Under BAP, coverage for autos hired or borrowed is considered which type of exposure?

Under BAP, coverage for autos hired or borrowed is considered which type of exposure?

• A. Liability auto exposure
• B. Physical damage exposure
• C. Both liability and physical damage exposures
• D. Not an exposure at all

Answer: (A)

In a Business Auto Policy, when you hire or borrow autos for business use, the primary risk the policy covers is the liability exposure. If a hired vehicle you’re operating injures someone or damages their property, the liability portion of the BAP responds to those third-party claims. Physical damage to the hired vehicle itself isn’t automatically covered under a standard BAP; that protection would require a separate endorsement (often called Hired Auto Physical Damage) to insure damage to the vehicle you’ve rented or borrowed. So, the exposure most associated with autos that are hired or borrowed is liability exposure.

In a Business Auto Policy, when you hire or borrow autos for business use, the primary risk the policy covers is the liability exposure. If a hired vehicle you’re operating injures someone or damages their property, the liability portion of the BAP responds to those third-party claims. Physical damage to the hired vehicle itself isn’t automatically covered under a standard BAP; that protection would require a separate endorsement (often called Hired Auto Physical Damage) to insure damage to the vehicle you’ve rented or borrowed. So, the exposure most associated with autos that are hired or borrowed is liability exposure.