Mobile Equipment Definition and Auto Exclusion

The insured's operations consist of renting refrigerated vans for the storage of merchandise. Although the insured maintains its ownership when rented, the van remains on the client's premises as long as needed; the ownership of the merchandise within it remains with the client. The insured is responsible for maintaining the van in good conditions including re-fueling it to maintain the refrigeration system. The re-fueling is done by moving the van to a gasoline station.

While at the customer's premises, allegedly for a failure in the maintenance, the goods inside the van spoiled. The van is subject to the motor law registration, and we need your opinion on the following: is the van considered mobile equipment at the time of the loss, or can the claim be declined because of the exclusion (g) Aircraft, Auto or Watercraft, on the CGL form. The CGL form is the 10 01 edition.

Florida Subscriber

The auto exclusion applies in this instance. The intent of that exclusion is to have vehicles subject to the motor law registration considered as autos and covered under an auto policy and not the CGL form. The current CGL form clarifies this intent by defining an auto as a land vehicle that is subject to a compulsory or financial responsibility law, and defining mobile equipment as not including such vehicles. So, since this vehicle is subject to the motor law registration, it should be considered an auto and it is owned by the named insured and the PD occurred out of the ownership, maintenance, or use of this vehicle, and so, the auto exclusion applies.