Policies written for commercial operations that include a vehicle exposure (Business Auto, Garage, Trucker, and Motor Carrier Coverage) are missing an important coverage: Auto Medical Payments.

This coverage handles the reasonable expenses of necessary medical and funeral services suffered by persons (other than those listed as insureds) in an eligible loss. The coverage includes expenses from related sickness, disease and/or resulting death.

The purpose of this coverage is to quickly pay an injured party's medical expenses from a covered accident to minimize the chance of a claim or a lawsuit. Similarly, if an insured's customer or client is injured, the insured will want to provide immediate aid. The action could result in retaining the customer/client's future business and goodwill.

Consider this situation

A standard commercial automobile policy covers Fred's Flavorfill Pizzeria, owned by Fred Thomas. One day, Jenny, a long-standing employee, jumps in a Flavorfill sedan to make a delivery. Patty, Jenny's sister who is visiting from out of town, accompanies her. As Jenny is pulling out of the parking lot, someone enters making a fast, wide turn. Jenny swerves to avoid an accident and hits the pizzeria's sign support. During the collision, Patty's head is violently slammed against the passenger side window.

Scenario One: The pizzeria's commercial auto policy does not have medical payments coverage. A couple of weeks after the accident, Fred is notified that Patty is filing a lawsuit.

Scenario Two: The pizzeria's commercial auto policy is endorsed with a CA 99 03 Medical Pay Endorsement, so it does have medical payments coverage. Fred is able to tell Patty that his insurer will take care of the ambulance and treatment costs. A couple of weeks after the accident, Fred gets a note from the happily recovered Patty, thanking Fred for handling the emergency medical costs.

Businesses that rent vehicles for operations would benefit from auto medical payments coverage as well. Medical payments coverage would extend to passengers injured while occupying rented cars or trucks.

When added as an optional coverage (for an additional premium), auto medical payments must change how the policy to which it's attached works by expanding what persons qualify as covered persons. For example, if the policy is written to cover a sole-proprietorship, the covered persons are expanded to apply to the business owner's family. It also expands protection to apply to persons who are occupying or similar incidences of auto use (rather than restricting coverage to vehicle drivers). Further, medical payments coverage applies to injuries related to a loss involving a vehicle that is a temporary substitute for a vehicle that is listed as owned by the covered business.

Exclusions

Many situations don't qualify for auto medical payments coverage, such as:

  • Injury that occurs when a car or truck is being used as a premises.
  • Injury that is experienced by a covered person while operating or occupying a car that he or she owns, but which is not listed on their commercial auto policy.
  • Injury suffered by an employee of a covered person when the loss also involves their job (such protection is usually provided by workers compensation insurance).
  • Other situations are excluded from auto medical payments protection, but it is still a valuable coverage that many businesses should discuss with an insurance professional.

If you want to learn more about how auto insurance payments can benefit your business, contact the team of experts at Williams Insurance Fullerton. With over 80 years of experience, we can help you have peace of mind when it comes to your business auto coverage.


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