12.5 Commercial Auto Endorsements
Key Takeaways
- Drive Other Car (CA 99 10) extends the business auto policy to scheduled individuals using non-owned autos, filling the gap for executives without a personal policy.
- Hired Auto Physical Damage (CA 99 54) adds physical damage on rented/leased autos, paying the lesser of ACV, repair cost, or the stated limit minus the deductible.
- Employees as Insureds (CA 99 33) pairs with symbol 9 to cover employees using their own autos on business.
- Mobile Equipment (CA 20 15) schedules equipment as covered autos so the BAP responds instead of the CGL.
- Under-scheduling the stated value on hired-auto physical damage leaves an uninsured gap—a common suitability and E&O exam point.
Common Business Auto Endorsements
The BAP is routinely tailored with ISO endorsements. Memorize the form numbers and what each does, because exams pair the named exposure with the correct endorsement.
| Endorsement | Form | Purpose |
|---|---|---|
| Drive Other Car (DOC) | CA 99 10 | Extends coverage to executives who have no personal auto |
| Individual Named Insured | CA 99 17 | Adds personal-auto-like coverage for an individual named insured |
| Hired Auto Physical Damage | CA 99 54 | Adds physical damage on hired/borrowed autos |
| Auto Medical Payments | CA 99 03 | Adds no-fault medical payments per person |
| Pollution Liability – Broadened | CA 99 48 | Broadens limited pollution coverage |
| Mobile Equipment | CA 20 15 | Schedules mobile equipment as covered autos |
Drive Other Car (DOC) – CA 99 10
A corporation owns the autos, so an executive who drives only the company car has no personal auto policy. If they borrow a friend's car or rent on vacation, they would have no coverage as an individual. The Drive Other Car endorsement (CA 99 10) fixes this by extending the commercial policy's liability, medical payments, UM/UIM, and (optionally) physical damage to the named individual (and spouse/family) when using a non-owned auto.
Trap: DOC is for individuals named in the schedule of the endorsement—typically owners/executives—NOT for all employees. It does not cover an auto owned by that individual; it fills the personal/non-owned gap only.
Hired and nonowned exposures
- Hired Auto Physical Damage (CA 99 54): the BAP covers liability on hired autos via symbol 8, but physical damage on rented/leased autos needs this endorsement. It typically limits the insurer's payment to the lesser of the auto's ACV, the cost to repair, or a stated value/limit (e.g., $50,000) minus a deductible.
- Employees as Insureds (CA 99 33): makes employees insureds while using their own autos in your business—pairs with symbol 9 nonowned coverage.
- Mobile Equipment (CA 20 15): schedules forklifts, cranes, etc. as covered autos so the BAP (not the CGL) responds.
For a CPP, the commercial auto coverage part is tied together by the Common Policy Conditions (IL 00 17) and the Nuclear Energy Liability Exclusion (IL 00 21).
Lessor/Additional Insured and waivers
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Lessor – Additional Insured and Loss Payee (CA 20 01): when a covered auto is leased or financed, the lessor/lienholder is added as an additional insured for liability arising from the auto's use and as a loss payee for physical damage. Lessors routinely require this in the lease contract.
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Waiver of Transfer of Rights of Recovery (CA 04 44): waives the insurer's subrogation against a party named in the schedule—common when a contract (e.g., a shipper) requires the carrier to waive subrogation.
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Audio/Visual/Data Electronic Equipment (CA 99 60): broadens or adds coverage for installed electronic equipment that the base physical-damage form limits.
Worked example – Hired Auto Physical Damage limit
A contractor rents a $48,000 truck and buys Hired Auto Physical Damage (CA 99 54) with a stated limit of $40,000 and a $1,000 deductible. The rented truck is wrecked; ACV at loss is $46,000 and repair cost is $52,000.
The insurer pays the lesser of ACV ($46,000), repair cost ($52,000), or the stated limit ($40,000)—so the cap is $40,000—minus the $1,000 deductible = $39,000. The contractor absorbs the remaining $7,000 of ACV plus the deductible.
Lesson: under-scheduling the stated value on hired-auto physical damage leaves an uninsured gap, a classic suitability/E&O exam point.
Matching the Exposure to the Endorsement
The BAP endorsement questions almost always describe a gap and ask which form fills it. Train yourself to map the fact pattern to the form:
| If the exposure is... | Add this endorsement |
|---|---|
| Executive with no personal auto needs coverage in borrowed/rented cars | Drive Other Car – CA 99 10 |
| Individual named insured wants personal-auto-style coverage on a commercial policy | Individual Named Insured – CA 99 17 |
| Physical damage on rented or borrowed autos | Hired Auto Physical Damage – CA 99 54 |
| Employees driving their own cars on company business | Employees as Insureds – CA 99 33 |
| No-fault medical payments for occupants | Auto Medical Payments – CA 99 03 |
| A lessor/lienholder must be protected | Lessor – Additional Insured and Loss Payee – CA 20 01 |
| A contract requires waiving subrogation | Waiver of Transfer of Rights – CA 04 44 |
Quick Answer: DOC fills the individual non-owned gap for executives; Hired Auto Physical Damage fills the physical-damage-on-rentals gap (symbol 8 gives only liability); Employees-as-Insureds plus symbol 9 covers employee-owned autos used in the business.
Why These Gaps Matter for Suitability
Each endorsement exists because the base BAP deliberately leaves a hole. Symbol 8 gives liability on hired autos but no physical damage — so a firm that rents trucks without CA 99 54 must pay out of pocket when a rental is wrecked. An executive insured only through the corporation has no coverage of their own for a vacation rental unless DOC is added. A producer who overlooks these gaps, or who under-schedules the stated value on hired-auto physical damage, creates an errors-and-omissions exposure for the agency.
The exam frames these as suitability questions: identify the uncovered exposure first, then name the endorsement that closes it.
A corporate executive drives only the company-owned car and has no personal auto policy. To extend liability and UM coverage to that executive when renting a car on a personal vacation, which endorsement is added to the business auto policy?
A business rents a $50,000 truck and buys Hired Auto Physical Damage with a $35,000 stated limit and a $500 deductible. The truck is a total loss with ACV of $49,000. How much does the insurer pay?