12.5 Commercial Auto Endorsements
Key Takeaways
- Drive Other Car (DOC) endorsement (CA 99 10) extends liability, medical payments, and UM to named individuals (often executives) driving non-owned autos, filling the gap when a person has no personal auto policy of their own.
- Hired Auto and Employees as Insured (CA 20 48) makes employees insureds when using their own autos in the business; the Individual Named Insured endorsement (CA 99 17) gives sole-proprietor owners and family near-personal-auto protection.
- Rental Reimbursement (CA 99 23) pays a daily/maximum amount for a substitute vehicle after a covered physical damage loss; Auto Loan/Lease Gap (CA 04 01) pays the difference between the loan balance and the auto's ACV after a total loss.
- Mobile Equipment Subject to Compulsory Insurance (CA 99 14) and Pollution Liability-Broadened Coverage for Covered Autos (CA 99 48) modify standard pollution and equipment treatment.
- Endorsements only attach when the schedule lists the covered individuals or limits; an unscheduled DOC name has no coverage, a common testing trap.
Why Endorsements Matter
The Business Auto Coverage Form is deliberately standardized, so brokers tailor it with ISO endorsements that close specific gaps. The exam tests the purpose, common form number, and trigger of each.
Endorsements Covering People
| Endorsement | Form | What It Does |
|---|---|---|
| Drive Other Car (DOC) | CA 99 10 | Extends liability, med-pay, and UM to named individuals while driving autos the policy does not cover — typically executives furnished a company car who have NO personal auto policy |
| Individual Named Insured | CA 99 17 | Gives a sole-proprietor named insured and resident family near-personal-auto protection (DOC-style, plus coverage for the family) |
| Employees as Insureds | CA 99 33 | Makes employees insureds for liability while using THEIR OWN autos in the insured's business (broadens the otherwise-excluded employee) |
Drive Other Car trap: DOC is scheduled — only the individuals listed get coverage. A new executive who is not added to the DOC schedule has no protection when driving a borrowed or rented car personally.
Endorsements Covering Physical Damage and Value
| Endorsement | Form | What It Does |
|---|---|---|
| Rental Reimbursement | CA 99 23 | Pays a scheduled daily amount up to a maximum for a substitute auto after a covered physical damage loss |
| Auto Loan/Lease Gap | CA 04 01 | After a total loss, pays the difference between the unpaid loan/lease balance and the auto's ACV (less certain items) |
| Tapes, Records and Discs | CA 99 60 | Restores limited coverage for electronic media in the auto |
Worked Example — Loan/Lease Gap
A business financed a $48,000 truck. After 18 months the loan balance is $39,000, but the truck's ACV is only $30,000. The truck is totaled; the collision deductible is $1,000.
- Standard physical damage pays ACV less deductible: $30,000 − $1,000 = $29,000.
- Without gap coverage, the business still owes the lender $39,000 − $29,000 = $10,000 out of pocket.
- Auto Loan/Lease Gap (CA 04 01) pays that $10,000 difference (subject to the form's exclusions for overdue payments, carry-over balances, and the deductible), eliminating the shortfall.
Endorsements Modifying Pollution and Equipment
- Pollution Liability – Broadened Coverage for Covered Autos (CA 99 48): narrows the broad pollution exclusion so that pollution caused by a covered auto's accident (for example, leaking fuel after a crash) can be covered.
- Mobile Equipment Subject to Compulsory or Financial Responsibility Laws (CA 99 14): brings certain mobile equipment that the state forces to be registered/insured under the auto form.
Putting It Together
A typical commercial account might attach DOC for its officers, Employees as Insureds for staff using personal cars, Rental Reimbursement on key delivery vehicles, and Loan/Lease Gap on financed trucks. The recurring exam theme: an endorsement only works for the scheduled individuals, vehicles, or limits — coverage never arises for an unlisted name or a limit left blank.
Hired Auto Endorsements
Two endorsements address rented and borrowed vehicles. Hired Autos Specified as Covered Autos You Own treats a long-term leased vehicle as though the insured owned it, so physical damage and the newly-acquired rules apply. Employee Hired Autos extends coverage to vehicles an employee rents or hires in the course of the insured's business, closing a gap when an employee signs the rental contract in their own name. Without it, a rental booked by an employee may not be a "hired auto" of the named insured at all.
Symbol-Driven vs. Endorsement-Driven Coverage
A frequent point of confusion: some exposures are solved by choosing a broader symbol and others by adding an endorsement. Hired and non-owned liability is solved with Symbols 8 and 9 (or Symbol 1), not an endorsement. But making the employee an insured for their own auto, or protecting an executive with no personal policy, requires the Employees as Insureds or Drive Other Car endorsements respectively, because no symbol grants those people insured status. Knowing whether a gap is closed by a symbol or by an endorsement is exactly the kind of distinction the exam rewards.
Audit and Premium-Adjustment Endorsements
Because fleets change mid-term, commercial auto premiums are often auditable. Endorsements and policy conditions establish whether the policy is non-auditable (flat), or subject to audit with a deposit premium adjusted at expiration based on the actual count of power units. Larger fleets may also be eligible for experience rating, where an experience modification factor above or below 1.00 adjusts manual premium based on the fleet's own loss history; a mod of 1.20 raises premium 20% for a worse-than-average loss record, while 0.85 rewards a clean fleet with a 15% credit.
A company executive is furnished a company car and has no personal auto policy. The company wants the executive protected when driving a friend's borrowed car on personal time. Which endorsement applies?
A financed truck is totaled. ACV is $28,000, the deductible is $1,000, and the outstanding loan balance is $34,000. With an Auto Loan/Lease Gap endorsement, what does the gap endorsement pay toward the loan shortfall?
Frequently Tested Commercial Auto Endorsements
Key Business Auto endorsements adjust who and what is covered:
| Endorsement | Effect |
|---|---|
| Drive Other Car (DOC) | Extends coverage to an executive (and family) who has no personal auto, while driving autos not owned by the named insured |
| Hired Auto / Non-Owned Auto | Adds liability for autos rented or borrowed, or employees' autos used for business |
| Individual Named Insured | Adds personal-auto-style coverage for an individual named insured and family |
| Mobile Equipment | Clarifies coverage for equipment that may otherwise fall between auto and GL forms |
| Pollution Liability – Broadened Coverage for Covered Autos | Restores limited pollution coverage from cargo |
Drive Other Car (DOC) solves the gap for a company executive who relies on a company car and has no personal auto policy — it provides the liability, med pay, UM, and physical damage the executive would otherwise lack when driving a non-owned vehicle.
Trap: the hired and non-owned auto endorsements are essential when employees run errands in their own or rented cars; the BAP's symbol selection alone may leave a gap that these endorsements close.
A corporate executive drives only a company-furnished car and has no personal auto policy. Which endorsement extends personal-auto-type protection to the executive (and family) when using non-owned vehicles?