12.1 Business Auto Coverage Form and Covered Auto Symbols

What the Business Auto Coverage Form Is

The Business Auto Coverage Form, current ISO edition CA 00 01, is the standard policy used to insure cars, trucks, and vans owned, hired, or used by a business. Combined with the Common Policy Declarations, Common Policy Conditions (IL 00 17), and the Business Auto Declarations, it forms the complete Business Auto Policy (BAP). It is the commercial counterpart to the Personal Auto Policy, but 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 each vehicle by coverage, the BAP uses covered-auto designation symbols to describe categories of autos. One BAP can activate liability, physical damage, medical payments, and uninsured/underinsured motorist (UM/UIM) coverage at once.

How the Form Is Built

The form is modular — a coverage is in force only when a symbol number AND a limit are entered on the declarations.

The Nine Covered-Auto Symbols

Each coverage line on the declarations carries its own symbol, so a policy commonly reads Symbol 1 for liability but Symbol 7 for physical damage.

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 employee cars (needs 9).

Symbols 5 and 6 — the State-Mandate Symbols

Symbols 5 and 6 do NOT add a category of vehicle. They automatically activate state-mandated coverages on owned autos. Symbol 5 makes owned autos pick up no-fault / Personal Injury Protection (PIP) wherever required; Symbol 6 does the same for compulsory uninsured motorist (UM). They ride alongside the liability symbol, not instead of it.

Why Liability and Physical Damage Differ

• Liability is usually Symbol 1 — the business wants no gaps if any vehicle injures a third party.
• Physical damage is usually Symbol 7 or 2 — the insurer must know year, make, model, and value to rate and pay a loss, so blanket Symbol 1 physical damage is rarely written.

The 30-Day Newly-Acquired-Auto Rule

Automatic coverage for a vehicle bought mid-term depends entirely on the symbol:

Worked example: A contractor's BAP shows Symbol 4 for liability and Symbol 7 for physical damage. The contractor buys a dump truck and crashes it 10 days later. Liability follows the truck (Symbol 4, within 30 days). Physical damage does NOT — Symbol 7 covers only scheduled units, and the truck was never added. The contractor pays the truck's own repair out of pocket.

Reading a Declarations Page

A small-contractor schedule might read:

• Covered Autos Liability: Symbol 1 — $1,000,000 combined single limit
• Auto Medical Payments: Symbol 2 — $5,000
• Uninsured Motorist: Symbol 6 — $1,000,000
• Comprehensive / Collision: Symbol 7 — $500 / $1,000 deductible

Liability blankets every auto, but physical damage reaches only scheduled trucks. A rented trailer has liability (Symbol 1 includes hired) but no physical-damage protection unless Symbol 8 hired physical damage is added.

Who Is an Insured

The form's insured definition is intentionally broad and is tested against fact patterns that hide a gap. There are three tiers of insured under Covered Autos Liability:

• The named insured — protected for ANY covered auto, owned or otherwise.
• Permissive users — anyone using a covered auto the named insured owns, hires, or borrows WITH the named insured's permission.
• Anyone legally responsible for the conduct of an insured, but only to the extent of that vicarious liability (for example, an employer answerable for an employee's covered driving).

The key carve-out: the owner of a hired or borrowed auto is generally NOT an insured — 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 relies on Symbol 9 (non-owned), which protects only the employer's vicarious liability, not the employee. The employee's personal auto policy is primary.

Other Coverages the Form Can Activate

Beyond liability and physical damage, the declarations can switch on several first-party coverages, each in force only when a limit is entered:

Rating and Audit Basis

Commercial auto is fleet-rated or schedule-rated depending on the number of power units. Fleets (commonly nine or more self-propelled vehicles) qualify for fleet rating, which blends the loss experience of the whole fleet rather than rating each unit alone. Because vehicles are added and deleted mid-term, the premium shown at inception is a deposit premium, and many policies are auditable — the final premium is adjusted at expiration based on actual exposure such as cost of hire or number of units.

BAP vs. Personal Auto Policy at a Glance

Memory hook: Symbol 8 is Hired (the business pays to use it); Symbol 9 is Non-owned (a car the business neither owns nor hires, such as an employee's). Students reverse these two more than any other pair on the exam.