Question

Jack's Body Shop & Repair Service owns two tow trucks, one with a standard tow package and one with a lift bed for cars that can't be towed. Jack's personal vehicle is also owned by the company. Jack has purchased a Business Auto Garagekeepers Policy with the following:

- Symbol #1 is listed next to "Liability" coverage.
- Symbol #7 is listed next to "Physical Damage: Collision" coverage. Jack's personal vehicle - a 2004 Ford Expedition - is the only vehicle listed.
- Symbol #1 is listed next to "Garagekeepers".

While enroute in the company tow truck to an accident to pick up a wrecked car, Jack's employee/driver, Mel, is talking on his cell phone getting directions to the pickup location and swerves over into the adjacent lane and sideswipes another vehicle. He quickly stops, gives the other driver his name, the name and phone number of the company and his insurance information, and then proceeds on to the pickup. The 3rd party claim is later assigned to you for handling. Is there coverage for this claim?

(A) No. Since Mel was at fault in the accident, the policy doesn't cover the damage.
(B) Yes. Liability coverage is provided for "Any Auto", which includes Jack's tow trucks.
(C) No. Your analysis of coverage indicates the tow truck was not listed under the "Physical Damage: Collision" section.
(D) No. Mel left the scene of the accident, voiding coverage.

Answer 1

Under Jack's Business Auto Garagekeepers Policy, there is coverage for the third-party claim because symbol #1 for Liability coverage implies "Any Auto" which usually includes all business vehicles. Mel's actions don't automatically void this liability coverage.

Step-by-step explanation:

When Jack's employee Mel, driving the company tow truck, was involved in an accident, an analysis of the Business Auto Garagekeepers Policy would be necessary to determine if there is coverage for the third-party claim.

The Liability coverage mentioned in the policy is symbolized by #1, which generally signifies "Any Auto." This broad coverage typically includes all vehicles owned, leased, hired, or borrowed by the business, making Mel's driving on company time covered.

Despite the fact Mel was using his cell phone and left the scene after providing the necessary information, these actions do not automatically void the coverage for the incident.

Therefore, the garagekeepers liability should apply, indicating there is indeed insurance coverage for the damages caused to the other vehicle involved in the accident.