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Q: Snow Plowing... BAP or CGL? 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.”
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.
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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 22| |DECEMBER DECEMBER2020 2020 | | 22
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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.
