BASIC FACT PATTERN. CR Electrical Contractors, Inc. "CREC") is an Iowa corporation with its principal place of business in Cedar Rapids, lowa. It is owned by John Jones, who employs a total of six 6) individuals including him. His spouse, Mary Jones, is the Office Manager and performs all of the accounting functions and provides assistance with bids. The other four (4) employees, like John, are journeyman electricians who are capable of all residential and commercial electrical work including service activities. The business has an average of S1,500,000 of revenue annually. The following supplemental information represents the insurance coverages issued to the business by Dependable Insurance Company. Bill Best is the insurance agent for CREC, Inc. and the policies are issued to CREC through Bill's independent insurance agency, Best Insurance Agency, Ltd., also located in Cedar Rapids. John Jones is friends with the owner of the local Chevrolet automobile dealership. Each of the four (4) electrician employees is entitled to drive a CREC owned pickup to, during, and from work since CREC can be called upon to provide electrical service to a customer at any time of the day. John Jones also drives a CREC owned Chevrolet pickup to, during, and from work and his spouse, Mary, drives a CREC owned Chevrolet Equinox to, from, and during work. John Jones is aware that any of these vehicles has the potential to be used by the employee for personal reasons CREC has a commercial auto policy (business auto coverage form) with covered autos liability (Symbols 7, 8, and 9) and occurrence limits of $500,000; auto medical payments, Symbol7, $5,000 each insured, uninsured motorists and underinsured motorists each with limits of S500,000 per occurrence, Symbol 7, comprehensive, Symbol 7, and collision, Symbol 7, each at actual cash value and a deductible of $500. Answer the following questions: A CREC employee was using his own vehicle for work related activities because the truck furnished to him by CREC was being serviced. While driving to a job site, the employee caused an automobile accident that injured another motorist and totaled that motorist's vehicle as well as the employee's vehicle. The injured motorist sues the employee and CREC for bodily injury and property damages suffered. Explain CREC's and the employee's coverage for these exposures. (5 POINTS) A. An employee driving a CREC pickup is enroute to a job site on a winter day. The employee loses control of the pickup on an icy road and it overturns, resulting in the destruction of the truck and the equipment and supplies in . The value of the truck is S15,000; the value of the supplies is $2,500. Explain the coverages available under CREC's BAC Form policy, if any. (5 POINTS C. John and Mary Jones have a teenage son who is not an employee of CREC. Nonetheless, Mary allows the son to use her Equinox for the son's personal use. While driving the Equinox, the son caused an accident that resulted in $10,000 damage to the Equinox S3,750 of medical expense to the teenage son, and $7,500 of damage to the automobile involved in the accident. Luckily, the other driver was not injured. What dollar amount for the identified losses, if any, wl be paid under the BAC issued to CREC, Inc. and why will t be paid? If the loss will not be covered, explain why. (5 POINTS CREC's insurance agent suggests that CREC raise the misof ts uninsured and underinsured motorists coverage from S500,000 to $1,000,000. The cost is $250 annually. John and Mary are tired of making insurance decisions and ask you for advice What do you tell them? (5 POINTS BASIC FACT PATTERN. CR Electrical Contractors, Inc. "CREC") is an Iowa corporation with its principal place of business in Cedar Rapids, lowa. It is owned by John Jones, who employs a total of six 6) individuals including him. His spouse, Mary Jones, is the Office Manager and performs all of the accounting functions and provides assistance with bids. The other four (4) employees, like John, are journeyman electricians who are capable of all residential and commercial electrical work including service activities. The business has an average of S1,500,000 of revenue annually. The following supplemental information represents the insurance coverages issued to the business by Dependable Insurance Company. Bill Best is the insurance agent for CREC, Inc. and the policies are issued to CREC through Bill's independent insurance agency, Best Insurance Agency, Ltd., also located in Cedar Rapids. John Jones is friends with the owner of the local Chevrolet automobile dealership. Each of the four (4) electrician employees is entitled to drive a CREC owned pickup to, during, and from work since CREC can be called upon to provide electrical service to a customer at any time of the day. John Jones also drives a CREC owned Chevrolet pickup to, during, and from work and his spouse, Mary, drives a CREC owned Chevrolet Equinox to, from, and during work. John Jones is aware that any of these vehicles has the potential to be used by the employee for personal reasons CREC has a commercial auto policy (business auto coverage form) with covered autos liability (Symbols 7, 8, and 9) and occurrence limits of $500,000; auto medical payments, Symbol7, $5,000 each insured, uninsured motorists and underinsured motorists each with limits of S500,000 per occurrence, Symbol 7, comprehensive, Symbol 7, and collision, Symbol 7, each at actual cash value and a deductible of $500. Answer the following questions: A CREC employee was using his own vehicle for work related activities because the truck furnished to him by CREC was being serviced. While driving to a job site, the employee caused an automobile accident that injured another motorist and totaled that motorist's vehicle as well as the employee's vehicle. The injured motorist sues the employee and CREC for bodily injury and property damages suffered. Explain CREC's and the employee's coverage for these exposures. (5 POINTS) A. An employee driving a CREC pickup is enroute to a job site on a winter day. The employee loses control of the pickup on an icy road and it overturns, resulting in the destruction of the truck and the equipment and supplies in . The value of the truck is S15,000; the value of the supplies is $2,500. Explain the coverages available under CREC's BAC Form policy, if any. (5 POINTS C. John and Mary Jones have a teenage son who is not an employee of CREC. Nonetheless, Mary allows the son to use her Equinox for the son's personal use. While driving the Equinox, the son caused an accident that resulted in $10,000 damage to the Equinox S3,750 of medical expense to the teenage son, and $7,500 of damage to the automobile involved in the accident. Luckily, the other driver was not injured. What dollar amount for the identified losses, if any, wl be paid under the BAC issued to CREC, Inc. and why will t be paid? If the loss will not be covered, explain why. (5 POINTS CREC's insurance agent suggests that CREC raise the misof ts uninsured and underinsured motorists coverage from S500,000 to $1,000,000. The cost is $250 annually. John and Mary are tired of making insurance decisions and ask you for advice What do you tell them? (5 POINTS