Form CA 20 15: Employees As Insureds (Please Verify Form Code)
It's important to note that the form code CA 20 15 is most commonly associated with the "Mobile Equipment" endorsement in standard ISO (Insurance Services Office) commercial auto forms. However, based on the title and summary you provided ("Employees As Insureds" which "Specifically includes employees of the named insured as insureds while using covered autos owned, hired, or borrowed by the named insured, subject to certain conditions and exclusions"), this description will focus on the functionality of an "Employees As Insureds" endorsement. A common ISO form code for an endorsement with this function is CA 99 33. Please verify the form code and title with your carrier or agency management system to ensure accuracy.
1. What the Form Is
The "Employees As Insureds" endorsement modifies the standard Business Auto Coverage Form (like the CA 00 01) to extend insured status to employees of the named insured under specific circumstances. Typically, the Business Auto Policy (BAP) provides coverage for the named insured (the business entity) for its liability arising out of the use of covered autos. It also covers permissive users of autos owned by the named insured. However, without this endorsement, an employee using their own vehicle on company business might not be considered an "insured" under the company's BAP for their personal liability, potentially leaving a coverage gap.
This endorsement aims to fill that gap by specifically including employees as "insureds" while they are using autos not owned, hired, or borrowed by the named insured (e.g., their personal vehicles) in the course of the named insured's business or personal affairs. It can also apply when employees are using autos owned, hired, or borrowed by the named insured, clarifying their status as insureds.
2. Classes of Business It Applies To
This endorsement is valuable for a wide range of businesses where employees might use their personal vehicles for company purposes or operate company-provided vehicles. Examples include:
- Sales and Service Businesses: Companies with outside sales representatives, technicians, or consultants who drive their own cars to meet clients or visit job sites. For instance, a software company whose sales team uses their personal vehicles to visit prospective clients.
- Delivery Services: Restaurants or local shops where employees occasionally use their own vehicles for small, local deliveries. Example: A local pharmacy where an employee uses their car to deliver a prescription in a pinch.
- Professional Services Firms: Accounting, legal, or engineering firms where employees might run errands, attend off-site meetings, or visit clients using their personal vehicles. For example, an architect driving their own car to a construction site meeting.
- Businesses with Company Cars: While the BAP already covers permissive users of company-owned vehicles, this endorsement can reinforce the employee's status as an insured, potentially offering them broader protection or clarifying the order of coverage between the BAP and any personal auto policy the employee may have.
- Non-Profit and Social Service Organizations: Where volunteers or employees might use their own vehicles for the organization's activities. (Though a specific endorsement like CA 99 34 might be more appropriate for volunteers).
3. Special Considerations
- Not a Substitute for Hired/Non-Owned Auto Liability: This endorsement primarily addresses the employee's liability. The named insured should still carry appropriate Hired and Non-Owned Auto Liability coverage (often selected by using Symbol 1 "Any Auto" or Symbols 8 "Hired Autos" and 9 "Non-Owned Autos" on the CA 00 01 Declarations) to protect the business entity from vicarious liability arising from the use of such vehicles.
- Exclusions Still Apply: The endorsement is subject to the terms, conditions, and exclusions of the main Business Auto Coverage Form. For example, exclusions related to intentional acts, workers' compensation obligations, or fellow employee lawsuits (unless amended by another endorsement like CA 20 55 Fellow Employee Coverage) would generally still apply.
- Employee's Personal Auto Insurance: If an employee is using their own vehicle, their personal auto policy (PAP) is typically primary. The "Employees As Insureds" endorsement on the BAP would then usually apply on an excess basis over the employee's PAP limits. This can be a crucial selling point for employees, as it provides an additional layer of protection.
- Scope of "Course of Business": Disputes can arise over whether an employee was truly operating the vehicle "in the course of business" at the time of an accident. Clear company policies regarding vehicle use are advisable.
- Permissive Use: For autos owned by the named insured, the employee's use must still be with the named insured's permission.
Real-world example: An employee of "ABC Consulting" uses their personal car to drive to a client's office for a meeting. During the trip, they cause an accident. The employee's PAP responds first. If the damages exceed the employee's PAP limits, the "Employees As Insureds" endorsement on ABC Consulting's BAP could then provide excess coverage for the employee's liability. Without this endorsement, the BAP might only cover ABC Consulting's vicarious liability, and the insurer could potentially subrogate against the employee for amounts paid on behalf of the company if the employee was at fault.
4. Key Information for Agents and Underwriters
- Risk Assessment:
- Underwriters will consider the frequency and nature of employee use of personal vehicles for business purposes. Businesses with extensive such use may present a higher risk.
- The driving records (MVRs) of employees who frequently use their own vehicles for company business or operate company vehicles become more critical.
- The types of vehicles being used (if known for non-owned autos) and the typical distances traveled can also be rating factors.
- Pricing: There is typically a premium charge for this endorsement, which can vary based on the number of employees, the extent of non-owned auto usage, and the insurer's rating methodology. Some insurers may have a flat charge, while others might rate it based on the number of employees or a percentage of other auto premiums.
- Coverage Gaps Addressed: This endorsement helps close a significant gap where an employee could be personally liable for damages exceeding their own insurance limits while performing job duties. It also protects the employee from potential subrogation by the employer's insurer in some scenarios.
- Underwriting Guidelines:
- Insurers may have guidelines regarding the minimum liability limits the employee must carry on their personal auto policy.
- The employer's policies and procedures regarding employee use of personal vehicles (e.g., MVR checks, insurance requirements for employees, guidelines on what constitutes business use) will be of interest to underwriters.
- The endorsement is usually added to a Business Auto Policy (CA 00 01) that already provides non-owned auto liability coverage for the named insured.
- Interaction with CA 00 01: The "Employees As Insureds" endorsement amends the "Who Is An Insured" section of the CA 00 01 (or equivalent BAP). The CA 00 01 provides the foundational liability and physical damage coverages, defines covered autos via symbols, and outlines the overall terms and conditions of the commercial auto policy. This endorsement broadens who qualifies as an insured under those foundational coverages for specific situations.
Agents should discuss this endorsement with any commercial auto client whose employees might use their personal vehicles for business errands or who operate company-owned, hired, or borrowed vehicles to ensure both the business and its employees have appropriate protection.