1. Forms
2. CA
3. CA-20-48

Form CA 20 48: Designated Insured For Covered Autos Liability Coverage

1. What the form is

The CA 20 48, titled "Designated Insured For Covered Autos Liability Coverage," is an endorsement to a Commercial Auto policy. Its primary purpose is to formally name a person or organization on the policy as an "insured" for liability coverage arising out of the use of "covered autos." However, it's crucial to understand that this endorsement generally does not broaden the scope of who is considered an "insured" under the policy. Instead, it confirms that the person or organization listed in the endorsement's schedule is an insured, but only to the extent that they already qualify as an "insured" under the "Who Is An Insured" provision of the underlying auto coverage form (e.g., CA 00 01 Business Auto Coverage Form). In essence, it provides a written acknowledgment or "proof" of insured status for parties who might already be covered due to their vicarious liability for the conduct of a named insured or a permissive user of a covered auto.

Some industry experts consider this endorsement to be largely superfluous, as it often just restates coverage that is already implicitly provided by the standard Business Auto Policy (BAP) language. The "Who Is An Insured" section of the BAP typically includes anyone liable for the conduct of an insured. The CA 20 48 is often used to satisfy contractual requirements where a party demands to be specifically named as an insured, even if the policy already covers them.

2. Classes of business it applies to

This endorsement can be used with various commercial auto coverage forms, including the Business Auto Coverage Form, Garage Coverage Form, Motor Carrier Coverage Form, and Truckers Coverage Form. It is relevant across a wide array of industries where a business (the named insured) might need to provide evidence of insurance coverage to another party (the designated insured) due to their relationship and potential for vicarious liability. Real-world examples include:

• Contractors and Subcontractors: An upper-tier contractor might require a lower-tier subcontractor to name them as a designated insured on the subcontractor's commercial auto policy. This is to address the upper-tier contractor's potential vicarious liability for accidents caused by the subcontractor's vehicles while performing work for them.
• Businesses Hiring Transportation Services: A company that hires a trucking firm to transport its goods might request to be a designated insured on the trucking firm's auto policy.
• Franchisors and Franchisees: A franchisor might require its franchisees to list the franchisor as a designated insured.
• Property Owners and Managers: A property owner might require a tenant or a contractor performing work on their premises to name them as a designated insured if vehicles will be used in a way that could create liability for the property owner. For example, a real estate owner engaging a subcontractor for tasks involving vehicle use might contractually require this.
• Municipalities or Government Entities: When private companies perform services for government entities using vehicles (e.g., waste management, road work), the government entity might require designated insured status.

3. Special considerations

• Limited Scope of Coverage: It is paramount to understand that the CA 20 48 generally only provides coverage for the designated insured's vicarious liability arising from the named insured's (or other covered "insured's") use of covered autos. It typically does not cover the designated insured for their own direct negligence or for liability arising from autos they own, hire, or borrow (unless those autos are "covered autos" under the named insured's policy and the designated insured's liability stems from the named insured's conduct).
• Not an "Additional Insured" Endorsement in the CGL Sense: While often requested in situations similar to when an "additional insured" endorsement is sought on a Commercial General Liability (CGL) policy, the CA 20 48 functions differently. The standard BAP already includes broad language defining who is an insured, which often encompasses those vicariously liable for the named insured. The CA 20 48 serves more as a formal listing or confirmation rather than a true expansion of coverage.
• Contractual Requirements: The most common reason for using this endorsement is to satisfy a contractual obligation where one party requires another to name them as an insured on their auto policy. It's often seen as a "peace of mind" endorsement for the party requesting it, providing them with a specific document naming them.
• Relationship to CA 00 01: The CA 00 01 (Business Auto Coverage Form) contains the "Who Is An Insured" provisions. The CA 20 48 directly references these provisions, stating that the designated person or organization is an insured only to the extent they qualify under those existing definitions.
• Potential for Misunderstanding: There's a risk that the party being named as a "designated insured" might mistakenly believe they have broader coverage than the endorsement actually provides. Clear communication about the endorsement's limitations is essential.
• Situations Where It Might Be Redundant: If a party is already clearly an "insured" under the standard policy language (e.g., someone vicariously liable for the named insured's operation of a covered auto), the CA 20 48 doesn't add new coverage for them. Some argue it is an "illusion of coverage" or an "overwhelmingly useless" endorsement because it doesn't amend the underlying coverage.

4. Key information for agents and underwriters

• Risk Assessment: While the endorsement itself might not significantly broaden coverage beyond what the policy already offers for vicarious liability, underwriters should still consider the nature of the relationship between the named insured and the designated insured. Understanding why the designated insured status is being requested can provide insights into the potential for claims involving that party.
• Pricing: Generally, there isn't a significant premium charge associated directly with adding the CA 20 48 endorsement itself, as it's often viewed as clarifying existing coverage rather than adding new, broader exposures. However, the underlying risk profile of the named insured, which necessitates such requests, is the primary driver of the policy premium.
• Coverage Gaps: Agents should ensure that both the named insured and the designated insured understand the limitations of this endorsement. If the designated insured requires coverage for their own direct negligence or for their owned vehicles, this endorsement will not provide it. They would need their own auto policy or other relevant endorsements.
• Underwriting Guidelines: Underwriters may accept the CA 20 48 when contractually required, recognizing its limited scope. However, they should be cautious if the request seems to imply an expectation of broader coverage than the endorsement provides. It's important to ensure the named insured's operations and the use of "covered autos" align with the policy terms.
• Alternative Endorsements: In some situations, other endorsements might be more appropriate if the intent is to provide more specific or broader coverage to another party (e.g., lessor endorsements if the designated party is leasing vehicles to the named insured). For example, CA 99 16 (Hired Autos Specified As Covered Autos You Own) adds the owner of a leased auto as an insured.
• Clarity in Communication: Agents play a crucial role in explaining to their clients (the named insureds) and to the parties requesting designated insured status what the CA 20 48 actually does and, more importantly, what it does not do. It reaffirms vicarious liability coverage that likely already exists.
• Documentation: Even if considered redundant by some, issuing the CA 20 48 provides formal documentation that can satisfy contractual requirements and avoid disputes over whether a party was intended to be considered an insured for vicarious liability claims.