Most automobile insurance contracts are schedule contracts that permit the insured to purchase both property and liability insurance under one policy. The contract can be divided, however, into two separate parts, one providing insurance against physical damage to automobiles , and the other protecting against potential liability arising out of the ownership , maintenance, or use of an automobile.
Types of contracts: Two standard automobile insurance contracts can be used by businesses.
The first is the business auto policy( BAP), designed for corporations and partnerships insuring any type of automobile (e.g., private passenger automobiles, trucks, or taxis) or for sole proprietors insuring any automobile other than a private passenger automobile.
The second contact is the personal auto policy (PAP), designed primarily for non business automobile, but which sole proprietors can purchase to insure private passenger automobiles used in their businesses.