Mobile Equipment
Vehicles or equipment not subject to motor vehicle registration, covered under CGL rather than commercial auto policies.
What It Is
Mobile equipment refers to vehicles and self-propelled machines that are not required to be registered for use on public roads. Under ISO definitions, mobile equipment includes bulldozers, forklifts, cranes, farm machinery, golf carts on premises, and other vehicles designed primarily for use off public roads or on the insured's premises.
The distinction between mobile equipment and autos is critical because the CGL policy covers liability arising from mobile equipment but excludes liability arising from autos. Conversely, the Business Auto policy covers autos but not mobile equipment. If a vehicle is misclassified, it falls into a coverage gap between the two policies.
ISO defines specific criteria for the mobile equipment classification, including whether the vehicle is subject to motor vehicle registration laws, whether it is designed for use on public roads, and its primary function. Vehicles that travel on public roads under their own power (like construction equipment driving between job sites) may shift classification based on whether they are required to be registered.
Why It Matters for Brokers
Misclassifying a vehicle as mobile equipment when it is actually an auto—or vice versa—creates a dangerous coverage gap. Brokers must understand the ISO definitions to ensure each vehicle is insured under the correct policy. This is especially critical for construction, agriculture, and manufacturing accounts where the line between mobile equipment and autos is frequently blurred.
Real-World Example
A construction company's forklift (mobile equipment, covered by CGL) is driven across a public road between two job sites and strikes a pedestrian, causing $425,000 in injuries. If the forklift is registered for road use, it becomes an auto—excluded by the CGL. If it is not registered, it remains mobile equipment—excluded by the auto policy. The broker must verify registration status and ensure the correct policy covers the exposure. In this case, an endorsement to the auto policy for mobile equipment subject to compulsory auto liability laws resolves the gap.
Common Mistakes
- 1Assuming all construction equipment is mobile equipment without checking whether any units are registered for road use, which would make them autos.
- 2Not adding the mobile equipment endorsement to the auto policy for equipment that occasionally travels on public roads.
- 3Failing to list mobile equipment on the CGL policy when the carrier requires scheduled equipment for coverage to apply.
How brokerageaudit.com Handles This
brokerageaudit.com's Submission Intake captures vehicle registration status for all equipment and flags units that may straddle the mobile equipment and auto classification. The Policy Checker cross-references equipment lists between the CGL and auto policies to verify no vehicle falls into a coverage gap between the two forms.