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5 Facts About Business Auto Coverage

Many businesses utilize either one company vehicle or a fleet of them for their daily operations. However, many small business owners and employees blur the lines between commercial use and personal use, which can be troubling for insurance coverage.  As many exclusions apply to commercial use of a personal vehicle, it’s important to obey these regulations to prevent a denied claim.  As we explore the need-to-know facts about business auto coverage, ensure your business is equipped with a comprehensive Commercial Auto Insurance policy.

Know the symbols

For example, a small, local dry cleaner may have two or three vehicles that are used for pick-ups and deliveries to clients.  That business owner is more likely to have some business auto coverage, but is it the right coverage for the vehicles themselves or the drivers, asks Property Casualty 360.  Unless the employee is specifically included on the policy, there could be discrepancies.  Know the symbols:

Symbol 1 – When the policy has a Symbol 1, the small business owner will have coverage for any auto owned, hired, borrowed or used by the insured. Symbol 1 encompasses all the other coverage symbols, explains the article.

Symbol 2 – This means the named people on the policy are covered by no-fault coverage in the state where required or where vehicles are mostly garaged.

Symbol 8 – This covers automobiles that the named owner leases, hires or borrows.

Liability coverage

This explains who is covered under what provisions and coverage limits.  It’s important for small business owners to understand who the policy applies to, including other employees as well as themselves.

Physical damage

Section III of the business auto coverage form consists of the coverage agreements and coverage extensions, exclusions, limits of insurance information and a deductible provision.  The coverage agreements list the various ways in which a covered auto can suffer physical damage and lists the kinds of losses the carrier will pay for.  To activate coverage, however, a covered auto designation symbol must be placed in item two of the declarations form, explains the article.


Loss conditions and general conditions apply to business auto insurance policies.  The loss conditions are appraisal for physical loss or damage, duties in the event of loss, litigation against the named insured, transfer of right of recovery and loss payments.  The general conditions are fraud, bankruptcy, premium audit, liberalization, two or more coverage forms, or other insurance.

Basic policy definitions

Sorting through the verbiage of your policy can be confusing, which is why we have outlined a few basic ones to know.

Auto:   This doesn’t only include a car, but also extends to mopeds, trucks, vans, RV’s, trailers, and any other vehicle that was intended for travel on public roads.

Employee:  This doesn’t only mean full-time employees.  Instead, leased employees are covered, as well, but not temporary workers.

Suit:  A “suit” is a civil proceeding in which damages, because of bodily injury or property damage to which the policy applies, are alleged.  The term also includes an arbitration proceeding or any other alternative dispute resolution proceeding, explains Property Casualty 360.

About Irving Weber Associates

These are five critical facts that every business owner should be aware of.  At Irving Weber Associates, Inc. (IWA), we offer the FabriCare Advantage insurance program, which includes Dry Cleaner Insurance, Dry Cleaner Equipment Breakdown coverage, and more.  In addition, we offer specialty business insurance products to fully secure your operation.  Please contact us today for more information at (855) 764-7406.