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3. CA-00-01

Form CA 00 01: Business Auto Coverage Form

The Business Auto Coverage Form (CA 00 01) is a standard insurance form developed by the Insurance Services Office (ISO) and is a foundational component for providing commercial auto insurance. Its primary purpose is to offer liability and physical damage coverage for vehicles used in a commercial capacity. The form defines who is an insured, outlines coverage provisions, exclusions, and conditions, and specifies how limits of insurance apply. Coverage is activated based on the covered auto symbols selected and shown on the Declarations page (CA DS 03). These symbols designate the types of vehicles to which each purchased coverage applies.

Classes of Business It Applies To

The CA 00 01 is versatile and can be used by nearly any type of commercial entity to cover its auto exposures, whether the vehicles are owned, leased, hired, or non-owned. It is suitable for a wide array of businesses, including those that:

• Own and provide company cars to employees.
• Utilize vans and trucks to transport their own goods.
• Transport passengers (though specialized forms may be more appropriate for motor carriers of passengers).
• Lease vehicles to others (though, again, more specialized forms might be better suited depending on the specifics).

Real-world examples include:

• A local plumbing company with a fleet of service vans.
• A sales-driven organization that provides sedans to its outside sales team.
• A bakery that uses a van for deliveries.
• A construction company whose employees occasionally use their personal vehicles for company errands (non-owned auto exposure).

While broadly applicable, businesses like auto dealers or motor carriers often have more specialized forms available, such as the Auto Dealers Coverage Form (CA 00 25) or the Motor Carrier Coverage Form (CA 00 20), which may be more appropriate for their unique exposures. However, motor carriers can still opt to be covered under the CA 00 01.

Special Considerations

Several important considerations apply when using the CA 00 01:

• Covered Auto Symbols: The selection of the correct covered auto designation symbols on the Declarations (CA DS 03) is crucial. Each symbol has a specific meaning (e.g., Symbol 1 for "Any Auto" is the broadest, Symbol 7 for "Specifically Described Autos" is more restrictive). Failure to use the correct symbol can lead to unintended coverage gaps. For instance, if a business wants coverage for newly acquired vehicles during the policy period, specific symbols (like 1, 2, 3, 4, 5, 6, or 19) must be used.
• Contractual Requirements: Businesses often enter into contracts that require specific auto insurance coverage, such as naming another party as an additional insured or requiring the policy to be primary and non-contributory. The CA 00 01 itself provides limited additional insured status to those vicariously liable for the conduct of an insured. For broader additional insured coverage or to meet specific primary and non-contributory wording, endorsements like the CA 04 49 may be necessary.
• Hired and Non-Owned Autos: Coverage for hired autos (leased, hired, rented, or borrowed) and non-owned autos (such as employee vehicles used for business) is a common need and can be provided by selecting the appropriate symbols (typically Symbol 8 for Hired Autos and Symbol 9 for Non-Owned Autos). It's important to note that Symbol 8 does not cover autos leased, hired, rented, or borrowed from an employee, partner, or member of their household. Symbol 9 specifically addresses autos used in the business that the insured does not own, lease, hire, rent, or borrow, which often includes employee-owned vehicles used for business purposes.
• Mobile Equipment: The CA 00 01 provides liability coverage for "mobile equipment" while it is being carried or towed by a covered auto. This is important because the Commercial General Liability (CGL) policy generally excludes auto exposures but covers mobile equipment. The distinction between an "auto" and "mobile equipment" can be complex and is crucial for determining which policy responds.
• Newly Acquired Vehicles: If certain symbols (1, 2, 3, 4, 5, 6, or 19) are shown on the declarations, autos of the type described by those symbols that the named insured acquires during the policy period are automatically covered.
• Out-of-State Coverage: The form automatically adjusts coverage to meet the minimum financial responsibility law limits of other states when a covered auto is being operated there. It also provides the minimum amounts and types of other coverages, like no-fault, required by another jurisdiction. This extension does not apply to laws governing motor carriers of passengers or property.
• Related Forms: The Business Auto Declarations (CA DS 03) is integral to the CA 00 01, as it shows the selected coverages, limits, and covered auto symbols. The Common Policy Conditions (IL 00 17) also apply to the Business Auto Coverage Part and contain general conditions applicable to many commercial lines policies.

Key Information for Agents and Underwriters

• Risk Assessment: Underwriters need to carefully evaluate the nature of the business, the types of vehicles used, their typical radius of operation, driver qualifications, and loss history. The selection of covered auto symbols directly impacts the breadth of coverage and, therefore, the risk. Symbol 1 ("Any Auto") presents the highest exposure and is often used cautiously by insurers, especially for physical damage coverage.
• Pricing: Premiums will vary based on the coverages selected, limits, deductibles, covered auto symbols, vehicle types, usage, territory, and the insured's loss experience. For hired auto liability, the premium can be based on the "cost of hire."
• Coverage Gaps: Agents must be diligent in identifying potential coverage gaps. For example, if a business only selects Symbol 7 ("Specifically Described Autos"), there would be no automatic coverage for newly acquired vehicles unless specifically added. Similarly, personal use of a company car by an employee might need clarification, or if an employee uses their own car for business (non-owned auto exposure), Symbol 9 is critical. Misunderstanding the definition of "auto" versus "mobile equipment" can also lead to gaps.
• Endorsements: The CA 00 01 is a base form, and various endorsements are often necessary to tailor coverage to the specific needs of the insured. Examples include endorsements for medical payments, uninsured/underinsured motorists coverage (which are not automatically included in the CA 00 01), or to add specific additional insureds. Endorsement CA 99 54 (Covered Auto Designation Symbol) can be used to add a manuscript symbol (Symbol 10) for specifically described situations.
• Exclusions: Agents and underwriters must be familiar with the form's exclusions, such as those for expected or intended injury, contractual liability (with some exceptions for "insured contracts"), workers' compensation obligations, and damage to property in the insured's care, custody, or control (unless sidetrack agreement liability is assumed). Racing and stunting activities are also excluded.
• Policy Structure: The CA 00 01 is typically part of a Commercial Auto Policy that also includes the Declarations (CA DS 03), Common Policy Conditions (IL 00 17), and any applicable endorsements.
• Recent Changes: ISO periodically updates its forms. For example, the 11/20 edition of the CA 00 01 included changes to automatic trailer liability coverage (basing it on Gross Vehicle Weight Rating instead of load capacity) and addressed potential gaps for long-term leased vehicles.