PAP Exclusions

January 11, 2016

We have an insured with a PP 00 01 personal auto policy who rented his 99 Dodge Ram truck to a construction company to use while the company's vehicle was inoperable. We have confirmed that money exchanged hands during this transaction. We do not think there would be coverage for this type of exposure under our liability policy based on exclusions 5 and 7 in the PAP.

What is your opinion?

Illinois Subscriber

Exclusion 7, maintaining or using a vehicle while the insured is employed or otherwise engaged in any business not described in exclusion 6, may be applicable to this situation. The liability coverage is not there for “that insured” using the vehicle in a business such as this unless the Ram truck is considered to be a pickup. In that case, the exclusion does not apply.

Exclusion 5, the public or livery exclusion, may be applicable based on the use of the vehicle. If the truck is being used to deliver items to customers or a construction site, that can be seen as a livery conveyance since it is being used to deliver legal possession of property. However, if the truck is just being used by the foreman or a worker to get to the place of business, that is not a public or livery conveyance, and the exclusion does not apply.

So, the bottom line is that you have to check on the circumstances of this transaction.