1
Q
Which of the following coverages is(are) automatically included in the Business Auto coverage form?
Liability
Uninsured motorists
Medical payments
Liability, physical damage, and medical payments
A
The business auto coverage form includes liability and physical damage coverage.
Uninsured motorists, medical payments, and underinsured motorists coverage must be added by endorsem*nt.
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2
Q
In the business auto coverage form, mobile equipment is
covered under liability coverage when it is being towed or carried by a covered auto
covered under Physical Damage coverage when it is being towed or carried by a covered auto
included in the policy’s definition of auto and is covered under both liability and physical damage coverage
not covered under any circ*mstances
A
In general, mobile equipment is not included in the policy’s definition of auto.
An exception is made under the policy’s liability coverage when mobile equipment is being towed or carried by a covered auto.
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3
Q
Which of the following coverages are included in the garage coverage form? Assume there are no endorsem*nts attached to the policy.Underinsured motoristsTrailer interchangeGaragekeepersMedical payments
A
The Garage coverage form includes liability, garagekeepers, and physical damage coverage.
Medical payments, uninsured motorist, and underinsured motorists coverage is added by endorsem*nt. Trailer interchange coverage is not used with the garage coverage form.
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4
Q
The insured’s liability for damage to customers’ autos in the insured’s custody is covered under
the garagekeepers section of the garage coverage form
both the liability and physical damage sections of the garage coverage form
the liability section of the garage coverage form
the physical damage section of the garage coverage form
A
The liability section of the garage coverage form excludes liability for damage to customers’ autos in the insured’s custody.
Coverage for this exposure is provided under the garagekeepers section of the garage form.
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5
Q
Which one of these statements concerning business auto liability coverage is NOT correct?
It covers only sums for which the insured is legally liable.
It does not cover pollution losses.
It covers BI or PD caused by an accident.
The BI or PD must result from the ownership, maintenance, or use of a covered auto.
A
This coverage pays all sums an insured legally must pay as a covered pollution cost or expense to which the policy applies as long as certain conditions are met.
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6
Q
Damage to a trailer the insured borrows or hires from another trucking business for use in his or her own business is
covered under the liability coverage of the truckers coverage form
covered under the business auto coverage form
excluded under the truckers coverage form
covered under the trailer interchange coverage of the truckers coverage form as long as certain conditions are met
A
Truckers frequently need to borrow or hire a trailer from another trucking business for use in their own business. Damage to such property is covered under the trailer interchange coverage of the truckers form.
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7
Q
A trucker is eligible for coverage under
either the truckers coverage form or the motor carrier coverage form
the truckers coverage form, the motor carrier coverage form and the business auto coverage form
the truckers coverage form only
the motor carrier coverage form only
A
A motor carrier is anyone who transports property by auto in a commercial enterprise. This broad definition includes truckers, which means truckers may be covered under the truckers coverage form or the motor carrier coverage form.
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8
Q
All of the following would be considered an insured under business auto liability coverage when using a covered auto with permission EXCEPT
others while using a covered auto with permission
a person working in an auto-type business
others who become liable for the conduct of an insured
the named insured
A
Individuals working in auto-type businesses are not considered insureds for liability coverage when using a covered auto with permission.
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9
Q
Which of the following losses would be paid under the business auto coverage form’s comprehensive coverage?
Gradual corrosion of the grillwork on a covered auto due to continuous exposure to salt air
Overturn of a covered auto
Collision damage to a covered auto
Theft of a covered auto
A
Theft of a covered auto
Losses from wear and tear are excluded. The other two losses are considered collision losses.
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10
Q
Which of the following perils is included in the business auto coverage form's specified causes of loss coverage?Falling objectsMechanical breakdownEarthquakeCollision
A
Specified causes of loss coverage is a limited type of comprehensive coverage. It covers fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, vandalism or mischief, and sinking, burning, collision, or derailment of a conveyance transporting the covered auto.
