Coverage Territory under the BAP

September 26, 2011

I have an insured that that will transport a vehicle from Puerto Rico to the mainland United States . The business auto policy states that it will cover losses or accidents involving a covered auto while being transported between the USA, Puerto Rico, or Canada . The insured insists that the policy grants auto coverage while it is being transported by sea. We believe that this is a marine exposure and should be covered by cargo insurance. The statement, “being transported between any of these places” does not specify that has to be terrain transportation. Could you please clarify this matter? Thank you.

Florida Subscriber

The fact that the policy does not restrict or further clarify the phrase “while being transported between any of these places” means that it makes no difference if the transporting is by land, sea, or air. The insured is correct in his interpretation of the phrase. And if the vehicle being transported is a vehicle owned by the named insured, the coverage under the BAP is primary.