Individual Named Insured Endorsement – CA 99 17
By David Thompson, CPCU
When a business auto policy (BAP) names an individual as named insured ISO rules
91.B. and 88.A.1 require that the Individual Named Insured (INI) endorsement be added
to the policy. There is no premium charge for this endorsement, and once attached to the
BAP the INI provides liability and physical damage coverage similar to that found in the
personal auto policy (PAP). While INI is non-premium bearing and mandatory, its use
may be subject to company underwriting. This article summarizes the coverage provided
by the INI endorsement.
Eligibility for INI is those risks where an individual is a named insured. In situations
where only an individual is the named insured on the BAP it’s appropriate to use INI.
Likewise, if an individual and another entity (corporation, partnership, LLC) is also
named then the use of INI is still appropriate.
The main feature of INI is that it adds PAP type liability and physical damage coverage
for the person named, spouse, and resident family members. INI also deletes the “fellow
employee” exclusion found in the BAP.
While INI is added any time an individual is a named insured, the broader PAP type
coverage provided in the endorsement is triggered only when:
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A private passenger auto is covered by the BAP; or
A pick-up or van not used for business purposes is covered by the BAP
For example, if the BAP covered 35 dump trucks the broader PAP type coverage would
not apply. If there were 35 dump trucks and one private passenger auto owned by the
person named in the INI schedule the broader coverage does apply. The “fellow
employee” exclusion is always eliminated, regardless of the type vehicle insured.
The following changes are provided in the BAP when INI is triggered:
Liability coverage: The spouse and resident family members are provided
coverage for the following situations, which are similar to coverage provided by
the PAP for the use of:
1. Any private passenger type auto owned by the named insured(s); and
2. Any auto not owned by the named insured or resident family member.
An example of item #2 would be a spouse or resident child borrowing a
neighbor’s car, or renting an auto from a firm such as Hertz or Avis. Note too,
that the non-owned auto could include a larger vehicle used for personal purposes,
such as the rental of a U-haul box truck to move personal belongings into a new
residence.
Exclusions under liability coverage include:
1. An auto owned by the person named or any resident family member if the auto
is not shown on the BAP.
2. An auto furnished or available for the regular use of the person named or
resident family member.
3. An auto used in the car business, such as service or repair of autos.
4. Any non-private passenger type auto (pick-up, van, box truck, etc.) used in
business, such as a rented U-haul used for business purposes.
Physical damage: For this coverage to apply at least one private passenger auto
must be covered for physical damage under the BAP. Coverage applies for a
“non-owned auto” which is defined to be a private passenger auto, pick-up, van,
or trailer not owned by or furnished or available for the regular use of the person
named, spouse, or family member. For example, a rented Avis Ford Mustang
would be covered, but a rented U-haul box truck would not. An internal limit of
$500 applies for damage to any non-owned auto which is a trailer.
Medical payments: The INI does not affect medical payments coverage. If the BAP
includes medical payments (it must be added via CA 99 03) and if the named insured is
an individual then that individual’s spouse and resident family members are covered
while occupying any auto and as a pedestrian if struck by an auto.
Uninsured motorist: Like medical payments coverage, uninsured motorist coverage is
not affected by INI. If the BAP includes uninsured motorist coverage (it must be added
via CA 21 47 for stacked coverage or CA 21 72 for non-stacked) and if the named
insured includes an individual then the person named, spouse, and resident family
members are provided coverage while occupying any auto or as a pedestrian when struck
by an “uninsured motor vehicle.” (Editor’s note: The UM form numbers are Florida
specific and will vary by state.)
Personal Injury Protection: PIP coverage is not affected by INI. Since the BAP named
insured includes the individual then that person, any spouse, and resident family members
are provided PIP coverage similar to that provided via a PAP. (Editor’s note: PIP
coverage will vary by state.)
Other coverage options: There will be situations where INI will not be appropriate,
such as when an individual is not a named insured under the BAP. In order to obtain
coverage for individuals who have no PAP in the household there are options such as:
Drive Other Car Coverage (CA 99 10). For a discussion of this “DOC”
endorsement check our on-line Education Library titled “Drive Other Car
Coverage”.
Named Non-Owner Coverage (PP 03 22): Such policy provides options for
liability, medical payments, and uninsured motorist coverage. Each person must
be named, including spouses and any resident family members. Note that PIP and
physical damage coverage are not provided under this policy.
It’s important to completely analyze the customer’s business auto policy and make
certain that all employees are properly covered by some auto policy, whether that be a
PAP or BAP with or without INI or DOC added.
Author: David Thompson 7/10/04