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Your insured hires an independent contractor to snowplow his lot. If your insured is sued, under his BAP should he have at least Symbol 8, or 9 coverage? In other words, is this a hired or nonowned auto exposure? Or does he need a BAP at all for this claim? Could his CGL policy suffice?

With regard to Hired Car and Non-Owned coverage, which of the two coverages would apply to a commercial insured who hires someone to snowplow his lot? This company has hired an independent contractor that snow plows property in the winter months. Agency staff is having a discussion as to whether it would be the Hired Car coverage or the Non-Owned Auto coverage that would come into play in the event of a claim for bodily injury to a pedestrian that is hit while the property is being plowed.”

Below are some observations from the Virtual University faculty. The presumption is that your insured has a CGL and a BAP policy. As you can see, Symbol 1 is preferred for BAP coverage, though Symbols 8 and/or 9 might be necessary depending on the carrier. However, while a BAP is probably justified for other exposures, is it needed here? ---------Sounds like a non-owned auto exposure to me (only those autos you do not own, lease, hire, rent or borrow that are used in connection with your business). Your insured is hiring an independent contractor to do a job. I don’t think that would constitute “hiring” an auto. ---------In my view, it’s non-owned. But, why not solve the whole issue (and more) by requesting both symbols 8 and 9, or symbol 1. ---------The person who hires someone (an independent contractor) to do snowplowing on his property would be covered under his or her CGL policy. The coverage applies because the automobile exclusion does not. Note it only applies to BI or PD arising out of the ownership, maintenance or use or entrustment to others of any auto owned, operated by, rented or loaned to any insured. None of these applies to an independent contractor. The named insured owner of the property to be plowed would therefore have coverage under the CGL.

As a matter of risk management, the proper owner should require the other person to maintain auto liability coverage under which he is an additional insured. ----------

If your property owner is sued, the nonowned auto coverage would defend and pay any damages for your insured and subrogate against the snow plowing firm. But your insured could also get defense and coverage from the snow plowing firm’s Business Auto Policy (assuming they have one). The Who Is An Insured part of the Liability section names anyone vicariously liable for an insured as an insured. Get a copy of the snow plower’s policy and look over the coverage. ----------

If your insured has an ISO CGL policy and the party being hired is an independent contractor, as opposed to an employee/ CGL insured, then the CGL policy should respond. This is what the CGL “auto” exclusion says: “Bodily injury” or “property damage” arising out of the ownership, maintenance, use or entrustment to others of any aircraft, “auto” or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and “loading or unloading”.

The contractor’s vehicle is not “owned or operated by” the insured, nor is it “rented or loaned to” the insured. The contractor is simply performing a service for the insured that involves a vehicle and the exclusion when read literally does not apply to this scenario as long as the other party is not an insured under the CGL.

Not that BAP coverage isn’t a good idea. For nonowned exposures, Symbol 1 is preferred; otherwise both Symbols 8 and 9. It is the rare business that doesn’t have an employee use their own vehicle for business on occasion…Symbol 9 is a must and, to be fair, I’d add the Employees As Insureds (CA 99 33 02 99) endorsement to extend liability coverage to the employee himself or herself.

I’m working on establishing a standard office procedure for our office when dealing w/ divorce and personal auto policies. I’ve done some reading on the procedures when the ex-spouse is not a named insured and my specific questions are tailored towards when the ex-spouse IS the 2nd named insured and is non-responsive to our office.

Our office has the stance that we like to speak with both parties anytime there is a separation or divorce; however, we will occasionally run into the situation where we don’t have good contact info on the ex or they are non-responsive to any contact we make. At what point are we able to remove the other party? If the first named insured sends in a copy of the formal divorce decree, are we able to then proceed with removing the other party?

In addition to the good things you are doing, in the case of a nonresponsive ex-spouse, you need to be sure to do four others:

1. Document the titles, usage, and locations of all cars on current policies and deal with that information appropriately 2. Send a postal letter and email to the last known address of the nonresponsive person, explaining exactly what changes are being made to the policy and strongly suggest he or she get in touch with you. 3. Maintain cell numbers for ALL members of households so you can reach out that way; and if course document that attempt and if contact is made, do as appropriate and document. 4. Determine and document all potential and previously listed drivers and add as appropriate.

If property coverage is also in place, that is another whole set of issues.

When I teach personal lines classes, I facetiously advise not letting your insured’s get divorced because it causes a LOT more work and exposure for you.

BTW: Commercial “breakups” have their own issues and needs for an agency to address. ---------It’s rarely safe to remove a policyholder without their consent - ideally in writing. If a former or separated spouse isn’t willing to sign a policy release, then it’s best to let the current policy lapse and issue a new policy for the spouse who wants to continue their coverage. Even then it’s a good idea to advise the former or separated spouse of the cancelation by sending notice to them at a new address. The person wanting to continue coverage could even authorize their removal from the current policy and its transfer to the other party.

There are several companies now that have introduced provisions in their policies that authorize any named insured, or in one case the first named insured, to make changes to the policy including removing the other policyholder. In those cases where there is contract a provision like that, removal of one insured by another may be appropriate. Even so, it’s a good idea to notify the affected party whenever possible. ---------This is a touchy situation and a possible E&O exposure. You cannot remove a named insured without their permission. You could remove the other ex-spouse and write a new policy. However, there might be a problem if the remaining spouse does not receive a premium notice and the policy lapses. I would try to get an address of the ex-spouse and send a letter that he or she should obtain separate coverage, either through you or another agent. ---------I would let the insurer make the decision since only they and the insureds are parties to the contract. The first question is, what’s the hurry to remove the other party? Is one of the parties requesting that? If so, have that person get the other party to respond and comply.

What can or can’t be done is governed by the insurance contract’s provision for who is authorized to make changes. It may also be governed by how the parties are shown on the declarations, for example, John AND Joan Doe or John OR Joan Doe.

The bottom line is that I would not do anything to reduce or eliminate coverage for a named insured without express written permission. ---------It isn’t a simple question because of the legal implications. In most cases, you’ll want to be on record recommending that your client discuss this with his or her attorney. The important thing for fact finding is to inquire about the ownership of all property (houses, cars, RVs, investment property, etc.) and the occupants or users of these properties. If those steps are done carefully, you’ll know if there’s another party who needs to be addressed. If there is one, whether it be an ex-spouse, a trustee, lessee, etc., the situation should be referred to a senior member of your team to be sure all of the exposures are handled correctly. There are too many potential problems to deal with in this short-answer forum, or in your checklist for that matter.