Section II (Liability Coverage) of the Business Auto Coverage (BAC) form describes who qualifies as an insured (II.A.1.). Employees, and this includes corporate officers and members/managers, using their personally-owned and titled vehicle to conduct business on behalf of the named insured business entity are specifically excluded from the definition of an insured (II.A.1.b.(2)).

Specific exclusion means no coverage is extended. Granted, this is a "duh" statement, but one that must be made to avoid any confusion regarding protection. Any employee, corporate officer, or member/manager driving a vehicle titled in his/her name is NOT extended coverage from the business entity's BAC – even if the vehicle is scheduled in the policy. Yes, the business entity is covered, but the person who owns the vehicle is not.

This exclusion exists to maintain the interconnected relationship between the business entity's BAC and the employee's personal auto policy (PAP). The employee's PAP specifically extends primary liability protection to the employee and to the business entity for which he/she is conducting business. The only limiting factor is the limit of liability coverage provided in the PAP.

However, if the vehicle's owner is depending on the BAC to provide coverage, they have NO COVERAGE - anywhere. Why, because the PAP specifically excludes any vehicle owned by the insured but not listed on the policy. In short, the owner has no coverage, is in danger of high out-of-pocket costs following an at-fault accident, and is in violation of most state laws.

But (isn't there always a "but" in insurance), there are two ways to close this major gap: 1) schedule the auto on the PAP; or 2) endorse the BAC to extend coverage.

The decision to endorse the BAC should not be made lightly. Strict underwriting guidelines must be followed before agreeing to schedule an auto owned by an individual on the entity's BAC. This class details:

• The interconnection between the PAP and the BAC;
• Why the insured would prefer or desire coverage under the BAC;
• The underwriting questions that must be answered before allowing a personally-titled auto onto the BAC;
• The need for a proper lease agreement (and the information it should contain); and
• The proper endorsements to use when adding a personally-owned vehicle to the BAC.