63. While driving the company car on business, Jack causes an accident with a bus carrying a sports team. Five people were injured in the accident, and the injuries totaled $240,000. Jack's company's business auto policy only covers up to $100,000 in bodily injury per accident. Which of the following would help cover the remaining liability caused by Jack's accident?
Answer: B
Excess liability policy would help cover the remaining liability caused by Jack's accident.
An excess liability policy provides additional coverage beyond the limits of the underlying policy, which in this case is the company's business auto policy. Since Jack's company’s policy only covers up to $100,000 and the total injuries amounted to $240,000, the excess liability policy would cover the remaining $140,000.
A) Extended liability policy
An extended liability policy typically refers to coverage that expands the limits of a specific type of liability insurance but does not necessarily provide coverage beyond the underlying policy limits. In this scenario, it would not address the gap between the $100,000 and the total liability of $240,000.
B) Excess liability policy
This option is correct as an excess liability policy is specifically designed to provide coverage above the limits of existing liability policies. It would cover the additional $140,000 in liabilities that Jack's auto policy does not cover, making it the most appropriate choice for this situation.
C) Commercial general liability policy
A commercial general liability policy covers various risks, including bodily injury and property damage, but it is not specifically designed to cover auto-related incidents. Moreover, it wouldn't directly address the shortfall created by the limits of the business auto policy in this case.
D) Business owners policy
A business owners policy (BOP) combines general liability insurance with property insurance for small businesses. However, it does not typically extend coverage beyond the limits of existing auto liability insurance, making it insufficient for covering the excess liability resulting from the accident.
Conclusion
The excess liability policy is the definitive solution for covering the remaining liability from Jack's accident, as it provides the necessary additional coverage above the business auto policy limit. Other options, while useful in different contexts, do not address the specific gap in coverage created by the existing policy limits. Thus, the excess liability policy is essential in ensuring that Jack's company is fully protected against the total damages incurred.