Covered Autos Liability Coverage - Section 2
- Business Auto Coverage Form

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Read the Covered Autos Liability Coverage - Section 2 - Business Auto Coverage Form (CA 00 01 10 13)

Covered Autos Liability Coverage - Section 2 - Business Auto Coverage Form

Covered Autos Liability Coverage - Section 2 - Business Auto Coverage Form

The ISO Covered Autos Liability Coverage - Section 2 - Business Auto Coverage Form is a part of the Business Auto Coverage Form. If you have a commercial auto policy, you should at least have a basic understand of what, where and who is covered & what, where and who is excluded and other important language in the Covered Autos Liability Coverage - Section 2 - Business Auto Coverage Form. The section starts below here:


Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered.

Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations. The words "we", "us" and "our" refer to the company providing this insurance.

Other words and phrases that appear in quotation marks have special meaning. Refer to Section V - Definitions.

SECTION II - COVERED AUTOS LIABILITY COVERAGE

A. Coverage

We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of a covered "auto".

We will also pay all sums an "insured" legally must pay as a "covered pollution cost or expense" to which this insurance applies, caused by an "accident" and resulting from the ownership, maintenance or use of covered "autos". However, we will only pay for the "covered pollution cost or expense" if there is either "bodily injury" or "property damage" to which this insurance applies that is caused by the same "accident".

We have the right and duty to defend any "insured" against a "suit" asking for such damages or a "covered pollution cost or expense". However, we have no duty to defend any "insured" against a "suit" seeking damages for "bodily injury" or "property damage" or a "covered pollution cost or expense" to which this insurance does not apply.

We may investigate and settle any claim or "suit" as we consider appropriate. Our duty to defend or settle ends when the Covered Autos Liability Coverage Limit of Insurance has been exhausted by payment of judgments or settlements.

1. Who Is An Insured

The following are "insureds":

2. Coverage Extensions

a. Supplementary Payments

We will pay for the "insured":

  1. All expenses we incur.
  2. Up to $2,000 for cost of bail bonds (including bonds for related traffic law violations) required because of an "accident" we cover. We do not have to furnish these bonds.
  3. The cost of bonds to release attachments in any "suit" against the insured" we defend, but only for bond amounts within our Limit of Insurance.
  4. All reasonable expenses incurred by the "insured" at our request, including actual loss of earnings up to $250 a day because of time off from work.
  5. All court costs taxed against the "insured" in any "suit" against the "insured" we defend. However, these payments do not include attorneys' fees or attorneys' expenses taxed against the "insured".
  6. All interest on the full amount of any judgment that accrues after entry of the judgment in any "suit" against the "insured" we defend, but our duty to pay interest ends when we have paid, offered to pay or deposited in court the part of the judgment that is within our Limit of Insurance.

These payments will not reduce the Limit of Insurance.

b. Out-of-state Coverage Extensions

While a covered "auto" is away from the state where it is licensed, we will:

  1. Increase the Limit of Insurance for Covered Autos Liability Coverage to meet the limits specified by a compulsory or financial responsibility law of the jurisdiction where the covered "auto" is being used. This extension does not apply to the limit or limits specified by any law governing motor carriers of passengers or property.
  2. Provide the minimum amounts and types of other coverages, such as nofault, required of out-of-state vehicles by the jurisdiction where the covered "auto" is being used.

We will not pay anyone more than once for the same elements of loss because of these extensions.

B. Exclusions

This insurance does not apply to any of the following:

