What Is Mobile Equipment Insurance?

Lots of businesses own some form of mobile machinery. That might be a backhoe, bulldozer, crane, forklift, generator, pump, or something else. This machinery is used on your business’s job site or premises. As far as the insurance industry is concerned, this machinery is referred to as mobile equipment.

This article will explore mobile equipment in-depth, and discuss how it’s different from auto. It will also talk about how mobile equipment is usually insured for liability. Lastly, we’ll address some issues that can come up when mobile equipment is taken on a public road.

What is the difference between mobile equipment and auto?

Mobile equipment and auto are listed in the ISO commercial auto and general liability policies. Both definitions in both policies are identical.

Auto is just a land motor vehicle, semitrailer, or trailer is designed to be driven on public roads. An auto is used for transportation. Its main goal is to get people or property from one destination to another over public roads.

On the other hand, mobile equipment is meant to undertake an operation like lifting, scraping, moving, or digging. It is usually used away from public roads. Mobile equipment can be conveyed or driven on a public road, however. It can be driven or taken from one job site to the next, but its primary purpose is not transportation.

Mobile equipment definitions encompass six vehicle categories. These comprise vehicles:

1. Meant to be used off public roads, like farm machinery or forklifts.
2. Meant for use near or on your premises. An example f this is a maintenance truck that never goes off your property.
3. An excavator, or something else that travels on crawler treads.
4. Something designed to carry construction equipment, diggers, loaders, shovels, and more.
5. Something that does not propel itself, and is used to carry cherry pickers, compressors, generators, and pumps that are attached permanently. If it’s self-propelled vehicle, it falls under the auto category.
6. Anything that doesn’t fall into the aforementioned five categories and are used for something other than moving persons or property around.

Equipment Operation Insurance

A basic general liability policy will provide coverage against property damage and bodily injury that comes out of your ownership or use of mobile equipment. That kind of insurance is important, because injuries can be significant from operating mobile equipment. This coverage will apply even if the mobile equipment is not used at your property.

For instance, say that Vincent's Landscaping has a mobile digging machine. This machine has been invaluable for enhancing existing landscaping services and drawing new customers in with new services. It was definitely a worthwhile investment, but insuring that investment against the money it could cost you in the event of property damage or a bodily injury is also important.

The liability coverage that Vincent got for his mobile digging machine will protect against those things whether the machine is used on his premises or at a customer’s house. The equipment is automatically covered. It doesn’t even have to be listed on Vincent's liability policy.

Say that one of Vincent's employees is running the digging machine, and he accidentally rams into the side of a customer’s car. Even though he’s not on Vincent's premises, the damage is still taken care of because of the liability policy.

Now, if one of Vincent's employees is driving the digging machine on a public road, and he accidentally runs into another car on the road, the liability package may not cover the cost of the damage.

Mobile equipment driven on a public road

A lot of states have passed mandatory insurance legislation that covers certain types of mobile equipment. The laws apply to equipment that can be driven on a public road. These laws make it mandatory that mobile equipment owners purchase liability coverage that covers accidents on public roads. The types of insurance for which you have to get liability insurance are different from state to state. For instance, getting liability coverage for a digging machine may be mandatory in one state but not in another.

The mobile equipment definition seen in general liability and commercial auto policies doesn’t apply to land vehicles that are already subject to mandatory or financial responsibility legislation in the state that they are primarily garaged and licensed. Those types of vehicles are included in the definition of auto.

Say that you own a digging machine that is licensed in Texas. If Texas law requires you to insure the digging machine with a general liability policy, then your digging machine is classified as an auto under your liability and auto policies when you are driving it on a public road. It wouldn’t be recognized as mobile equipment during that time.

Keep in mind that if a vehicle (like a digging machine) meets the requirements for the definition of mobile equipment, but falls under some compulsory insurance law, then the vehicle is classified as an auto only when it is on a public road. If the vehicle is involved in some sort of road accident, then your commercial auto liability insurance will need to cover the cost of any damage that arises from the accident. The vehicle is still classified as mobile equipment when it is not being driven on a public road. It will only be considered mobile equipment when it is stored on your premises or used at a job site.

The claims that come out of these types of activities are covered under the general liability policy you have.