BAP Coverage for Trailers

A Kentucky subscriber recently asked the following question:

The insured has a personal auto policy but does not list on it a couple of trailers he owns. We believe that liability would extend to those trailers when he pulls them behind a vehicle listed on his personal auto policy. But what about when he pulls the trailers behind a vehicle covered on a business auto policy that is in his corporation's name?

I do not think liability would extend off the business auto policy to those trailers, but would they still be provided liability coverage by his personal auto policy even when being pulled by a vehicle listed on the business auto policy?

ANSWER: The PAP will provide liability coverage because the definition of "your covered auto" includes any trailer that the named insured owns. There is no stipulation that the owned trailer has to be towed by a covered auto, so long as the named insured owns the trailer, there is liability coverage even if the trailer is towed by a BAP auto.

As for the BAP itself, the named insured has liability coverage for any covered auto, and covered autos include trailers not owned by the named insured while attached to power units that the named insured does own. Of course, a lot depends on what covered auto designation symbol the named insured uses on the BAP so you would have to check that. If the BAP does have the proper symbol and there is an accident, the BAP provides primary coverage while the trailer is connected to a covered auto owned by the named insured. Read More

Floor Plan Coverage Form

The Floor Plan Coverage Form, CM 00 52 01 13, one of the forms of the commercial inland marine program of Insurance Services Office (ISO), affords open perils coverage on merchandise held for sale that has been financed through a lending institution. Read More