12.5 Commercial Auto Endorsements

Drive Other Car (DOC) — CA 99 10

A corporation that furnishes a company car to an executive often finds the executive has no personally owned automobile and therefore no Personal Auto Policy. When that executive drives a borrowed or rented car for personal use, there is a gap — the BAP covers business use of company autos, not personal use of non-owned vehicles. The Drive Other Car endorsement (CA 99 10) fills this by extending liability, medical payments, uninsured/underinsured motorist, and physical damage to the named individual (and usually the spouse and resident relatives) as if they owned a personal auto policy.

Key trap: DOC is for people who do not own a personal auto. If the executive already carries a PAP, DOC is unnecessary and is not added.

Hired and Non-Owned Auto Endorsements

When a business's liability symbol is narrower than Symbol 1, exposure to rented and employee-owned vehicles must be added back:

• Hired Auto liability/physical damage activates Symbol 8 — autos the business leases, hires, rents, or borrows (but not from employees). Hired-auto physical damage is commonly written on a cost-of-hire basis.
• Non-Owned Auto liability activates Symbol 9 — covers the business's vicarious liability when employees or partners use their own vehicles on company business.

These are essential for service businesses that send employees on errands in personal cars or rent vehicles for travel.

Auto vs. Mobile Equipment

Whether a piece of equipment is an auto or mobile equipment decides which policy pays. Generally, self-propelled equipment used off public roads (bulldozers, forklifts, cranes not licensed for road use) is mobile equipment insured under the CGL, while anything subject to motor-vehicle registration is an auto insured under the BAP. A snow-plow or street-cleaner that must be registered to operate on public roads can shift from mobile equipment to auto — a frequent exam wrinkle.

Pollution, Lessor, and Equipment Endorsements

• Pollution Liability – Broadened Coverage for Covered Autos (CA 99 48): the BAP excludes most pollution, but this endorsement broadens coverage for pollutants that are the cargo or fuel of a covered auto in certain accident scenarios.
• Lessor – Additional Insured and Loss Payee (CA 20 01): required when a business leases a vehicle; it names the lessor as additional insured for liability and as loss payee for physical-damage payments.
• Audio, Visual and Data Electronic Equipment: the form includes a small built-in sublimit (commonly $1,000) for permanently installed equipment; an endorsement raises it for fleets with expensive telematics or dispatch electronics.
• Rental Reimbursement (CA 99 23): pays a daily amount for a substitute vehicle while a covered auto is being repaired after a covered physical-damage loss — broader than the comprehensive theft transportation benefit because it applies to any covered loss, not just theft.

Experience Modification and Premium Adjustment

Commercial auto premium is not purely class-rated; an insured's own loss history adjusts it through an experience modification factor (mod). The mod compares the insured's actual losses to the expected losses for its class:

• A mod below 1.00 is a credit (debit-free) — the insured had better-than-average experience and pays less.
• A mod above 1.00 is a debit — worse-than-average experience increases premium.

Worked Mod Example

A fleet's manual (class) premium is $40,000 and its experience modification factor is 0.85. The modified premium is $40,000 × 0.85 = $34,000, a $6,000 credit for good loss history. If the same fleet had a mod of 1.20, the premium would be $40,000 × 1.20 = $48,000, an $8,000 debit. Schedule rating credits/debits and premium discounts may then apply on top of the experience mod.

Drive Other Car and Individual Named Insured

When a business owns the vehicles, an executive or owner who has no personal auto can be left without coverage when driving non-business cars. The Drive Other Car (DOC) endorsement extends the commercial policy to named individuals (and their spouses/family) while using autos the company does not own, filling the gap the personal auto policy would normally cover. The Individual Named Insured endorsement similarly broadens coverage for an individual owner of the business and family members, adding personal-auto-style protections to the commercial form.

Hired Auto, Mobile Equipment, and Pollution Endorsements

Several endorsements tailor the commercial auto policy:

The CA 99 48 matters because the base form excludes most pollution; this endorsement gives back coverage for fuel/lubricant escape and, with care, transported cargo. Match each business's gap — uncovered drivers, rented trucks, hauled pollutants — to the endorsement that closes it.

Matching the Gap to the Endorsement

The practical exam skill is diagnosing a coverage gap and naming the fix. A business owner with no personal car who drives borrowed autos needs Drive Other Car. A firm whose staff run errands in their own vehicles needs Employees as Insureds or Symbol 9 non-owned liability. A company that rents trucks for peak season needs Hired Auto Physical Damage. A contractor hauling fuel needs the Broadened Pollution (CA 99 48) endorsement.

Reading the scenario for the uncovered exposure — uncovered driver, borrowed vehicle, transported pollutant — points directly to the endorsement that restores coverage, which is how these items are framed on the test.