1. Forms
2. CA
3. CA-20-98

What the form is

The CA 20 98 is an endorsement to the standard Business Auto Policy (BAP) used in Louisiana. Its primary purpose is to address coverage for vehicles that are hired or rented by an employee in their own name while performing duties related to the conduct of the employer's business. This endorsement modifies the BAP in two key ways:

• Liability Coverage: It adds the employee as an "insured" while operating an auto hired or rented under a contract in that employee's name, with the employer's permission, for business-related duties.
• Physical Damage Coverage: For Hired Auto Physical Damage coverage, any auto hired or rented by an employee in their name for business purposes (with permission) is deemed to be a "covered auto you own". This is significant because it typically means the BAP will provide primary coverage for physical damage to the rented vehicle, rather than excess over any insurance the employee might have.

Classes of business it applies to

This endorsement is relevant for any business whose employees might rent vehicles in their personal names while conducting company business. Examples include:

• Companies with sales staff who travel and rent cars for client visits.
• Businesses that send employees to conferences or training where they might need to rent a vehicle.
• Firms whose employees occasionally use rental cars for local business errands when company-owned vehicles are unavailable.

For instance, if a marketing manager rents a car in her own name to attend an out-of-state industry conference on behalf of her employer, the CA 20 98 endorsement would help ensure the employer's BAP provides appropriate coverage for that rented vehicle.

Special considerations

• Primary vs. Excess: A key benefit of this endorsement is that it generally makes the BAP primary for physical damage to the employee-rented auto because the auto is "deemed to be a covered auto you own". Without this endorsement, coverage under the BAP for non-owned autos is often excess over other collectible insurance (like the employee's personal auto policy or insurance purchased from the rental company).
• Louisiana Specific: The search results indicate that CA 20 98 is specifically referenced as the Louisiana version of what might be known as CA 20 54 (Employee Hired Autos) in other states.
• Permission Required: Coverage typically applies when the auto is hired or rented with the employer's express or implied permission and while the employee is performing duties related to the business.

Key information for agents and underwriters

• Identifying Need: Agents should proactively discuss car rental practices with their commercial auto clients. If employees rent cars in their own names for business purposes, this endorsement should be recommended to avoid potential coverage gaps or disputes.
• Risk Assessment: Underwriters should be aware that this endorsement extends primary coverage. While it clarifies coverage, the frequency and nature of such rentals could be a rating consideration. However, some insurers may add this endorsement for no additional premium.
• Alternative Endorsements: In some situations, other endorsements like those broadening who qualifies as an insured (e.g., CA 99 33) might be considered, but CA 20 98 specifically addresses the employee-rented auto scenario by deeming the auto as "owned" for physical damage purposes, which is often preferable for ensuring primary coverage.
• Clarity: This endorsement helps clarify that the employer's BAP is intended to cover these situations, which can be ambiguous under an unendorsed policy, especially if the rental agreement is in the employee's individual name.