The Bakery Employee, the Personal Honda, and the Cyclist
Sweet Harbor Bakery operates three owned delivery vans and a retail store. Its business auto policy is written with Symbol 9 (non-owned autos) and Symbol 8 (hired autos), but not Symbol 1. Limits are $1,000,000 combined single limit. The bakery regularly asks its retail employees to use their personal cars to make rush deliveries within 25 miles; it reimburses mileage but does not verify personal auto insurance. It also occasionally hires QuickRun Couriers, an independent delivery service, when volume spikes. In November, employee Dana uses her personal Honda to deliver a wedding cake. While texting a customer for directions, she rear-ends a cyclist, who suffers a spinal injury. Dana's personal auto policy has a $100,000/$300,000 limit and a $500 deductible. The cyclist's damages are estimated at $450,000. QuickRun was not involved.
1. Does Sweet Harbor's business auto policy respond to the cyclist's claim? Under which symbol, and in what position?
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Yes, the policy can respond because it includes Symbol 9, non-owned autos. Symbol 9 covers the named insured's liability arising out of the use of a non-owned auto in the business. Dana's Honda is a non-owned auto. But the BAP's other-insurance condition makes coverage for a non-owned auto excess over any other collectible insurance. Dana's personal auto policy is primary up to its $100,000/$300,000 limits. The cyclist's $450,000 damages exceed Dana's per-person limit, so the BAP likely pays the gap above the personal policy's limit, up to the $1,000,000 CSL. The BAP does not become primary simply because the bakery is a business.
2. Who is an insured for this loss, and how do the personal policy and the BAP share the claim?
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Dana is an insured under her personal auto policy. Under the BAP, the named insured is an insured, and employees using a covered non-owned auto in the business may also qualify as insureds. Sweet Harbor itself is potentially vicariously liable for Dana's negligence. The personal policy pays first for Dana. The BAP then responds as excess over any other collectible insurance. If Dana had no personal insurance, the BAP's excess position could effectively become primary, but the BAP would still not pay until other collectible insurance is exhausted. The bakery should also consider whether its own liability is separate from Dana's and whether the BAP defends the bakery.
3. How would the analysis change if Dana had been driving a van hired from QuickRun Couriers?
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If Dana had been driving a hired van from QuickRun, Symbol 8 (hired autos) would apply rather than Symbol 9. The BAP would cover Sweet Harbor's liability for the hired auto, but the other-insurance condition still makes the BAP excess over any other collectible insurance, including QuickRun's policy. The priority would depend on the rental contract and any endorsements. The key distinction is that owned autos receive primary BAP coverage, while hired and non-owned autos are treated as excess. The agent should confirm that the BAP symbols match the bakery's actual exposure, because Symbol 7 (specifically described autos) would leave both the personal-car and hired-car exposures uninsured.