Commercial Auto Coverages, Garage & Motor Carrier
Key Takeaways
- The BACF provides liability and physical damage (comprehensive/specified causes, collision, towing), with covered autos defined by symbol and insureds including permissive users.
- Garage and Auto Dealers forms combine auto liability, general liability, and garagekeepers coverage for dealers and repair shops.
- Garagekeepers coverage insures liability for damage to customers' vehicles in the garage's care, the exposure the CGL excludes.
- Motor carriers use the Motor Carrier Coverage Form, and the MCS-90 endorsement guarantees payment to the public up to the federal minimum.
Liability and Physical Damage Under the BACF
Once the covered-auto symbols are set, the BACF provides familiar coverages adapted to commercial use. Liability pays sums the insured is legally obligated to pay for bodily injury or property damage caused by an accident and resulting from the ownership, maintenance, or use of a covered auto, and it provides a defense. Physical damage is written as comprehensive (other than collision, also called specified-causes-of-loss in a narrower version), collision, and towing.
The structure parallels the personal auto policy, but the covered autos are defined by symbol and the insureds include the business and its permissive users.
| BACF coverage | Pays for |
|---|---|
| Liability | BI/PD the insured is liable for, plus defense |
| Comprehensive (OTC) | Loss other than collision (theft, fire, hail, animal) |
| Specified causes of loss | Narrower named-peril physical damage |
| Collision | Impact or overturn of a covered auto |
| Trailer interchange | Liability for trailers in the insured's care under interchange agreements |
Who Is an Insured
Under the BACF, insureds include the named insured for any covered auto, anyone using a covered auto the insured owns, hires, or borrows with permission (with exceptions such as the owner of a hired auto and employees using their own vehicles, who are covered only in limited ways), and anyone liable for the conduct of an insured but only to the extent of that liability. The exam tests that a permissive driver of a company vehicle is an insured, while the owner of a vehicle the insured merely hires is generally not.
Garage Coverage and Garagekeepers
Auto dealers and repair shops need specialized coverage because the CGL excludes auto exposures and the BACF does not address their unique risks. The Garage Coverage Form (and the broader Auto Dealers form) combines auto liability, general liability for the premises and operations, and garagekeepers coverage. Garagekeepers coverage insures the business's liability for damage to customers' vehicles left in its care, custody, or control for service, repair, or storage, the exposure the CGL excludes.
Garagekeepers can be written on a legal-liability basis (pays only if the garage is legally liable), direct primary, or direct excess basis, and the exam tests that garagekeepers fills the care-custody-control gap for customers' autos.
Motor Carrier and Trucking
Trucking operations are insured under the Motor Carrier Coverage Form (which largely replaced the older Truckers form) for businesses that transport property for hire. Federal law requires interstate motor carriers to maintain minimum financial responsibility, evidenced by the MCS-90 endorsement, a federally mandated endorsement that guarantees the public will be paid for the carrier's negligence up to the federal limit even if a policy exclusion would otherwise apply; the insurer can then seek reimbursement from the insured.
The exam tests that the MCS-90 protects the public (not the insured) and ensures payment of the federal minimum, and that trailer interchange coverage handles liability for trailers swapped under interchange agreements. When a commercial auto scenario involves a repair shop or dealer (garage and garagekeepers), or a for-hire trucker (motor carrier and MCS-90), match the specialized form to the operation, because the standard BACF alone does not address these exposures.
A repair shop is liable for hail damage to customers' cars parked in its lot for service. Which coverage responds to the customers' vehicles?
The MCS-90 endorsement on a for-hire trucker's policy primarily protects whom, and to what extent?
Garage, Garagekeepers, and Motor-Carrier Forms
Once the symbols are set, the BACF provides liability and physical damage (comprehensive or specified-causes-of-loss, collision, and towing) for the covered autos, with insureds including the named insured and permissive users of owned, hired, or borrowed autos. But two operations need specialized forms the standard BACF does not address. Auto dealers and repair shops use the Garage or Auto Dealers form, which combines auto liability, premises and operations liability, and garagekeepers coverage.
Garagekeepers coverage insures the business's liability for damage to customers' vehicles in its care, custody, or control, the exposure the CGL excludes, and may be written on a legal-liability, direct-primary, or direct-excess basis. For-hire truckers use the Motor Carrier Coverage Form, and federal law requires the MCS-90 endorsement.
| Operation | Form/coverage |
|---|---|
| Dealer/repair shop | Garage / Auto Dealers form |
| Customers' cars in care | Garagekeepers coverage |
| For-hire trucking | Motor Carrier Coverage Form |
| Federal FR guarantee | MCS-90 endorsement |
The MCS-90 is tested for whom it protects: it guarantees the public is paid for the carrier's negligence up to the federal minimum even when a policy exclusion would otherwise bar payment, after which the insurer may seek reimbursement from the insured. Trailer interchange coverage handles liability for trailers swapped under interchange agreements.
When a commercial auto scenario involves a repair shop or dealer (garage and garagekeepers) or a for-hire trucker (motor carrier and MCS-90), match the specialized form to the operation, because the BACF alone does not reach these exposures.
Two operations need specialized commercial-auto forms the standard BACF does not reach. Auto dealers and repair shops use the Garage or Auto Dealers form, whose garagekeepers coverage insures liability for damage to customers' vehicles in the business's care, custody, or control, the exposure the CGL excludes, written on a legal-liability, direct-primary, or direct-excess basis.
For-hire truckers use the Motor Carrier Coverage Form, and the federally mandated MCS-90 endorsement guarantees the public is paid for the carrier's negligence up to the federal minimum even when a policy exclusion would otherwise bar payment, after which the insurer may seek reimbursement from the insured.