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3. CA-DS-03

Form CA DS 03 - Business Auto Declarations

The CA DS 03 - Business Auto Declarations is a standard Insurance Services Office (ISO) form that serves as the "cover page" or "summary page" for a Business Auto Coverage Form (typically the CA 00 01). It personalizes the otherwise generic policy language of the CA 00 01 by detailing the specific agreements between the insurer and the named insured. This form is crucial as it outlines who and what is insured, the types and limits of coverage, applicable deductibles, the policy period, and the total premium. Essentially, the declarations page makes the policy unique to the insured.

Classes of Business It Applies To

The CA DS 03 is utilized across a wide array of commercial enterprises that own, lease, hire, or use vehicles in their operations. It's not limited to specific industries but rather applies to any business with an auto exposure. Real-world examples include:

• Contractors (Plumbers, Electricians, Construction): Businesses whose employees drive company-owned vans or trucks to job sites.
• Delivery Services (Florists, Restaurants, Local Couriers): Companies that use vehicles to transport goods to customers.
• Sales Organizations: Businesses with sales representatives who use company cars to visit clients.
• Service Businesses (Landscapers, Cleaning Services): Companies whose operations rely on vehicles to transport equipment and personnel.
• Farms and Agricultural Businesses: Operations using trucks and other vehicles for farm-related activities, though specialized endorsements or forms might also apply.
• Non-Profit Organizations and Social Service Agencies: These entities often have vehicle exposures from transporting clients or for operational purposes.
• Companies with Hired or Non-Owned Auto Exposure: Businesses that may occasionally rent vehicles or have employees use their personal vehicles for company business.

The form is designed to accommodate various types of business structures, including individuals (sole proprietors), partnerships, corporations, and limited liability companies. The form of business is important as it helps determine who qualifies as an "insured" under the policy.

Special Considerations

Several important points must be considered when using the CA DS 03:

• Accuracy is Paramount: Information on the declarations page, such as named insured, mailing address, policy period, and vehicle details (VIN, make, model, year, garaging location), must be precise. Errors can lead to coverage disputes, incorrect premium calculations, or even policy voidance in cases of misrepresentation (e.g., intentionally misstating garaging location).
• Covered Auto Symbols are Key: Item Two of the declarations page specifies the "Covered Auto Symbols" that designate which types of autos are insured for each coverage. These symbols (ranging from 1 to 9, and sometimes a manuscript symbol 10) are defined in the Business Auto Coverage Form (CA 00 01) and are critical in determining the scope of coverage. For example, Symbol 1 ("Any Auto") provides the broadest coverage, while Symbol 7 ("Specifically Described Autos") limits coverage only to vehicles listed in the declarations.
• Premium and Coverage Activation: A premium charge must be shown next to a coverage in Item Two for that coverage to apply. Simply listing a limit or deductible is insufficient if no premium is indicated.
• Hired and Non-Owned Autos: If coverage for hired or non-owned autos is intended (often using Symbols 1, 8, or 9), the declarations page may require completion of specific schedules detailing the exposure, such as the cost of hire or the number of employees.
• Endorsements: All endorsements attached to the policy at inception should be listed on the declarations page. This provides a complete picture of the policy terms.
• Policy Period and Time Zones: The policy period commences at 12:01 AM standard time at the named insured's mailing address. This can be crucial for claims occurring in different time zones. For instance, if a company's mailing address is in California, an accident at 1:00 AM on the policy expiration date in New York might still be covered if it's before 12:01 AM in California.
• Relationship to CA 00 01: The CA DS 03 is intrinsically linked to the CA 00 01 (Business Auto Coverage Form). The declarations activate and modify the provisions of the coverage form.

Key Information for Agents and Underwriters

Agents and underwriters should pay close attention to the following when working with the CA DS 03:

• Risk Assessment: The information on the declarations, particularly the schedule of covered autos (if Symbol 7 is used), garaging locations, radius of operations, and business use, is fundamental for assessing the risk profile of the insured. Underwriters use this to determine acceptability and appropriate pricing.
• Pricing and Rating: Details like vehicle type, cost new, usage (e.g., service, retail, commercial), and garaging territory directly impact the premium calculation. For hired auto liability, the "cost of hire" is a key rating basis.
• Coverage Gaps: Agents must carefully review the selected covered auto symbols and compare them against the insured's actual exposures to identify potential coverage gaps. For example, if a business frequently rents vehicles but only Symbol 7 (Specifically Described Autos) is shown for liability, a significant gap exists. It's crucial to ensure the symbols accurately reflect the insured's operations.
• Underwriting Guidelines: Insurers have specific underwriting guidelines related to vehicle types, driver experience, loss history, and business operations. The CA DS 03 provides the initial data points for evaluating an account against these guidelines.
• Loss Payees and Additional Insureds: The declarations will identify any loss payees for physical damage coverage (e.g., a lienholder on a financed vehicle). While additional insureds are typically added via endorsement, the need for such endorsements often arises from information gathered for the declarations.
• Audit Potential: Some policies are subject to audit (e.g., based on cost of hire or number of employees for non-owned auto liability). The declarations will indicate if an audit period applies.
• State-Specific Requirements: While the CA DS 03 is a standard form, state-specific endorsements or variations may apply, particularly concerning coverages like Uninsured/Underinsured Motorists or Personal Injury Protection (PIP). Underwriters must ensure compliance with applicable state laws and regulations.

The CA DS 03 is a foundational document in commercial auto insurance. Its accuracy and proper completion are vital for ensuring the insured has the intended coverage and that the insurer has correctly assessed and priced the risk.