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11
Q
All of the following coverages are available under the business auto coverage form's physical damage section EXCEPTgaragekeepers coveragetowing and labor costs coveragetransportation expenses coveragecollision coverage
A
The physical damage portion of the business auto coverage form contains three principal coverages:
comprehensive, specified causes of loss (a more limited type of comprehensive coverage) and collision.
Coverage for towing and labor costs and transportation expenses is also available under physical damage coverage.
Garagekeepers insurance is not included in the business auto coverage form.
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12
Q
Which of the following is covered under business auto liability coverage?
Damage to the insured’s own auto
Liability for property in the insured’s custody
Liability assumed under a contract that is considered an insured contract
Injury to employees covered under workers compensation laws
A
The exclusion for liability assumed under contract or agreement does not apply to contracts that meet the policy’s definition of an insured contract.
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13
Q
Which portion of the garage coverage form covers liability for damage to property of others in the insured’s care, custody or control?GaragekeepersPhysical damageBoth liability and garagekeepersLiability
A
The liability section of the garage coverage form excludes liability for damage to customers’ autos in the insured’s custody.
Coverage for this exposure is provided under the garagekeepers section of the garage form.
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14
Q
Which of the following can be covered under a motor carrier coverage form?
Motor carriers
Both of these
Truckers
A
A motor carrier is anyone who transports property by auto in a commercial enterprise, regardless of whether the individual was hired for that purpose.
Since this broad definition encompasses truckers, those who are eligible for coverage under the truckers coverage form could also be covered under the motor carrier coverage form.
However, those who are eligible for coverage under the motor carrier form can only be covered under the truckers form if they transport goods for others by hire.
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15
Q
Which commercial auto endorsem*nt extends personal auto coverage to immediate family members of the named insured?
Drive other car—broadened coverage for named individuals
Individual named insured
A
The individual named insured endorsem*nt provides coverage similar to that provided under the personal auto policy to family members of the named insured while using any auto.
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16
Q
Medical payments, uninsured motorists, and underinsured motorists coverage
is automatically included in all commercial auto coverage forms
can be added by endorsem*nt to any of the commercial auto coverage forms
A
These coverages are not included in any of the commercial auto coverage forms. They must be added to the policy by endorsem*nt.
17
Q
Which of the following statements concerning business auto liability coverage are NOT correct?
It does not cover pollution losses.
It covers BI or PD caused by an accident.
The BI or PD must result from the ownership, maintenance or use of a covered auto.
It only covers sums for which the insured is legally liable.
A
This coverage pays all sums an insured legally must pay as a covered pollution cost or expense to which the policy applies as long as certain conditions are met.
18
Q
Who of the following would NOT be considered an insured under business auto liability coverage?
The owner of a borrowed auto
Others while using a covered auto with permission
Others who become liable for the conduct of an insured
The named insured
A
The owner of a hired or borrowed auto is not an insured for liability coverage while using the covered auto.
19
Q
The exclusion for liability assumed under contract or agreement does NOT apply to which of the following situations?
Liability assumed under a contract that is considered an insured contract
Injury to employees covered by workers’ compensation laws
Liability for property in the insured’s custody
Damage to the insured’s own auto
A
The exclusion for liability assumed under contract or agreement does not apply to contracts that meet the policy’s definition of an insured contract.
20
Q
Which of the following businesses might be covered under a garage coverage form?Catering companyUsed car dealerAuto body shopService station
A
The garage coverage form is designed to cover vehicle dealers.
21
Q
Which of the following CANNOT be considered covered autos under the garage coverage form?
Customers’ autos left with the insured for service
Autos held for sale by a dealer
Autos the insured has leased to use in the business
A
There are two covered auto symbols that are unique to the garage coverage form. Symbol 30 is used for customers’ autos left with the insured for service, repair, storage, or safekeeping. Symbol 31 is used for physical damage coverage only for the dealers’ autos.
