Newsletter Articles

iNews Articles 2010

Wellness Awareness

Glossary of Terms

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Nonprofit Resources is a wholly owned Subsidiary of Colorado Nonprofit Association

Business Auto Policy -2-

Physical damage is known as first-party coverage. It protects the financial interest the first party (the nonprofit or insured under the policy) has in the auto.

Collision coverage examples: The driver of the nonprofit's van backs it into a pole and dents the van. The driver of the van hits the rear of a vehicle at a stop sign. Damage to the van is covered under collision. All other damage is covered under property damage liability.

Comprehensive coverage examples: The nonprofit's van is vandalized. A tree falls on the van while it is parked in the driveway. A rock hits the windshield of the nonprofit's van and breaks it. Damage to the van is covered under comprehensive.

If the auto is leased or the nonprofit is still making monthly payments on an auto loan, the leasing or lending company will require the nonprofit to carry physical damage coverage. Frequently, lenders require that they be named as a loss payee on the auto policy. Most insurers will readily name the leasing or lending company as a loss payee for no charge.

Common Exclusions

• Expected or intended injury:
  Physical damage or bodily injury expected or intended from the standpoint of the insured is excluded under the Business Auto Policy. If the driver of the nonprofit's van hits something (or someone) intentionally, the insurance does not apply.
• Pollution:
  Any bodily injury or property damage arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants is excluded under the Business Auto Policy. If the nonprofit hauls a pollutant (gasoline, oil recycling drums), it would not be covered by this policy. The nonprofit would have to purchase a pollution liability policy to insure against that exposure.
• War:
  Bodily injury and property damage due to war, whether or not declared, or any act or condition incident to war, are excluded under the policy.
• Racing:
  Insured autos while used in any professional or organized racing or demolition contest or stunting activity or while practicing for any contest or activity are not covered under the Business Auto Policy.

Unusual Exclusions

• Driver:
  A carrier may elect to exclude a driver due to his or her driving record. Typically, the executive director must sign an acknowledgement indicating that auto coverage does not extend to the excluded driver.

The staff at Nonprofit Resources has many years of experience helping organizations to determine the appropriate coverage. Give us a call if you would like to talk with us about our insurance programs.

Let us address one of your questions!