Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Florida Law and EthicsEasy
A Florida 2-20 General Lines Agent is advising a client on their business auto policy. The client's business uses several vehicles for deliveries and service calls. The client expresses concern about the financial implications if one of their company vehicles is involved in an accident and needs extensive repairs, but the business cannot afford the repair costs immediately. Which coverage in the Business Auto Policy (BAP) would help mitigate this specific financial concern?
- AUninsured Motorists Coverage
- BPhysical Damage Coverage
- CMedical Payments Coverage
- DLiability Coverage
Show answer & explanationAnswer & explanation
Correct answer: B. Physical Damage Coverage
Physical Damage Coverage in a Business Auto Policy (BAP) covers damage to the insured's own vehicles, including collision and comprehensive (other than collision) perils. This directly addresses the financial concern of affording repairs.
Why the other options are wrong
- A. Uninsured Motorists Coverage covers bodily injury (and sometimes property damage) to the insured if caused by an uninsured driver, not general repair costs for the insured's vehicle.
- C. Medical Payments Coverage covers medical expenses for occupants of the insured vehicle, regardless of fault, not vehicle repair costs.
- D. Liability Coverage covers damage or injury the insured causes to others, not damage to the insured's own vehicle.
BAP Physical Damage
Physical Damage Coverage in a Business Auto Policy (BAP) pays for damage to the insured's own vehicles, including collision and comprehensive perils.
- Covers the insured's own vehicles.
- Includes Collision (impact with another object or upset).
- Includes Comprehensive (other than collision, e.g., fire, theft, vandalism).
Memory trick: BAP: Liability, Med, Uninsured, Physical