Ah, the wonders of the acronym! How dull or inconvenient our world would be if we had to forsake our fondness for (and the sheer practicality of) those little shortcuts of meaning. From those gracing all office conversation (FYI, ASAP, CYA) to those of the Internet (LOL, ROFL), acronyms both old and new grease the wheels of communication in our daily lives.

While perusing the message trees on a vendor-help Web site, I stumbled across one that may prove particularly useful to insurance folks. After one query, evidently thought to be a bit too basic by the responding staffer, appeared the short and sweet reply: "RTFM!" Not being familiar with that particular acronym, I plugged it into the Google search engine and was directed to an online dictionary for computer jargon. Thereupon I was apprised of the true meaning of the term, parts of which are unsuitable for use in print by anyone other than the Vice President. For our purposes, I will render it thusly: "Read The Freaking Manual!"

Why did this particular Internet acronym strike a chord within my soul? Because I immediately sensed the need for an insurance equivalent-RTFF! As in, "Read the Freaking Form!" Recently, in a CGL class I was teaching, there arose a heated discussion of liability coverage for autos versus mobile equipment. Although the resolution of such disputes invariably turns on whether a specific vehicle is considered to be an "auto" or "mobile equipment," the students got stuck on such side issues as "tags" and "usage on public roads."

Didn't we resolve this issue nearly 20 years ago when the ISO "simplified" CGL forms were released, with a fairly detailed and comprehensive definition of mobile equipment? Unlike the definition of occurrence, the musicality of rap, or the "Harry Potter versus Lord of the Rings (LOTR)" contest (current status: Potter, more books; LOTR, better movies), there is little controversy over the definitions of "auto" and "mobile equipment."

For this month, let's stroll through the ISO CG 00 01 10 01 form and focus on the definition issue, since coverage flows directly from that key determination. The applicable CGL exclusion reads as follows:

g. Aircraft, Auto Or Watercraft
"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading."

Clearly the CGL intends to exclude coverage for liability arising from use of an auto and to move any and all such coverage to the business auto form. So what does the CGL consider to be an "auto," and thus excluded? The definition reads as follows:

"Auto" means a land motor vehicle, trailer or semi-trailer designed for travel on public roads, including any attached machinery or equipment. But "auto" does not include "mobile equipment."

Folks may be so familiar with the term "auto" that they think it is unnecessary to actually read the definition. (After all, the Beatles never sang "Baby, you can drive my mobile equipment.") If they don't read it, however, they will overlook that crucial last sentence.

At this juncture, let's consider two key points. First, the definition of "auto" is the same in the CGL and in the business auto coverage form, so ISO clearly intends no overlap or confusion of terms between the two. Second, anything meeting the definition of "mobile equipment" is not an "auto." A vehicle must be one or the other, never both. If a specific vehicle fits the definition of "mobile equipment," it is not subject to CGL exclusion "g." Now we arrive at the Rosetta stone of all "auto versus mobile equipment" disputes-the policy definition of mobile equipment. Ladies and gentlemen, I present the complete and unabridged definition:

"12. 'Mobile equipment' means any of the following types of land vehicles, including any attached machinery or equipment:
"a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads;
"b. Vehicles maintained for use solely on or next to premises you own or rent;
"c. Vehicles that travel on crawler treads;
"d. Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted:
"(1) Power cranes, shovels, loaders, diggers or drills; or
"(2) Road construction or resurfacing equipment such as graders, scrapers or rollers;
"e. Vehicles not described in a., b., c. or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types:
"(1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or
"(2) Cherry pickers and similar devices used to raise or lower workers;
"f. Vehicles not described in a., b., c. or d. above maintained primarily for purposes other than the transportation of persons or cargo.
"However, self-propelled vehicles with the following types of permanently attached equipment are not 'mobile equipment' but will be considered 'autos':
"(1) Equipment designed primarily for:
"(a) Snow removal;
"(b) Road maintenance, but not construction or resurfacing; or
"(c) Street cleaning;
"(2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and
"(3) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment."
Thus, to determine whether a given vehicle is considered an auto or mobile equipment, simply read through the definition and see if you find that vehicle listed. If so, you have your answer. Don't guess. Don't assume. RTFF!!

Some people have told me the vehicles identified in paragraphs 12.a.-12.e. are clear, but then they get lost when they reach 12.f. and run into that "however." They may become confused because they're trying to figure out a pattern instead of simply reading the definition. Don't try to outguess the form, just read what it says. For example, is a self-propelled "cherry picker" (also commonly referred to as a "bucket truck"-the type used by power company employees working on overhead lines) an "auto" or "mobile equipment"? Read that sentence beginning with "However" again: "...the following types of permanently mounted equipment are not 'mobile equipment' but will be considered 'autos'..." So, according to the CGL definition, a self-propelled cherry picker is an "auto." Why? Because the form says so!

What about coverage for a vehicle with a tag or one being operated on a public road at the time of loss? Do these matters affect how the definitions (and thus coverage forms) apply? Let's RTFF!

First, whether a vehicle bears a "tag" is a non-issue. Nowhere is the term "tag," or even the allied term "registered," ever mentioned. A state can levy fees on any type of vehicle it wishes, but that has no bearing on commercial liability coverage. Put a tag on a power crane and it's still a power crane, clearly defined as "mobile equipment."

Second, public roads are an issue only for certain types of vehicles, and even for those, it doesn't matter if the vehicle is actually on the public roads at the time of the loss. In 12.a., the provision reads "...other vehicles designed for use principally off public roads." It doesn't say "never used upon public roads" or "unless used upon public roads." It refers to vehicles designed for use "principally" off public roads. Occasional and necessary use (traveling to a repair facility, crossing the road to another job site) on public roads is perfectly acceptable, with no impact on coverage.

In 12.b., the public-roads issue may be inferred from the wording "maintained for use solely on or next to premises." Again, the focus is upon intent, not whether the vehicle is actually upon a road at the time of loss. As long as the vehicle is "maintained" for use only on or next to the premises, it is covered as mobile equipment anywhere. (And who's to say that "next to" a premises couldn't include a public road adjoining or abutting said premises?)

Once again we find ourselves coming out from the dark clouds of coverage confusion into the bold, clear light of understanding. It's great when a policy provision makes perfect sense, but even if it doesn't click when first filtered through our own preferences, experiences and prejudices, the form language is still there. Sure, it can confound and obfuscate at times, but too often it is ignored even when clear and unambiguous.

So, unless you want to be DOA and SOL, you'd better CYA ASAP and RTFF!

Special Reports /

Policy Issues: An acronym whose time (unfortunately) has come

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