Form CA 99 17: Individual Named Insured
The CA 99 17 Individual Named Insured endorsement is a crucial component of a Commercial Auto policy when the named insured is an individual, typically a sole proprietor. Its primary purpose is to bridge coverage gaps that arise because a standard Business Auto Policy (BAP) does not provide the same breadth of coverage as a Personal Auto Policy (PAP), particularly for the personal use of vehicles and for family members. This endorsement extends liability and physical damage coverages to the individual named insured and their resident family members, mirroring some key aspects of a PAP. It's important to note that this endorsement is generally added at no additional premium charge.
Classes of Business It Applies To
This endorsement is specifically designed for situations where an individual is the named insured on a Business Auto, Motor Carrier, or Truckers policy. This most commonly occurs with:
- Sole Proprietors: Individuals who own and operate their businesses without forming a separate legal entity. For example, a self-employed plumber, electrician, consultant, or freelance photographer who uses their vehicle for both business and personal use would benefit from this endorsement. If they only have a BAP, their personal use of non-owned vehicles or use by family members might not be adequately covered without the CA 99 17.
- Individuals with all vehicles on a BAP: Sometimes, an individual may choose to insure all their vehicles, including private passenger types, under a BAP and not carry a separate PAP. In such cases, the CA 99 17 is essential to provide PAP-like coverages.
- Closely-held corporations (in specific circumstances): While primarily for sole proprietors, it can sometimes be used for closely-held corporations if the principal officers (who own the vehicles) are also listed as named insureds on the policy. However, this application requires careful underwriting.
For example, consider a self-employed wedding planner who uses her personal vehicle for her business, such as transporting supplies and meeting clients. She also uses the car for personal errands and family trips. Without a PAP, the CA 99 17 endorsement on her BAP would provide necessary coverage for her personal use and for her resident family members using the vehicle or other non-owned vehicles.
Special Considerations
There are several important factors to consider when using the CA 99 17:
- Existence of a PAP: This endorsement is most critical when the individual named insured does not have a separate Personal Auto Policy. If a PAP is in place, there may be overlapping coverage, and the interaction between the two policies would need careful review. The CA 99 17 aims to eliminate the need for a sole proprietor to maintain both a PAP and a BAP.
- Family Members: The endorsement extends coverage to "family members," defined as persons related to the named insured by blood, marriage, or adoption who are residents of the household, including wards or foster children.
- Non-Owned Autos: Coverage for non-owned autos (e.g., a rental car used on vacation or borrowing a friend's car) is a key feature. However, there are exclusions, such as for autos owned by family members, autos furnished or available for regular use, or autos used in an auto business.
- Private Passenger Type Vehicles: For certain coverages to apply, such as the "personal auto coverage" extensions, there usually needs to be an owned auto of the "private passenger type" insured on the BAP. This typically includes pickups and vans not used for business, other than farming or ranching.
- Fellow Employee Exclusion Modified: The standard BAP excludes coverage for bodily injury to a fellow employee. The CA 99 17 modifies this exclusion so it does not apply to bodily injury to fellow employees of the named insured or their family members.
- Pollution Exclusion Modified: The endorsement can modify the pollution exclusion for covered autos of a private passenger type.
- Limitations: While the CA 99 17 broadens coverage, it doesn't perfectly replicate a PAP. There might still be situations where a separate PAP is necessary, for instance, if family members own private passenger autos not covered under the BAP.
A real-world example: If the sole proprietor's teenage daughter, who is a resident of the household, borrows a friend's car for personal use and has an accident, the CA 99 17 on her parent's BAP could provide liability coverage, assuming no other exclusions apply.
Key Information for Agents and Underwriters
Agents and underwriters should be mindful of the following when dealing with the CA 99 17:
- Mandatory Attachment: When the named insured is an individual, attaching the CA 99 17 is often considered mandatory to avoid significant coverage gaps.
- No Additional Premium: Typically, there is no additional premium charge for adding this endorsement.
- Underwriting Household Exposure: Since coverage is extended to family members, underwriters need to assess the personal auto exposures of the entire household. This includes obtaining Motor Vehicle Reports (MVRs) and loss histories for all licensed household members.
- Distinction from Drive Other Car (DOC) Coverage (CA 99 10): It's crucial to differentiate the CA 99 17 from the CA 99 10 (Drive Other Car - Broadened Coverage for Named Individuals). The CA 99 10 is typically used for individuals like executive officers who are furnished a company car but don't own a personal vehicle and need coverage for driving non-owned cars. The CA 99 17 is generally preferred for sole proprietors over the CA 99 10 because it's often free and provides broader family coverage.
- Confirming Entity Type: Ensure the named insured is truly an individual (sole proprietor). If the business is a corporation or LLC, this endorsement may not be appropriate unless specific underwriting guidelines are met regarding listing individuals as named insureds.
- Coverage Gaps Still Possible: Agents should explain that while the CA 99 17 fills many gaps, it may not cover every scenario a PAP would. For example, vehicles owned by family members but not listed on the BAP are generally not covered for their use by this endorsement.
- Physical Damage for Non-Owned Autos: If an owned private passenger type auto on the BAP has physical damage coverage, this endorsement can extend that coverage to non-owned autos being used by the insured or family members, subject to limitations (e.g., a $500 limit for loss to a non-owned trailer).
For underwriters, it's important to get a complete list of all household members and their driving records when this endorsement is used, as the risk profile expands beyond just the named insured's business auto use.