Ever attempt a project that at first seemed simple and innocent, only to discover after committing to it that it required significantly more time or skill than anticipated? One may experience the same feeling when reading a business auto insurance policy. Yet when properly broken down, these policies are straightforward and less complicated than initially thought. They protect against one of the most significant risks faced by businesses. Liability for an auto accident can be crippling, its effects only compounded by the cost to repair or replace the damaged vehicle.
Business owners need to understand which coverages apply to which vehicles, whether listed on the policy or not. Here we will consider one facet of a business auto policy, the coverage symbols.
Common Business Auto Insurance Symbols
Business owners often want certain vehicles protected differently than others. To cover all vehicles with all protections would not be affordable or practical. For example, certain business owners only protect vehicles more than ten years old for liability whereas they add physical damage protection for newer vehicles. A business auto insurance policy uses symbols to identify which vehicles receive which coverages. Coverage is adjusted by changing these symbols and understanding how they work is key to understanding a business auto insurance policy.
Reference Commercial Auto Insurance for an explanation of the coverages provided by a standard business auto policy, but here we will focus on how those coverages are connected to vehicles using the symbols below, numbered 1 through 9. Certain policies may contain additional symbols, but 1 through 9 are the most popular.
Each symbol represents the type of vehicle protected by the applicable coverage. Notice how the symbols generally become more specific down the list.
- Any Auto
- Owned Autos: Autos you own
- Owned Private Passenger Autos: Autos you own of the private passenger type.
- Owned Autos Other Than Private Passenger Autos: Auto you own that are not private passenger type, such as commercial trucks.
- Owned Autos Subject to No-fault: Autos you own that are required by law to have no-fault benefits.
- Owned Autos Subject to A Compulsory Uninsured Motorists Law: Autos you own that are required to have Uninsured Motorists Coverage.
- Specifically Listed Autos: Autos specifically listed on the policy, where coverage is indicated.
- Hired Autos: Autos you lease, hire, rent, or borrow. This does not include any vehicles belonging to your employees, partners, members, or members of their households.
- Non-owned Autos: Autos you do not own, lease, hire, rent, or borrow that are used in your business. This includes autos owned by your employees, partners, members, or members of their households, but only while used in your business.
How These Symbols Are Used
This image is taken directly from a business auto policy of one of our clients. Notice the circled column titled “Covered Auto Symbols”. That column designates how each coverage in the left column is applied to which vehicles. For example, on the first line, liability for bodily injury is applied to any auto (symbol 1). That means literally what it says. No matter what auto causes the accident, whether it is listed on the policy or not, if the business is found liable, protection applies. The business may own it, they may have rented it, leased it, or even borrowed it from another company.
Read the rest of the coverage rows in the same manner. Liability for property damage applies to any auto as well (symbol 1), but notice medical payments only apply to vehicles specifically listed on the policy (symbol 7). Physical damage coverages for comprehensive and collision apply to vehicles listed on the policy AND any hired autos whether listed or not (symbols 7 and 8).
Application
Carefully consider what vehicles your business operates, who owns them, and then ensure you are comfortable with how each coverage is applied to those vehicles. Adjusting symbols adjusts how coverage applies to vehicles. Does your business have a vehicle that is old but still valuable? If so, despite its age ensure physical damage coverage applies as well as adequate levels of uninsured and underinsured coverage. Or maybe one vehicle periodically carries non-employees. Medical payments would be a great option for that one. Limitations can apply. For example, although any auto (symbol 1) is highly desirable for liability coverages, it may not be available from your insurance carrier or in your line of business. Taking the time to understand business auto symbols is important ensure no surprises arise during a claim.
About Bankers Insurance
Policies vary, so please contact us with any business auto insurance questions. We can explain your insurance policies in clear terms. Not a client of ours? Let us earn your business! Each client is assigned a personal agent in our office, given their email address and provided a phone number that rings right on their desk.
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