12.1 Business Auto Coverage Form and Covered Auto Symbols

What the Business Auto Coverage Form Is

The Business Auto Coverage Form (BACF) — Insurance Services Office (ISO) form CA 00 01 — is the standard policy used to insure cars, trucks, and vans that a business owns, hires, or borrows. It is the commercial cousin of the Personal Auto Policy (PAP). But it must solve a problem the PAP never faces: a single business may own zero vehicles or five hundred, and may also rent and borrow others. Instead of listing every vehicle, the BACF describes categories of autos using numbered covered-auto designation symbols.

The form pairs with the Business Auto Declarations (CA DS 03) and a Common Policy Declarations. A complete policy needs the coverage form, the declarations, and any endorsements. Coverages are modular — a coverage exists only when a symbol and a limit appear on the declarations beside that coverage.

The BACF is organized into numbered sections. Section I – Covered Autos defines the symbols. Section II – Covered Autos Liability Coverage is the core liability grant and contains the "who is an insured" and exclusion language. Section III – Physical Damage Coverage insures the insured's own autos.

Section IV – Business Auto Conditions holds the loss conditions (duties after an accident, legal action against the insurer, transfer of recovery rights) and general conditions (cancellation, premium audit, two-or-more-coverage-forms). Section V – Definitions anchors key terms such as auto, accident, mobile equipment, and insured.

The Nine Covered-Auto Symbols

The symbol entered on the declarations next to a coverage controls which autos that coverage reaches. This is the single most heavily tested concept in commercial auto.

Symbol 1 is the widest grant but is available for liability only — it cannot be used for physical damage, medical payments, or UM. Physical damage requires Symbols 2, 3, 4, 7, 8, or 19 (a non-ISO hired-physical-damage symbol).

A practical way to read the symbols: the owned group is 2, 3, and 4 (all, cars-only, non-cars). The compliance group is 5 (no-fault/PIP states) and 6 (compulsory UM states) — these exist so the policy automatically picks up statutory coverages in states that mandate them. The specific symbol is 7, used when a business wants to schedule each auto by VIN.

The non-owned exposure group is 8 (autos the business pays to use) and 9 (autos it does not pay for, such as an employee's own car). Symbol 1 sits above them all as the universal liability grant. Producers often write Symbol 1 for liability and Symbol 7 for physical damage so the broad liability net is in place while the carrier only owes physical damage on scheduled, valued units.

Newly Acquired and Replacement Autos

How a newly acquired auto is covered depends entirely on the symbol used:

• Symbol 1 (any auto) — a new auto is covered automatically and immediately for liability, with no notice requirement.
• Symbol 2 (all owned autos) — a newly acquired auto is covered automatically, but the insured must report it within 30 days if the insurer covers only those autos.
• Symbol 7 (specifically described autos) — a newly acquired auto is covered for 30 days only if the insurer already covers all the insured's autos OR the new auto replaces a described auto and the insured asks to add it within 30 days.

The 30-day reporting rule for Symbols 2 and 7 is a classic exam trap. Under Symbol 1 there is no 30-day clock at all — candidates who pick "30 days" for a Symbol 1 fact pattern lose the point.

Physical damage on a newly acquired auto follows a parallel logic. If the declarations show physical damage under a symbol that includes the new auto, coverage is automatic. If physical damage is written under Symbol 7 and the insurer does not cover all of the insured's autos, the new auto gets physical damage for 30 days only if it replaces a described auto.

The lesson: always check both the liability symbol and the physical-damage symbol before assuming a freshly purchased truck is fully insured. A common real-world claim denial occurs when a business adds Symbol 1 liability (broad) but Symbol 7 physical damage (narrow) and then totals an unreported new truck on day 35 — liability would respond, but collision would not.

Hired and Non-Owned Exposure (Symbols 8 and 9)

Many businesses do not own vehicles but still have automobile exposure. Symbol 8 (hired autos) covers liability arising from autos the insured leases, hires, rents, or borrows — but not from any auto rented from an employee or partner. Symbol 9 (non-owned autos) covers the insured's liability when employees drive their own personal cars on company business, including those rented in an employee's name.

Symbols 8 and 9 provide excess coverage over the underlying owner's or driver's own policy. They follow the business's vicarious liability, not the vehicle. A pizza shop with no owned autos still needs Symbols 8 and 9 because employees deliver in their own cars, creating respondeat-superior exposure for the employer.

Remember the rating difference too: hired autos (Symbol 8) are rated on the cost of hire (rental dollars paid per year), while non-owned autos (Symbol 9) are rated on the number of employees, because the carrier cannot value cars it never sees.

Symbol 8 grants liability only — to insure damage to a rented vehicle, the insured must add the Hired Auto Physical Damage endorsement covered in section 12.5. A frequent exam distractor offers "Symbol 8 covers comp and collision on the rental" — it does not. Likewise, Symbol 9 never insures the employee's own car for damage; it only protects the employer's liability when that car is driven on company business.