The Employees as Insureds endorsement CA 99 33 addresses an exclusion that states an employee is not an insured while driving a covered auto owned by that employee or a household member. What liability coverage is provided?

• A. Primary
• B. Excess
• C. Both primary and excess
• D. None

Answer: (B)

The key idea here is how the Employees as Insureds endorsement changes who pays first when the driver is using a vehicle owned by the driver or a household member. Because the endorsement excludes the employee from being insured in that scenario, the business auto policy doesn’t act as the primary coverage. Instead, it provides excess liability coverage—kicking in only after the driver’s own personal auto policy (and any other applicable coverage) has paid up to its limits, up to the business policy’s limits.

For example, if the employee's personal auto policy has a $100,000 limit and the accident causes $250,000 of liability, the personal policy would pay $100,000, and the business auto policy would pick up the remaining $150,000 (subject to its own limit). That is why the correct understanding is that the coverage provided is excess liability coverage.