Business Auto Legal Liability
The insuring agreement is the heart
of the insurance contract between the insurer and the
policyholder. There are three parts to the liability
insuring agreement. The first part is the insurer's
commitment to pay "all sums an insured legally must pay
as damages because of 'bodily injury' or 'property
damage' to which the insurance applies, caused by an
'accident' and resulting from the ownership, maintenance
or use of a covered auto:
The insuring agreement states the
insurer will pay damages because of bodily injury or
property damage "to which this insurance applies."
Essentially, this statement tells you that you have
coverage but it is not open-ended. There may be
instances where there would be no coverage, so you need
to make yourself aware of policy exclusions.
A policyholder should also refer to
the definitions section in the policy to more fully
understand coverage. For example, you see in the first
paragraph of this article that certain words are
highlighted with quotation marks. When you find this, or
words in bold print in the insurance policy, it means
that those particular words are found in
the definition section. The word "accident" as defined
in the business auto policy includes "continuous or
repeated exposure to the same conditions resulting in
bodily injury or property damage." There is also a
requirement that the accident be unexpected and
unplanned.
The second part of the insuring agreement declares the
insurer will pay all sums an insured must legally pay as
a covered pollution cost or expense, Basically, there is
limited coverage should pollutants escape as the result
of bodily injury or property damage.
The third part of the insuring agreement deals with the
insurer's responsibility to defend the insured against a
suit seeking damages. The insurer has the right to
investigate and settle any claim or lawsuit, as it
considers appropriate. The duty to defend ends when the
limit of insurance has been exhausted by payment of
judgments or settlements.
The business auto policy is a complex, legal document,
so be sure to cal l your agent if you have any questions
.
