Question from an IIABNY member: I am hoping you can clarify the following issue. We have several insureds who may incidentally drive a piece of equipment (which is not licensed or registered for road use) along a road. Since this is so incidental, they are willing to take the chance with the NYS law and not have this equipment licensed.
I have assumed that as long as the insured has symbol 1 on their policy (form CA 00 01 03 06 applies), it is ok that this equipment is not specifically listed on the policy.
Answer: Here’s my line of thought:
- Per the ISO BAP (CA 00 01 03 06), Symbol 1 means any “auto”, as the policy defines that term.
- The policy defines “auto” as:
1. A land motor vehicle, "trailer" or semitrailer designed for travel on public roads; or
2. Any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged.
However, "auto" does not include "mobile equipment".
- The definition of “mobile equipment” states, “Land vehicles subject to a compulsory or financial responsibility law or other motor vehicle insurance law are considered ‘autos’.” (emphasis added) Note that the definition does not say that the vehicle must be registered; it says that the vehicle must be subject to a compulsory liability insurance law, which in this state means that it must be registered with the DMV. When your insured’s vehicles are used on public roads, they automatically become subject to New York’s compulsory financial responsibility law (N.Y. Vehicle and Traffic Law Section 312.) Therefore, the policy considers the vehicles to be “autos” in this situation, and since the dec page shows symbol 1 for Liability Coverage, the policy should afford coverage for the insured’s legal liability for injuries or damages resulting from their use.
- Lastly, I checked the mandatory endorsement New York Changes in Business Auto, Business Auto Physical Damage, Motor Carrier And Truckers Coverage Forms (CA 01 12 04 09) to see if it changes any of these terms, and it does modify the definition of “mobile equipment.” It tacks on the following changes:
However, the operation of:
a. (Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting or well servicing equipment); or
b. Machinery or equipment that is on, attached to, or part of, a land vehicle that would qualify under the definition of “mobile equipment” if it were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged
is considered operation of “mobile equipment” and not operation of an “auto.”
So, when a vehicle is being driven and its attached equipment is not in use, it’s an auto. When it’s stationary or slow-moving and its attached earth loader is in use, then it’s mobile equipment.
To sum up, I think your interpretation is correct, but coverage could switch between the auto and GL policies several times in a given workday. If a claim involving one of these vehicles ever occurs, it might be best (from an E&O loss prevention standpoint) to submit claims under both policies and let the carriers determine which one applies.