9.1 Business Auto Policy Overview 9.2 Covered Auto Designation Symbols 9.3 BAP Liability Coverage 9.4 BAP Physical Damage Coverage 9.5 Garage and Truckers Coverage Forms

11 Chapter 10: Workers Compensation

10.1 Workers Compensation Overview 10.2 Part One: Workers Compensation Insurance 10.3 Part Two: Employers Liability 10.4 Workers Compensation Exclusions 10.5 Other States and USL&H Coverage

12 Chapter 11: Other Commercial Lines

11.1 Inland Marine Insurance 11.2 Ocean Marine Insurance 11.3 Commercial Crime Insurance 11.4 Surety Bonds 11.5 National Flood Insurance Program 11.6 Professional Liability Insurance 11.7 Commercial Umbrella and Excess Liability 11.8 Boatowners and Personal Watercraft Insurance 11.9 Farm and Ranch Insurance 11.10 Mobile Home and Manufactured Housing Insurance 11.11 Title Insurance

13 Chapter 12: Insurance Regulations and Ethics

12.1 Producer Licensing 12.2 Producer Authority and Responsibilities 12.3 Unfair Trade Practices 12.4 Claims Settlement Practices 12.5 State Insurance Department 12.6 Penalties and Disciplinary Actions

9.1 Business Auto Policy Overview

Key Takeaways Explain This Topic AI

The Business Auto Policy (BAP), written on ISO form CA 00 01, provides liability and physical damage coverage for vehicles used in business and is the commercial cousin of the Personal Auto Policy (PAP).

The BAP applies coverage through covered-auto designation symbols (1-9) entered on the declarations next to each coverage — a feature unique to commercial auto.

WHO IS AN INSURED is broader than the PAP: it includes the named insured, anyone using an owned/hired covered auto with permission, and anyone liable for the conduct of an insured.

Supplementary payments — defense, $2,000 bail bonds, and $250/day loss of earnings — are paid IN ADDITION to the liability limit, not inside it.

Employees are NOT insureds for liability when using their OWN autos for business; their personal auto policy is primary and the employer relies on Symbol 9.

Last updated: June 2026

What the Business Auto Policy Is

The Business Auto Policy (BAP) is the Insurance Services Office (ISO) standard form — current edition CA 00 01 — used to insure cars, trucks, and vans owned, hired, or used by a business. It is the commercial counterpart to the Personal Auto Policy (PAP) , but it solves a problem the PAP never faces: a business may own zero, five, or five hundred vehicles, plus rent and borrow others. Rather than list every vehicle by coverage, the BAP uses covered-auto designation symbols to describe categories of autos.

A single BAP can insure many things at once: third-party liability , physical damage to the insured's own autos, medical payments , uninsured/underinsured motorist (UM/UIM) coverage, and optional endorsements such as drive-other-car or rental reimbursement.

How the Form Is Built

The BAP is modular — coverages are activated only when a symbol and a limit appear on the declarations.

• Section What It Does
• Item One – Declarations Named insured, address, policy period, and the limits/symbols selected
• Section I – Covered Autos Defines the nine symbols and the 30-day newly-acquired-auto rule
• Section II – Covered Autos Liability Third-party bodily injury and property damage
• Section III – Physical Damage Comprehensive, collision, specified causes of loss
• Section IV – Conditions Duties after loss, two-or-more-coverage-forms, transfer of rights
• Section V – Definitions 'Accident,' 'auto,' 'bodily injury,' 'property damage,' 'loss'
• Covered-Auto Designation Symbols (1-9)

Every coverage line on the declarations carries its own symbol, so liability can be written far broader than physical damage.

• Symbol Category Plain Meaning
• 1 Any Auto All autos — owned, hired, AND non-owned (broadest)
• 2 Owned Autos Only Every auto the insured owns, any type
• 3 Owned Private Passenger Only Owned cars/SUVs, not trucks
• 4 Owned, Other Than Private Passenger Owned trucks, vans, specialty rigs
• 5 Owned Autos Subject to No-Fault Owned autos in PIP/no-fault states
• 6 Owned Autos Subject to Compulsory UM Owned autos where UM is mandatory
• 7 Specifically Described Autos ONLY vehicles listed on the schedule
• 8 Hired Autos Only Rented, leased, or borrowed (not owned)
• 9 Non-Owned Autos Only Employee/partner personal autos used for business

Exam trap: Symbol 1 is the only symbol that automatically pulls in hired and non-owned exposure. A risk written Symbol 2 has a gap for rentals (needs 8) and for employee cars (needs 9).

Who Is an Insured

The BAP's insured definition is intentionally broad. There are three tiers:

The named insured — for ANY covered auto.

Permissive users — anyone using a covered auto the named insured owns, hires, or borrows WITH permission.

Anyone legally responsible for the conduct of an insured, but only to the extent of that liability (for example, an employer liable for an employee's covered driving).

The key carve-out: the owner of a hired or borrowed auto is generally NOT an insured (so a rental company is not an insured under your BAP), and an employee is not an insured for liability while driving the employee's OWN auto . For employee-owned cars the employer must rely on Symbol 9 (non-owned) , which protects the employer's vicarious liability — not the employee. The employee's personal auto policy is primary.

Other Core Coverages Available

Beyond liability and physical damage, the BAP can activate several first-party coverages, each shown on the declarations only when a limit is entered:

• Coverage What It Pays
• Auto Medical Payments Reasonable medical/funeral expenses for the insured and occupants, regardless of fault

Uninsured/Underinsured Motorist (UM/UIM) The insured's BI (and sometimes PD) when an at-fault driver is uninsured or underinsured

No-Fault / PIP State-mandated personal injury protection where required (activated by Symbol 5)

Drive Other Car (DOC) Liability and med-pay for named individuals driving non-owned autos — common for owners of corporate vehicles who have no personal auto

Rating and Audit

Commercial auto is fleet-rated or schedule-rated depending on the number of power units. Larger fleets (typically nine or more self-propelled vehicles) are eligible for fleet rating, which blends the loss experience of the whole fleet. The premium shown at inception is a deposit premium ; because vehicles are added and deleted mid-term, many BAPs are auditable , with the final premium adjusted at expiration based on actual exposure.

BAP vs. Personal Auto Policy

• Feature BAP (CA 00 01) Personal Auto Policy
• Covered autos Selected by symbol Listed by VIN
• Who is insured Broad — permissive users, vicarious parties Narrow — named insured + family/permissive
• Business use Primary purpose Generally restricted/excluded
• Loading & unloading Expressly covered Covered, narrower scope
• Rating basis Fleet rating available Per-vehicle
• New vehicles Auto 30 days (Symbols 2/3/4) Auto for new/replacement subject to rules