9.1 Business Auto Policy Overview
Key Takeaways
- The Business Auto Policy (BAP), written on ISO form CA 00 01, provides liability and physical damage coverage for vehicles used in business and is the commercial cousin of the Personal Auto Policy (PAP).
- The BAP applies coverage through covered-auto designation symbols (1-9) entered on the declarations next to each coverage — a feature unique to commercial auto.
- WHO IS AN INSURED is broader than the PAP: it includes the named insured, anyone using an owned/hired covered auto with permission, and anyone liable for the conduct of an insured.
- Supplementary payments — defense, $2,000 bail bonds, and $250/day loss of earnings — are paid IN ADDITION to the liability limit, not inside it.
- Employees are NOT insureds for liability when using their OWN autos for business; their personal auto policy is primary and the employer relies on Symbol 9.
What the Business Auto Policy Is
The Business Auto Policy (BAP) is the Insurance Services Office (ISO) standard form — current edition CA 00 01 — used to insure cars, trucks, and vans owned, hired, or used by a business. It is the commercial counterpart to the Personal Auto Policy (PAP), but it solves a problem the PAP never faces: a business may own zero, five, or five hundred vehicles, plus rent and borrow others. Rather than list every vehicle by coverage, the BAP uses covered-auto designation symbols to describe categories of autos.
A single BAP can insure many things at once: third-party liability, physical damage to the insured's own autos, medical payments, uninsured/underinsured motorist (UM/UIM) coverage, and optional endorsements such as drive-other-car or rental reimbursement.
How the Form Is Built
The BAP is modular — coverages are activated only when a symbol and a limit appear on the declarations.
| Section | What It Does |
|---|---|
| Item One – Declarations | Named insured, address, policy period, and the limits/symbols selected |
| Section I – Covered Autos | Defines the nine symbols and the 30-day newly-acquired-auto rule |
| Section II – Covered Autos Liability | Third-party bodily injury and property damage |
| Section III – Physical Damage | Comprehensive, collision, specified causes of loss |
| Section IV – Conditions | Duties after loss, two-or-more-coverage-forms, transfer of rights |
| Section V – Definitions | 'Accident,' 'auto,' 'bodily injury,' 'property damage,' 'loss' |
Covered-Auto Designation Symbols (1-9)
Every coverage line on the declarations carries its own symbol, so liability can be written far broader than physical damage.
| Symbol | Category | Plain Meaning |
|---|---|---|
| 1 | Any Auto | All autos — owned, hired, AND non-owned (broadest) |
| 2 | Owned Autos Only | Every auto the insured owns, any type |
| 3 | Owned Private Passenger Only | Owned cars/SUVs, not trucks |
| 4 | Owned, Other Than Private Passenger | Owned trucks, vans, specialty rigs |
| 5 | Owned Autos Subject to No-Fault | Owned autos in PIP/no-fault states |
| 6 | Owned Autos Subject to Compulsory UM | Owned autos where UM is mandatory |
| 7 | Specifically Described Autos | ONLY vehicles listed on the schedule |
| 8 | Hired Autos Only | Rented, leased, or borrowed (not owned) |
| 9 | Non-Owned Autos Only | Employee/partner personal autos used for business |
Exam trap: Symbol 1 is the only symbol that automatically pulls in hired and non-owned exposure. A risk written Symbol 2 has a gap for rentals (needs 8) and for employee cars (needs 9).
Who Is an Insured
The BAP's insured definition is intentionally broad. There are three tiers:
- The named insured — for ANY covered auto.
- Permissive users — anyone using a covered auto the named insured owns, hires, or borrows WITH permission.
- Anyone legally responsible for the conduct of an insured, but only to the extent of that liability (for example, an employer liable for an employee's covered driving).
The key carve-out: the owner of a hired or borrowed auto is generally NOT an insured (so a rental company is not an insured under your BAP), and an employee is not an insured for liability while driving the employee's OWN auto. For employee-owned cars the employer must rely on Symbol 9 (non-owned), which protects the employer's vicarious liability — not the employee. The employee's personal auto policy is primary.
Other Core Coverages Available
Beyond liability and physical damage, the BAP can activate several first-party coverages, each shown on the declarations only when a limit is entered:
| Coverage | What It Pays |
|---|---|
| Auto Medical Payments | Reasonable medical/funeral expenses for the insured and occupants, regardless of fault |
| Uninsured/Underinsured Motorist (UM/UIM) | The insured's BI (and sometimes PD) when an at-fault driver is uninsured or underinsured |
| No-Fault / PIP | State-mandated personal injury protection where required (activated by Symbol 5) |
| Drive Other Car (DOC) | Liability and med-pay for named individuals driving non-owned autos — common for owners of corporate vehicles who have no personal auto |
Rating and Audit
Commercial auto is fleet-rated or schedule-rated depending on the number of power units. Larger fleets (typically nine or more self-propelled vehicles) are eligible for fleet rating, which blends the loss experience of the whole fleet. The premium shown at inception is a deposit premium; because vehicles are added and deleted mid-term, many BAPs are auditable, with the final premium adjusted at expiration based on actual exposure.
BAP vs. Personal Auto Policy
| Feature | BAP (CA 00 01) | Personal Auto Policy |
|---|---|---|
| Covered autos | Selected by symbol | Listed by VIN |
| Who is insured | Broad — permissive users, vicarious parties | Narrow — named insured + family/permissive |
| Business use | Primary purpose | Generally restricted/excluded |
| Loading & unloading | Expressly covered | Covered, narrower scope |
| Rating basis | Fleet rating available | Per-vehicle |
| New vehicles | Auto 30 days (Symbols 2/3/4) | Auto for new/replacement subject to rules |
Which covered-auto designation symbol provides the BROADEST liability coverage under a Business Auto Policy?
An employee drives their personal car on a business errand and causes an accident. The employer's BAP carries Symbol 9 for liability. Who is protected?
Under the BAP, which amount is paid IN ADDITION to the liability limit as a supplementary payment?