Mobile Equipment Transportation Causes Damage

Our insured was transporting his auger in his pickup truck. The auger gear box came loose (cotter pin missing) and it fell into traffic causing a multicar accident. The auto policy paid for the loss and the auto insurer now wants reimbursement from the CGL carrier. The auto insurer claims that the damage was caused by a failure of the mobile equipment and not from the transportation of the equipment.

Does exclusion (h) on the CGL form pertaining to damage arising out of the transportation of mobile equipment apply in this instance?

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