Earlier this month, I posted an article about a restaurant’s mobile BBQ smoker/grill permanently mounted on a trailer which was disconnected from the towing vehicle and set up at a BBQ cookoff. A child was severely burned by the grill. The question was whether this claim/suit would be covered by the restaurant’s ISO BAP or CGL policy. Click here if you’d like to refresh your memory, especially about the “contest” to win an “RTFP!” t-shirt.
So, which is it? Does it depend on whether the smoker/trailer is an “auto” or “mobile equipment”?
First of all, let’s consider the BAP. When the trailer/smoker is being towed, the BAP covers it and it doesn’t matter whether it’s an “auto” or “mobile equipment.” The BAP says, “If Liability Coverage is provided by this coverage form, the following types of vehicles are also covered “autos” for Liability Coverage … 1. “Trailers” with a load capacity of 2,000 pounds or less designed primarily for travel on public roads… [and] 2. “Mobile equipment” while being carried or towed by a covered “auto”.
But in our case, the trailer/smoker is at a fixed location. So, is this smoker/trailer an “auto”? This definition in the BAP includes a trailer designed for travel on public roads. Kind of sounds like the contraption is an “auto.” But, the definition goes on to say that “’auto’ does not include ‘mobile equipment’.” So, could this actually be “mobile equipment”?
The “mobile equipment” definition in the BAP includes vehicles “maintained primarily for purposes other than the transportation of persons or cargo.” The trailer/smoker isn’t used to transport persons or cargo, so now it sounds like it’s “mobile equipment” and not an “auto.”
Well, the BAP goes on to say in the “mobile equipment” definition:
However, “mobile equipment” does not include land vehicles that are subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged. Land vehicles subject to a compulsory or financial responsibility law or other motor vehicle insurance law are considered “autos”.
So, even if it’s otherwise “mobile equipment,” IF it’s subject to motor vehicle insurance laws, it’s really not a “mobile equipment,” but rather an “auto.” So, it sounds like the injury is covered under the BAP policy? Not so fast. We now move to Exclusion 9 in the BAP for ‘Operations’ which excludes Bi or PD arising out of “the operation of” … “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.”
The trailer/smoker would qualify as “mobile equipment” if it were not subject to motor vehicle insurance laws. And, even if it IS subject to motor vehicle laws, this exclusion says that the BAP does not cover operation of the equipment. So, it doesn’t matter whether the trailer/smoker is subject to motor vehicles laws or not. If it’s NOT, then it’s “mobile equipment” and not covered by the BAP. If it IS, then it’s subject to Exclusion 9 and not covered by the BAP.
The definitions of “auto” and “mobile equipment” are almost identical in the ISO BAP and CGL policy except that the CGL definition of “auto” ends with “…including any attached machinery or equipment” (this distinction is important when we examine the issue of coverage for the operation of equipment below). And, if the trailer/smoker is “mobile equipment,” the only exclusion in the CGL policy is for its transportation by “autos” owned or operated by or rented or loaned to an insured OR its involvement in racing, demolition or stunting activities. So, if the trailer/smoker is “mobile equipment,” it’s covered by the CGL policy.
If the trailer/smoker is an “auto,” the CGL policy has an exclusion for certain aircraft, autos 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”.
Uh oh, looks like this excludes the use of the trailer/smoker IF it’s an “auto.” However, if we continue reading the exclusion, it says that the exclusion does NOT apply to Bi or PD arising out of:
The operation of machinery or equipment that is 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;
So, what happened? The child was injured because of the operation of equipment (the smoker/grill) that was attached to or part of the land vehicle (the trailer). So, even if the trailer/smoker is an “auto” because it’s subject to a motor vehicle law, this exception says that if it would otherwise be “mobile equipment” if it wasn’t subject to such a law, then the exclusion doesn’t apply.
In other words, the CGL policy provides coverage for the operation of the smoker/grill whether it’s “mobile equipment” or an “auto.”
In addition, the CGL would respond to food poisoning claims. This is not an auto exposure.
Winner of the “RTFP!” t-shirt is Maureen Schleich, CPCU in Portland, Oregon. Her response was exactly on point AND she cited applicable policy form language to support her position.
Could this stuff be any easier?! (He says sarcastically.) The next time a customer asks a coverage question, hesitate before you suggest that they simply read the policy.
Latest posts by Bill Wilson (see all)
- Beware Online COI Systems! - April 5, 2021
- Insurance Is NOT a Commodity…Real Life Example #2,146: Acquired Autos - March 31, 2021
- False Advertising, Unfair Trade Practices, and Puffery - March 10, 2021