Business Glossary

coverage for automobiles used by a business when a liability judgment arises out of the use of the automobile, or the automobile is subject to damage or destruction. The business can select coverage for any auto in use, whether business, personal, or hired. The policy is organized as follows:

Parts I, II, and III-define terms used in the policy, such as auto, accident, insured bodily injury, property damage, territorial limits of coverage.

Part IV liability insurance-in a liability judgment against the insured business and/or individual, the insurance company will pay the monetary damages up to the limit of the policy. Negligent acts and/or omissions of the insured business and/or individual must arise out of the ownership and operation of a covered auto, subject to specific exclusions.

Part V physical damage insurance-in the event of damage to an auto, the insurance company will pay under one of two categories: comprehensive insurance-damage resulting from fire, explosion, theft, vandalism, malicious mischief, windstorm, hail, earthquake, or flood; or collision insurance-damage resulting from colliding with another object or the overturning of the insured auto.

Part VI condition-stipulate what the policyholder must do in the event of a loss, such as give notice to the insurance company; submit the company; cooperate with the company in the event of a liability suit.

The BAP has been largely replaced by the business auto coverage form.

replacement for the earlier Family Automobile Policy (FAP) with these nine basic coverages:

1. Coverage A-Liability. (a) The company pays damages for which an insured becomes legally obligated because negligent acts or omissions resulted in bodily injury and/or property damage to a third party; (b) the company defends the insured against liability suits for damages caused to the third party, paying various expenses in this connection; and (c) vehicles covered include the insured's own cars, a newly acquired car, and a temporary substitute car.
2. Coverage B-Medical Payments. The company pays medical expenses for bodily injury incurred by the insured (including spouse and relatives) and any other person while they occupy the insured car.
3. Coverage C-Uninsured Motorist Coverage. The company pays damages that the insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle.
4. Coverage D-Comprehensive. The company pays for loss to the insured's car for all damages, in excess of a deductible amount, except due to collision.
5. Coverage E-Collision. The company pays for loss to the insured's car for all damages in excess of a deductible amount caused by collision.
6. Coverage F-Car Rental Expense (optional). The company pays for car rental up to a daily dollar limit, when the insured's car cannot run due to a loss incurred.
7. Coverage G-Death, Dismemberment, and Loss of Sight (optional). The company pays the insured or beneficiary for death or loss caused by an accident to the insured.
8. Coverage H-Total Disability (optional). The company pays the insured a monthly disability income benefit because of bodily injury in an accident while occupying or being struck by a motor vehicle.
9. Coverage I-Loss of Earnings (optional). The company pays the insured a percentage of his or her loss of monthly earnings because of bodily injury as the result of an accident while occupying or being struck by a motor vehicle.