Business Automobile Policy (BAP)

Definition - What does Business Automobile Policy (BAP) mean?

Business automobile policy refers to insurance that covers vehicles like cars, trucks, and vans used for business purposes. These vehicles can refer to those owned or hired by the business owner. This policy can also be extended to vehicles owned by the employees.

Insuranceopedia explains Business Automobile Policy (BAP)

The ones covered by a business automobile policy are the business owner (or the company owner) and those he has employed to use the vehicles owned or hired by the business (or the company).

The business owner may also choose to cover the vehicles owned by the employees if they are used for the business.

This policy will pay for damages in case of a vehicular accident. It also provides assistance in a third-party lawsuit. A personal auto policy is not a substitute for a business auto policy. While the former can pay for damages to a vehicle, it can only do so in the name of the vehicle owner only, but not the business. If there is a third-party lawsuit against the business of the vehicle owner, this will not be covered by the personal auto policy.

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