Commercial and Personal Auto Insurance
Commercial Auto Insurance is a complex maze of coverage options, limitations and exclusions which, if inadequately written, could spell disaster to a company in the event of a serious accident. The placing agent must have knowledge of the various commercial fleet auto underwriting criteria when designing an effective auto liability insurance plan. He must also understand the nature of a customer’s business to determine if special cargo, equipment or hazardous materials endorsements should be written. Lack of this knowledge will inevitably lead to coverage disappointments. In addition, if the agent offers advice to his customer, he should be ready to suggest ways the customer can reduce his exposure to accidents through effective risk management. Lastly, the agent is expected to obtain coverage from financially capable insurance companies with limits of protection commensurate with the risk presented. Failure of an agent in any of these areas may be a breach of his duty, absent mitigating evidence.
Personal Auto Insurance is more broadly written than its Commercial Auto Insurance counterpart in that fewer endorsements are needed to enhance coverage for the most common uses of personally owned automobiles. HOWEVER, personal auto policies, written by agents who breach the Standard of Care when assuming an advisory role with their clients, can be severely lacking in needed protection at the time of a loss. And those agents who breach their duty should expect an E&O claim. Areas where agents are vulnerable include:
- Failure to properly name all Insurable Interests, including owners, lessors, loss payees and additional insureds.
- Failure to add or eliminate vehicles as requested by the customer.
- Failure to add all coverage requested by the customer.
- Failure to suggest liability coverage limits adequate to protect against a foreseeable catastrophic claim.
- Failure to properly report a claim and properly advise the customer as to his rights and responsibilities.