Property and Casualty Insurance · Casualty Insurance · 6 min read
Business Autos and Dealer Operations
- Differentiate between personal and commercial auto policies, including the selection and meaning of standard commercial auto symbols.
- Explain the coverages, endorsements, and liability options available under the Auto Dealers Coverage Form, including garagekeepers coverage.
- Distinguish between commercial autos and mobile equipment to determine whether auto liability or Commercial General Liability coverage applies.
Commercial Auto Basics and Numerical Symbols
The Personal Auto Policy is designed primarily for individuals and families owning personal vehicles rather than business entities. A standard Personal Auto Policy generally excludes liability while a vehicle is used to carry people or property for a fee, although it makes an exception for a share-the-expense car pool. When a commercial entity owns or operates vehicles, it requires dedicated commercial protection. The Business Auto Coverage Form insures eligible autos used by a business, subject to the covered-auto symbols and coverages selected on the policy.
Business auto liability coverage pays covered bodily injury or property damage for which an insured is legally responsible because of an accident involving a covered auto, subject to policy limits and exclusions. State financial responsibility and compulsory insurance laws set applicable auto liability requirements, and these required limits and rules vary by state and type of operation. When a covered auto is driven outside the state where it is licensed, the Business Auto Coverage Form can increase liability limits to meet that jurisdiction's compulsory insurance or financial responsibility minimums. However, this coverage extension does not increase limits required by laws governing motor carriers of passengers or property.
Commercial auto forms use numerical symbols on the declarations page to designate which autos qualify for covered auto status. Each symbol defines a specific category of vehicle, allowing the policyholder to tailor coverage for liability, comprehensive, collision, and other coverages. Selecting the right symbol helps designate the intended autos for each coverage; the policy's other terms determine whether a particular loss is covered.
For liability coverage, Symbol 1 designates any auto, the broadest covered-auto category, but the policy's insured provisions, exclusions and limits still apply. Symbol 7 generally covers autos specifically described in the declarations, but the Business Auto Coverage Form can also provide limited coverage for qualifying newly acquired or temporary substitute autos. Symbol 9 can provide the business with liability coverage for employee-owned autos used in its business; it does not, by itself, make the employee an insured for liability while driving their own car.
| Symbol | Description | Coverage Scope |
|---|---|---|
| Symbol 1 | Any Auto | Provides liability coverage for any auto; offers the broadest liability protection. |
| Symbol 7 | Specifically Described Autos | Generally covers specifically described autos, subject to the form's provisions for qualifying newly acquired and temporary substitute autos. |
| Symbol 8 | Hired Autos Only | Designates autos the named insured leases, hires, rents, or borrows; generally excludes autos obtained from employees, partners, members, or their households. |
| Symbol 9 | Non-Owned Autos Only | Applies to non-owned autos used in the insured's business, such as employee-owned vehicles. |
Common mistakes
- Assuming Symbol 8 covers employee-owned vehicles used for business errands. Symbol 8 applies to hired, leased, or rented vehicles but generally excludes vehicles borrowed or rented from employees. A business can cover its liability arising from employee-owned vehicles used in its business under Symbol 9 or the broader Symbol 1; coverage for the employee as a driver is a separate issue.
- Believing standard garagekeepers legal liability pays for any damage to a customer car. Garagekeepers legal liability coverage pays when the business is legally liable for covered damage to a customer's auto; negligence is a common example, not the only possible basis of liability. Direct primary or direct excess garagekeepers coverage can pay for covered damage without fault, but direct excess generally applies after other collectible insurance when the business is not legally liable.
- Confusing mobile equipment with commercial autos. Equipment on crawler treads or designed primarily for off-road use generally qualifies as mobile equipment, and its operational liability generally falls under Commercial General Liability; check the policy terms and whether applicable compulsory or financial responsibility law makes the vehicle an auto.
- Expecting standard dealer physical damage to cover a vehicle driven away during a test drive by someone using a fake identity. Theft by trickery requires a false pretense endorsement to be covered.
Key points
- The Personal Auto Policy covers individuals and families, while the Business Auto Coverage Form uses numerical symbols (such as Symbol 1 for any auto and Symbol 7 for specifically described autos) to establish covered auto status.
- Symbol 8 designates autos the business hires, leases, rents or borrows, generally excluding autos obtained from employees; the business can designate employee-owned autos used in its business for liability coverage with Symbol 9 or the broader Symbol 1.
- The Auto Dealers Coverage Form replaced the Garage Coverage Form, combining dealer liability, non-auto liability, and optional garagekeepers and physical damage coverages.
- Garagekeepers coverage protects customer vehicles in the insured's care, custody, or control and can be written on a legal liability, direct primary, or direct excess basis.
- Dealer physical damage excludes losses from trick or scheme unless a false pretense endorsement is added to the policy.
- The Drive Other Car endorsement protects corporate individuals who do not own personal cars, while the Individual Named Insured endorsement adapts commercial auto coverage for sole proprietors and their families.
- Mobile equipment, such as bulldozers and vehicles on crawler treads, is distinguished from autos under the standard policy definitions; a vehicle maintained for use solely on or next to premises the insured owns or rents is also mobile equipment unless it is subject to a compulsory or financial responsibility law, and operational liability for mobile equipment generally falls under Commercial General Liability.
Practice this section
Explained Casualty Insurance questions, no account needed. Casualty Insurance practice test
The full lesson continues with 4 more sections with exam tips, audio in English and Spanish, 5 Check yourself questions and 20 flashcards.
- 1 month
$53.99$26.99 - 3 months
$158.99$79.49 - Lifetime
$323.99$161.99
One payment, no subscription.
See Property and Casualty plansAlready a member? Log in
Sample lesson: Risk and Ways to Manage It25 practice questions on this exam
Each Property and Casualty practice test has 25 original questions with the answers explained. No account needed.
Open the Property and Casualty practice testsOriginal lesson written for Property and Casualty Insurance practice · updated October 29, 2026. Exam names are trademarks of their owners; tests.global is not affiliated with them.