Business Auto Coverage Form & Covered-Auto Symbols
Key Takeaways
- The Business Auto Coverage Form uses numbered covered-auto symbols on the declarations to define which vehicles each coverage applies to.
- Symbol 1 (any auto) is the broadest and is typically used for liability; Symbol 7 (specifically described autos) is common for physical damage.
- Symbol 8 covers hired autos and Symbol 9 covers nonowned autos such as employees' personal vehicles used for business.
- Newly acquired autos are automatically covered under Symbol 1 but only conditionally under Symbol 7, requiring timely notice.
The Business Auto Coverage Form
The Business Auto Coverage Form (BACF) insures a business's vehicles for liability and physical damage. The defining feature, and the most-tested concept, is the use of covered-auto designation symbols on the declarations that tell you exactly which vehicles each coverage applies to. Rather than listing every vehicle for every coverage, the BACF uses numbered symbols.
| Symbol | Means |
|---|---|
| 1 | Any auto (broadest, used for liability) |
| 2 | Owned autos only |
| 3 | Owned private passenger autos only |
| 4 | Owned autos other than private passenger |
| 5 | Owned autos subject to no-fault |
| 6 | Owned autos subject to compulsory UM |
| 7 | Specifically described autos |
| 8 | Hired autos only |
| 9 | Nonowned autos only |
How the Symbols Work
Each coverage line on the BACF declarations is assigned a symbol that defines the covered autos for that coverage. Symbol 1 (any auto) is the broadest and is typically used for liability, because it covers owned, hired, and nonowned autos, including vehicles the business does not yet own. Symbol 7 (specifically described autos) limits coverage to the scheduled vehicles and is common for physical damage, since an insurer will pay collision and comprehensive only on identified vehicles. Symbol 8 (hired) and Symbol 9 (nonowned) extend coverage to rented vehicles and employees' personal cars used for business.
The exam tests which symbol provides the needed scope, especially that Symbol 1 is the broadest liability choice and that physical damage is usually written on Symbol 7.
Hired and Nonowned Autos
Hired auto coverage (Symbol 8) applies to autos the business leases, hires, rents, or borrows, important for a company that rents trucks. Nonowned auto coverage (Symbol 9) applies to autos the business does not own, lease, or borrow but that are used in its business, principally employees' personal vehicles driven on company errands. A business whose employees run errands in their own cars needs Symbol 9 so the company's policy responds to the company's vicarious liability, while the employee's personal auto policy remains primary for the employee.
Newly Acquired Autos
When a business acquires a new vehicle, coverage depends on the symbol. Under Symbol 1 (any auto), a newly acquired vehicle is automatically covered for liability. Under Symbol 7 (specifically described autos), a newly acquired auto is covered only if the insurer already insures all the insured's autos or the insured asks to add it within a stated period (commonly 30 days). The exam tests this interaction between the symbol and the automatic coverage of new vehicles.
Reading a BACF Symbol Question
The exam presents a fleet, a coverage need, and a set of symbols, then asks which symbol applies or whether a particular auto is covered. The method is to match the symbol on each coverage line to the vehicle in question: is the vehicle owned (2, 3, 4), specifically scheduled (7), hired (8), nonowned (9), or any auto (1)? Because liability is usually Symbol 1 and physical damage usually Symbol 7, a hired or employee-owned vehicle is typically covered for liability (Symbol 1) but not for physical damage (Symbol 7) unless hired-auto physical damage is added.
Mastering the symbol chart and these defaults is the single highest-yield skill in the commercial auto section, and it explains most BACF coverage outcomes the exam tests.
On a Business Auto Coverage Form, which covered-auto symbol provides the broadest LIABILITY coverage, including owned, hired, nonowned, and newly acquired autos?
A company's employees run business errands in their own personal cars. Which covered-auto symbol extends the company's policy to this exposure?
Mastering the Covered-Auto Symbols
The Business Auto Coverage Form's defining feature is the covered-auto symbol system: each coverage line on the declarations carries a numbered symbol defining the vehicles it applies to. Symbol 1 (any auto) is the broadest and is typically used for liability, covering owned, hired, nonowned, and newly acquired autos. Symbol 7 (specifically described autos) limits coverage to scheduled vehicles and is common for physical damage. Symbol 8 (hired) and Symbol 9 (nonowned) extend to rented vehicles and employees' personal cars used for business.
Newly acquired autos depend on the symbol: under Symbol 1 a new vehicle is automatically covered for liability, while under Symbol 7 it is covered only if the insurer already insures all the insured's autos or the insured asks to add it within a stated period (commonly 30 days).
| Symbol | Scope |
|---|---|
| 1 | Any auto (broadest; liability) |
| 2 | Owned autos only |
| 7 | Specifically described autos (physical damage) |
| 8 | Hired autos |
| 9 | Nonowned autos (employees' personal cars) |
Because liability is usually Symbol 1 and physical damage usually Symbol 7, a hired or employee-owned vehicle is typically covered for liability but not for physical damage unless hired-auto physical damage is added. The exam presents a fleet, a coverage need, and a set of symbols, then asks which symbol applies or whether a particular auto is covered. Match the symbol on each coverage line to the vehicle, owned, scheduled, hired, nonowned, or any auto, and apply the defaults. Mastering the symbol chart and these defaults is the single highest-yield skill in the commercial auto section.