What it does
CA 04 42 provides that the following are not insureds under Covered Autos Liability:
- the United States of America or any of its agencies; and
- any U.S. government employee, including the named insured, for bodily injury or property damage from operating an auto, if the injury or damage results while the employee is acting as an employee and the Federal Tort Claims Act requires the U.S. Attorney General to defend the employee in any civil action that may be brought.
It modifies the auto dealers, business auto and motor carrier forms.
Who sees it
Rental companies whose vehicles are rented by federal employees on official travel, and businesses (often individuals who are federal employees) whose autos are used on government business. The federal government handles those claims under the Federal Tort Claims Act, so the auto policy steps aside.
Selling notes
Explain to the insured that the endorsement does not leave the injured party without recourse; it routes the claim to the United States. If a contract with a federal agency requires the contractor's auto insurance to cover agency employees, read the contract carefully against this exclusion.