  1. Expected Or Intended Injury - "Bodily injury" or "property damage" expected or intended from the standpoint of the "insured".
  2. Contractual - Liability assumed under any contract or agreement. But this exclusion does not apply to liability for damages:
    • a. Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement; or
    • b. That the "insured" would have in the absence of the contract or agreement.
  3. Workers' Compensation - Any obligation for which the "insured" or the "insured's" insurer may be held liable under any workers' compensation, disability benefits or unemployment compensation law or any similar law.
  4. Employee Indemnification And Employer's Liability - "Bodily injury" to:
    • a. An "employee" of the "insured" arising out of and in the course of:
      1. Employment by the "insured"; or
      2. Performing the duties related to the conduct of the "insured's" business; or
    • b. The spouse, child, parent, brother or sister of that "employee" as a consequence of Paragraph a. above. This exclusion applies:
      1. Whether the "insured" may be liable as an employer or in any other capacity; and
      2. To any obligation to share damages with or repay someone else who must pay damages because of the injury.
      But this exclusion does not apply to "bodily injury" to domestic "employees" not entitled to workers' compensation benefits or to liability assumed by the "insured" under an "insured contract". For the purposes of the Coverage Form, a domestic "employee" is a person engaged in household or domestic work performed principally in connection with a residence premises.
  5. Fellow Employee - "Bodily injury" to:
    • a. Any fellow "employee" of the "insured" arising out of and in the course of the fellow "employee's" employment or while performing duties related to the conduct of your business; or
    • b. The spouse, child, parent, brother or sister of that fellow "employee" as a consequence of Paragraph a. above.
  6. Care, Custody Or Control - "Property damage" to or "covered pollution cost or expense" involving property owned or transported by the "insured" or in the "insured's" care, custody or control. But this exclusion does not apply to liability assumed under a sidetrack agreement.
  7. Handling Of Property - "Bodily injury" or "property damage" resulting from the handling of property:
    • a. Before it is moved from the place where it is accepted by the "insured" for movement into or onto the covered "auto"; or
    • b. After it is moved from the covered "auto" to the place where it is finally delivered by the "insured".
  8. Movement Of Property By Mechanical Device - "Bodily injury" or "property damage" resulting from the movement of property by a mechanical device (other than a hand truck) unless the device is attached to the covered "auto".
  9. Operations - "Bodily injury" or "property damage" arising out of the operation of:
    • a. Any equipment listed in Paragraphs 6.b. and 6.c. of the definition of "mobile equipment"; or
    • b. Machinery or equipment that is on, attached to or part of a land vehicle that would qualify under the definition of "mobile equipment" if it were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged.
  10. Completed Operations - "Bodily injury" or "property damage" arising out of your work after that work has been completed or abandoned. In this exclusion, your work means:
    • a. Work or operations performed by you or on your behalf; and
    • b. Materials, parts or equipment furnished in connection with such work or operations.
    • Your work includes warranties or representations made at any time with respect to the fitness, quality, durability or performance of any of the items included in Paragraph a. or b. above. Your work will be deemed completed at the earliest of the following times:
      1. When all of the work called for in your contract has been completed;
      2. When all of the work to be done at the site has been completed if your contract calls for work at more than one site; or
      3. When that part of the work done at a job site has been put to its intended use by any person or organization other than another contractor or subcontractor working on the same project.
      4. Work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed.
  11. Pollution -"Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants":
    • a. That are, or that are contained in any property that is:
      1. Being transported or towed by, handled or handled for movement into, onto or from the covered "auto";
      2. Otherwise in the course of transit by or on behalf of the "insured"; or
      3. Being stored, disposed of, treated or processed in or upon the covered "auto";
    • b. Before the "pollutants" or any property in which the "pollutants" are contained are moved from the place where they are accepted by the "insured" for movement into or onto the covered "auto"; or
    • c. After the "pollutants" or any property in which the "pollutants" are contained are moved from the covered "auto" to the place where they are finally delivered, disposed of or abandoned by the "insured". Paragraph a. above does not apply to fuels, lubricants, fluids, exhaust gases or other similar "pollutants" that are needed for or result from the normal electrical, hydraulic or mechanical functioning of the covered "auto" or its parts if:
      1. The "pollutants" escape, seep, migrate or are discharged, dispersed or released directly from an "auto" part designed by its manufacturer to hold, store, receive or dispose of such "pollutants"; and
      2. The "bodily injury", "property damage" or "covered pollution cost or expense" does not arise out of the operation of any equipment listed in Paragraphs 6.b. and 6.c. of the definition of "mobile equipment". Paragraphs b. and c. above of this exclusion do not apply to "accidents" that occur away from premises owned by or rented to an "insured" with respect to "pollutants" not in or upon a covered "auto" if:
        • (a) The "pollutants" or any property in which the "pollutants" are contained are upset, overturned or damaged as a result of the maintenance or use of a covered "auto"; and
        • (b) The discharge, dispersal, seepage, migration, release or escape of the "pollutants" is caused directly by such upset, overturn or damage.
    • War - "Bodily injury" or "property damage" arising directly or indirectly out of:
    • a. War, including undeclared or civil war;
    • b. Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or
    • c. Insurrection, rebellion, revolution, usurped power or action taken by governmental authority in hindering or defending against any of these.
  12. Racing - Covered "autos" while used in any professional or organized racing or demolition contest or stunting activity, or while practicing for such contest or activity. This insurance also does not apply while that covered "auto" is being prepared for such a contest or activity.
C. Limit Of Insurance

Regardless of the number of covered "autos", "insureds", premiums paid, claims made or vehicles involved in the "accident", the most we will pay for the total of all damages and "covered pollution cost or expense" combined resulting from any one "accident" is the Limit Of Insurance for Covered Autos Liability Coverage shown in the Declarations.

All "bodily injury", "property damage" and "covered pollution cost or expense" resulting from continuous or repeated exposure to substantially the same conditions will be considered as resulting from one "accident".

No one will be entitled to receive duplicate payments for the same elements of "loss" under this Coverage Form and any Medical Payments Coverage endorsement, Uninsured Motorists Coverage endorsement or Underinsured Motorists Coverage endorsement attached to this Coverage Part.

More On ISO Insurance Forms

You can download a copy of the entire form here: Business Auto Coverage Form.

You can find more ISO commercial auto insurance coverage forms here:

Covered Autos Liability Coverage - Section 2 - Business Auto Coverage Form - The Bottom Line

We hope this article on the Covered Autos Liability Coverage - Section 2 - Business Auto Coverage Form has been informative. Because ISO forms are used by many insurance companies, a lot of the language they contain has already been by interpreted by the courts. Meanings have been established for specific words and phrases which can make claim settlements and litigation easier.

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