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Form CA 99 33: Employees as Insureds - Commercial Auto

The CA 99 33 "Employees as Insureds" endorsement is a crucial component of a Commercial Auto policy that modifies who is considered an "insured" under the policy. Its primary function is to extend liability coverage to employees while they are using their own vehicles for the named insured's business or personal affairs. Standard Business Auto Policies (BAP) typically exclude coverage for an employee if the auto involved in an accident is owned by that employee or a member of their household. This endorsement closes that gap. It's important to note that the employee's Personal Auto Policy (PAP) remains the primary coverage in such situations, with the endorsed BAP providing excess coverage.

Classes of Business and Real-World Examples

This endorsement is valuable across a wide range of industries where employees might use their personal vehicles for company business. Examples include:

• Sales and Service Businesses: Sales representatives using their own cars to visit clients, or service technicians driving their personal vehicles to job sites. For instance, if an office manager uses their personal car for daily bank runs and post office trips on behalf of the insured, the CA 99 33 would offer them protection under the company's BAP.
• Consulting Firms: Consultants traveling to client locations in their own vehicles.
• Real Estate Agencies: Agents using their personal cars to show properties or meet clients.
• Non-Profit Organizations and Social Service Agencies: Employees or even volunteers (though a specific endorsement, CA 99 34, often better addresses volunteers) using their vehicles for organizational activities like transporting clients.
• Any Business with Occasional Errands: Even businesses that don't regularly require employees to drive for work might have situations where an employee uses their personal vehicle for a company-related task, such as picking up supplies.

Without this endorsement, if an employee causes an accident while driving their own car for work, they would rely solely on their PAP. If the damages exceed their PAP limits, the employee could be personally liable for the excess amount. The CA 99 33 allows the business's auto policy to step in as excess coverage for the employee.

Special Considerations

There are several important points to consider when evaluating the need for the CA 99 33 endorsement:

• Primary vs. Excess Coverage: It is critical to understand that the employee's PAP is always primary when they are driving their own vehicle. The CA 99 33 provides coverage on an excess basis, meaning it only applies after the employee's PAP limits are exhausted.
• Employer's Vicarious Liability: Even without this endorsement, the named insured (the employer) generally has vicarious liability coverage under their BAP (if symbols "1", "8", or "9" are used) for an employee's negligence while using their personal auto for business. The CA 99 33 specifically extends insured status to the employee.
• No Coverage for Damage to Employee's Auto: This endorsement provides liability coverage only. It does not provide physical damage coverage for the employee's vehicle.
• "Business Use" Verification: Insurers will closely examine whether the employee's personal auto was genuinely being used for the named insured's business or personal affairs at the time of the accident.
• Alternative Endorsements:
  • For situations where an employee leases their personal vehicle to the business, the CA 99 47 "Employee as Lessor" endorsement might be more appropriate as it can provide primary coverage.
  • If an employee rents a car in their own name for business purposes, the CA 20 54 "Employee Hired Autos" endorsement addresses that specific scenario, potentially providing primary coverage for the employee and physical damage coverage for the rented vehicle.
  • For partners or LLC members using their personal autos for company business, the CA 05 25 "Partners Or Members As Insureds" endorsement offers similar protection.

Key Information for Agents and Underwriters

Agents and underwriters should consider the following when dealing with the CA 99 33:

• Risk Assessment: The frequency and nature of employees using personal vehicles for business purposes are key underwriting considerations. Businesses with a large mobile sales force, for example, present a higher exposure than those where such use is infrequent.
• Employee's PAP Limits: Underwriters may inquire about the personal auto liability limits carried by employees. While the CA 99 33 provides excess coverage, significantly low PAP limits on the part of employees could lead to the BAP being triggered more often. Some employers may even establish minimum PAP limit requirements for employees who use their personal vehicles for work.
• Pricing: A premium charge is typically associated with adding this endorsement. The cost may be a factor for smaller accounts.
• Coverage Gaps: Agents should educate clients about the potential coverage gap for employees using their own cars for business if this endorsement is not in place. Explaining that an employee's PAP is primary but may be insufficient for a serious accident is crucial. The CA 99 33 provides an additional layer of protection for the employee, which can be a valuable employee benefit.
• Subrogation: By making the employee an "insured" under the BAP for this specific exposure, the insurer generally cannot subrogate against the employee if the BAP pays out under this endorsement (unless a policy provision was violated).
• Clarity of "Employee": The definition of "employee" within the BAP, which can include leased workers, is relevant when applying this endorsement.

In summary, the CA 99 33 "Employees as Insureds" endorsement is a valuable tool for protecting employees who use their personal vehicles in the course of their employer's business. It addresses a common coverage gap and provides an important layer of excess liability protection for those employees.