In the BAP, CA 00 01, coverage for hired autos (symbol 8) includes autos leased, hired, rented, or borrowed by the named insured, other than autos hired or borrowed from an employee or a partner of the named insured or a member of their respective households. Insurance coverage for hired autos is discussed elsewhere in this tab; see Insuring Hired and Borrowed Autos; Auto M.3. If the insured uses symbol 8 on his auto policy, then a hired auto is considered a covered auto under the insuring agreements (liability coverage and physical damage coverage), subject to the exclusions and conditions on the BAP that apply to covered autos. Also, the insurance provided by the BAP is excess over any other collectible insurance since the hired auto is not owned by the named insured. But note that the BAP does state that for hired auto physical damage coverage, any covered auto hired by the named insured is deemed to be a covered auto owned by the named insured; in other words, this situation makes the named insured's BAP primary insurance.

Under the common-law doctrine of respondeat superior, an employer can be held liable for the negligence of an employee acting on the employer's behalf. When an employee drives an employer's owned or hired auto, the employer's potential liability can be insured under the owned auto or hired auto coverage of the employer's BAP. But, when an employee drives his or her own auto on the employer's behalf, the employer needs to be protected under its auto policy through the use of nonownership liability coverage (symbol 9). Symbol 9 on the BAP makes those autos not owned, leased, hired, rented, or borrowed by the named insured covered autos while used in connection with the named insured's business. This includes autos owned by the named insured's employees, partners, members, or members of their respective households—but only while used in the named insured's business or for the named insured's personal affairs. As with hired autos, nonowned auto coverage is excess over any other collectible insurance.

It should be noted that the current business auto coverage form states in Section I—Covered Autos, that the following type of vehicle is a covered auto for liability coverage if such coverage is provided by the named insured's BAP: any auto that the named insured does not own while used with the permission of the owner as a temporary substitute for a covered auto owned by the named insured that is out of service because of its breakdown, repair, servicing, loss, or destruction. For example, if an auto owned by the named insured is out of service due to a breakdown, and the named insured uses an auto owned by one of his employees to deliver a package, that borrowed auto is considered a covered auto for liability coverage under the named insured's BAP.

Also note that the personal auto policy (PAP) considers an employer as an insured when the employee is using his covered auto on business purposes. The PAP states that any person or organization is an insured with respect to legal responsibility for acts or omissions of the PAP's named insured when he uses his covered auto. So, the PAP recognizes the doctrine of respondeat superior.

For a discussion of the nonownership liability coverage that can be arranged in the BAP, see Nonownership Liability Insurance; Auto M.4 pages.

Hired auto coverage and nonownership liability coverage under the BAP are primarily for the benefit of the named insured. A third type of coverage for autos not owned by the named insured differs from the other two in that it is primarily for the benefit of persons other than the BAP's named insured. Persons other than the named insured are generally insured (there are some exceptions to coverage noted on the BAP) while using a covered auto owned, hired, or borrowed by the named insured, but they have no protection under the named insured's policy for autos that they borrow or rent in their own names. For example, the newly hired CEO of the named insured company rents a car when he comes to town since he does not own a car; he rents it in his name. The standard BAP will provide coverage for the named insured company if the proper covered auto designation symbol is used, but since the named insured has not rented the car, the BAP does not provide coverage for the CEO. The endorsement providing “drive other car” coverage (CA 99 10 03 10) can be used to extend the named insured's policy to apply in this type of situation by treating the rented auto as a covered auto and by recognizing the CEO (named in the endorsement schedule) as an insured under the terms of the BAP. (Drive other car coverage under CA 99 10 is also extended to the spouse and, in some situations, to other family members of the individual named in the endorsement's schedule.)

For a discussion of this coverage, see Drive Other Car Coverages; Auto B.4 pages.