PILOT CAR PROGRAM INSURANCE DEFINITIONS

 

On a daily basis, we receive questions regarding the proper types of insurance for a Pilot/Escort Driver/Company operation and as such, prompted this article. 

 

So – here we go!

Does my business really need a Commercial Auto Coverage if it Uses Vehicles in the operation of the business?

 

Many small-business owners believe that if their car is in their personal name then commercial coverage is not necessary and their personal auto policy will cover the auto. This is not true. It is common for personal auto policies to exclude business usage.

 

The potential risk of a serious auto accident wiping out a small business far exceeds the premiums paid for this type of coverage;this is not the place to save premiums.

Why should I purchase commercial auto insurance?
 

Personal auto insurance policies exclude coverage if a vehicle is used for business. A commercial auto policy provides coverage for autos owned by a business if these vehicles are in an accident. The insurance pays to repair or replace the vehicle and the vehicle of the third party damaged by the employee. It also pays for the medical expenses of those injured in an accident.

ANSWER:

 

As a self-employed independent contractor you are improperly insured if you insure your vehicle with a Personal Auto Policy. If your insurance broker or insurance carrier discovered that you are using your vehicle for business purposes two things may happen;

1. They might cancel your current policy immediately due to the fact that you did not disclose this information on your application (accusing you of fraud) or 2. They could deny a claim if you were in an accident while contracting under a personal auto policy, leaving you and your vehicle, unprotected and therefore being vulnerable to legal action and financial loss.

 

What is a Declaration?

 

The section of an insurance contract which shows who is insured, what property or risk is covered, when and where coverage is effective and how much coverage applies is referred as a declaration page or dec page.

What is Combined Single Limit coverage?

 

Bodily Injury (per person and accident) and Property Damage are combined in one single amount of coverage.

 

What is an Additional Insured (AI)?

 

A person or an organization, other than the named insured or covered person, who is protected under the named insured's auto policy, is called an additional insured. If an auto is leased, the leasing company may want to be listed as an Additional Insured as well as a lien holder or loss payee. This is important to the AI due to the fact they could be named in a lawsuit. As an AI your policy would pay to defend them as a result of your negligence to perform a duty instead of them having to pay an attorney to defend a lawsuit.

 

Not only does this protect an AI if named in a lawsuit for an accident caused by a policyholder but, also gives them notification of any policy changes or cancelation.

What is a Certificate of Insurance?

 

A Certificate is a document that provides proof of coverage, showing the type of insurance provided, limits of liability, dates of coverage, and the name of the Insurance carrier providing coverage.  In other words a printed certificate that states the essential provisions of your coverage, often required by customers who want proof you have insurance. Typically, a Certificate is all that’s required by any State agencies.
 

 

What is “Errors & Omissions” Insurance?

 

Errors & omissions insurance provide coverage for people who give advice, make educated recommendations, design solutions or represent the needs of others. "E&O" is also referred to as professional liability or malpractice insurance. This type of liability insurance would cover you and/or your employees in the event someone claims you incorrectly performed or failed to perform your professional duties.

Will my Auto or General Liability Insurance Policy cover the work operation of a Tillerman (Steerable Trailer)?

 

This issue has been discussed with many insurance companies and they all have said that they will not provide coverage for you acting as a “Tillerman”and will not consider providing coverage for you operating as a “Tillerman”because you as a Pilot/Escort do not own the vehicle nor do you have any control over any maintenance;also, you do not have the ability stop or start the vehicle so the liability and risk is too great. It is also illegal to act as a Tillerman and Pilot car on a load. 

What is Commercial coverage?

 

Commercial or Business coverage could be referring to many types of policies some of which are:  Commercial Auto coverage, General Liability, Professional Liability, Inland Marine (equipment floater), and property coverage. The key is speaking to a licensed Insurance professional to help you understand which type(s) of coverage are needed and why. All types of coverage are important but may or may not be needed depending on your business operations and owned property.

 

Commercial Auto 

 

This coverage provides insurance for bodily injury to someone that you might hit, and property damage to a vehicle or bridge or wall that you might hit with your vehicle. It does not provide coverage for the pilot car business operation. General liability and professional liability would provide coverage for that exposure. Commercial auto coverage, liability coverage covering the other vehicle you might hit would be the minimum you should purchase, usual limits are $1,000,000.

 

General Liability

 

Insurance protects an Insured in the event they or an employee causes bodily injury and/or property damage to others. General liability insurance for Pilot car operators is considered a higher risk policy than most which makes it more challenging to find. Dec pages may or may not specify all the business operations covered as Insurance companies have stated it would be too potentially “Litigious” to change all the wording for a certain classification of business as GL policy forms are generally applicable to many different classes of businesses. It is important to disclose all business operations when applying for GL coverage to assure proper protection. This is the only way a licensed insurance agent can help protect you. They cannot protect you if they don’t know what they are protecting you for. Keep in mind some General Liability policies may only cover your office exposure but not while flagging, doing height pole work, shunting, or doing route surveys. It’s important to ask exactly what am I covered for and  what exclusions are in my policy.

 

Professional Liability

Protects an individual who offers services to the general public claiming expertise in a particular area greater than the ordinary layman. Today, law suits are brought alleging a professional such as a physician, attorney, or CPA, or pilot or escort car operator has committed negligent acts or omissions in performing the purchased service.