1. Forms
2. CA
3. CA-02-18

Form CA 02 18: Audio, Visual And Data Electronic Equipment Coverage Added Limits

1. What the form is

The CA 02 18 endorsement, titled "Audio, Visual And Data Electronic Equipment Coverage Added Limits," is a Commercial Auto insurance form used to increase the coverage limits for permanently installed audio, visual, or data electronic equipment in a covered auto. Standard commercial auto policies, such as the Business Auto Coverage Form (CA 00 01), typically provide a base level of coverage for such equipment, often with a sublimit (e.g., $1,000). This endorsement allows businesses to purchase higher limits for this specialized equipment, which can be significantly more valuable than what the base policy covers. It modifies the Physical Damage Coverage section of the underlying auto policy. The limits provided by this endorsement are in addition to the standard sublimits for such equipment found in the base policy.

2. Classes of business it applies to

This endorsement is relevant for a wide range of businesses that utilize vehicles with valuable, permanently installed electronic equipment. Examples include:

• Transportation and Logistics: Trucking companies with sophisticated GPS, fleet management systems, and in-cab communication devices. For instance, a long-haul trucking company might have installed advanced telematics systems worth several thousand dollars in each vehicle to monitor location, driver behavior, and fuel efficiency.
• Sales and Service Fleets: Businesses whose employees use vehicles equipped with mobile data terminals, specialized diagnostic equipment, or high-end sound systems for client presentations. A mobile pet grooming service, for example, might have custom-installed audio and visual systems for animal and client comfort.
• Emergency Services and Law Enforcement: While there's a specific endorsement for fire, police, and emergency vehicles (CA 20 02), some non-emergency support vehicles or private security vehicles might use CA 02 18 if they have enhanced, permanently installed electronic gear.
• Construction and Trades: Contractors with trucks or vans fitted with advanced navigation, communication, or mobile office setups.
• Businesses with Executive Vehicles: Companies providing vehicles to executives that are equipped with high-value entertainment or productivity-related electronics.

3. Special considerations

• Permanently Installed Equipment: Coverage typically applies only to equipment that is permanently installed in the vehicle. Portable equipment (like a laptop or a portable GPS unit) is generally not covered by this endorsement and would need coverage under a different policy (e.g., inland marine or business personal property).
• Valuation: It's crucial to accurately value the equipment to ensure adequate limits are purchased. Underinsurance can lead to significant out-of-pocket expenses at the time of a loss. Over-insurance results in paying unnecessary premiums.
• Relationship to CA 00 01: This endorsement modifies the CA 00 01 (Business Auto Coverage Form) or other similar commercial auto coverage forms (like the Auto Dealers Coverage Form or Motor Carrier Coverage Form). It does not provide standalone coverage.
• Policy Sublimits: The added limits provided by CA 02 18 are in addition to any existing sublimits for electronic equipment in the base policy. For example, if the base policy has a $1,000 sublimit and the CA 02 18 provides an additional $5,000 limit, the total coverage for a covered loss to the specified equipment would be $6,000, subject to the policy deductible.
• Deductibles: The policy's physical damage deductible will typically apply to losses covered under this endorsement.
• Specific Listing: The endorsement often includes a schedule where the covered auto and the specific added limit per loss for that auto are listed. This means the increased limit applies on a per-vehicle, per-loss basis.
• Exclusions: The standard exclusions in the commercial auto policy will still apply unless specifically modified by this endorsement.

4. Key information for agents and underwriters

• Risk Assessment: Underwriters will assess the value and type of the equipment. Higher value or more theft-prone equipment may lead to higher premiums or specific underwriting requirements (e.g., alarm systems, garaging requirements). The overall risk profile of the insured, including loss history and usage of the vehicles, will also be considered.
• Pricing: The premium for this endorsement is based on the amount of the added limit requested. Each scheduled vehicle will have an additional premium associated with the increased limit.
• Coverage Gaps: Agents should identify potential coverage gaps. If the equipment is not permanently installed, or if data itself (rather than the electronic equipment housing it) needs coverage, this endorsement may not be sufficient, and other coverage forms (e.g., cyber liability, miscellaneous property floaters) should be considered.
• Documentation: Encourage clients to maintain records, such as invoices or appraisals, for the installed equipment to substantiate its value in the event of a claim.
• Underwriting Guidelines: Insurers may have specific underwriting guidelines regarding the maximum limits they will offer under this endorsement or for certain types of equipment. Some insurers might have internal limits on the total value of electronic equipment they are willing to cover per vehicle or per policy. For example, one insurer's notice indicated that if their policy contained a coverage limit above $10,000 for Audio, Visual, and Data Electronic Equipment, the limit would be reduced to $10,000.
• Verify Installation: Underwriters may want to verify that the equipment is indeed permanently installed, as this is a key requirement for coverage under this endorsement.