Question about Liability exclusions

Question about Liability exclusions

by Deleted user -
Number of replies: 3

Can anyone explain me why the below answer is incorrect? What exclusion applies here?

Which of the following have liability coverage under the PAP, when the named individual is driving a borrowed private passenger vehicle while performing an errand for his/her employer?
Choose one answer.
A. None of the answers are correct
B. The owner of the vehicle Incorrect
C. Both answers are correct
D. The named individual's employer

Thank you!
In reply to Deleted user

Re: Question about Liability exclusions

by Jan Bradburn- -

Hi Allende,

When a person uses a vehicle (including a borrowed vehicle) for business, the employer is vicariously liable when an accident occurs and the employer becomes an insured. Please see page 45 (bottom) in the state manual for clarification.

Jan

In reply to Jan Bradburn-

Re: Question about Liability exclusions

by Deleted user -

Hi Jan,

I will bring this one up again since I'm studying for the state exam and I still don't quite have this 100% ironed out.

So, you mentioned that "the employer becomes an insured"...but under what policy? The individual's one? Meaning that, as the law will make the employer liable for the damages if I drive a borrowed car for work related stuff, then my policy will cover my employer?

Also No.4 in that page. How is that using a borrowed car to run an errand for my employer is an "act or omission" of the named insured(Me)?? That point is absolutely confusing for me the way its written in the manual.

Thanks in advance

In reply to Deleted user

Re: Question about Liability exclusions

by Jan Bradburn- -
Allende, This falls under vicarious or contingent liability. The insurance policy of the party who is being sued would apply by definition of "who is insured". Vicarious liability lawsuits generally occur because of insufficient funds of the party being sued. The injured party looks for where they can be reimbursed and files a claim against any/all remotely involved in the accident. Another good example of this is an drunk driver accident where the bar is vicariously liable for serving the alcohol. The liability policy of the bar would apply. Jan