1. Forms
2. CA
3. CA-23-05

Form CA 23 05: Mobile Equipment Subject To Compulsory Or Financial Responsibility Or Other Motor Vehicle Insurance Law

1. What the form is

The CA 23 05 endorsement modifies the standard Business Auto Policy (BAP), typically related to form CA 00 01 (Business Auto Coverage Form). Its primary purpose is to provide auto liability coverage for specific items of "mobile equipment" when they are operated in situations that subject them to state compulsory auto financial responsibility laws or other motor vehicle insurance laws. Essentially, this endorsement grants scheduled mobile equipment the status of a covered "auto" under the BAP for these specific circumstances, most commonly when such equipment is driven on public roads. Without this endorsement, a piece of mobile equipment driven on a public highway might not qualify as a covered "auto" under the BAP, and the Commercial General Liability (CGL) policy might exclude coverage because the equipment is subject to motor vehicle laws.

2. Classes of business it applies to

This endorsement is crucial for businesses that own and operate mobile equipment which, while primarily used off-road or at job sites, occasionally needs to be driven on public roads. Examples include:

• Construction Companies: Businesses using equipment like backhoes, bulldozers, excavators, graders, and loaders that might be driven between nearby job sites.
• Agricultural Operations/Farming: Farms using tractors or other large farm machinery that may need to cross or travel along public roads to access different fields.
• Landscaping Contractors: Companies with specialized landscaping equipment that is self-propelled and might be driven on streets to reach client properties.
• Municipalities or Public Works Departments: Entities using road maintenance equipment (excluding those always considered "autos") that travels on public ways.
• Mining or Logging Operations: Businesses with specialized heavy equipment that might transit on public roads between operational areas.

Real-world example: A construction company owns a backhoe (typically considered mobile equipment). If this backhoe is driven on a public street from one job site to another and causes an accident, the CA 23 05 endorsement would allow the Business Auto Policy to provide liability coverage, assuming the backhoe is scheduled on the endorsement. Without it, there could be a significant coverage gap.

3. Special considerations

• Scheduled Equipment Only: Coverage under this endorsement applies only to the mobile equipment specifically listed (scheduled) on the endorsement.
• Triggering Coverage: The key trigger for coverage is that the mobile equipment is being operated in a manner or location that subjects it to motor vehicle insurance laws. If the equipment is being used at a private job site and not on a public road, its liability exposure would typically fall under the CGL policy.
• Bridging a Gap: This endorsement is vital for bridging a potential coverage gap between the CGL and BAP. The CGL typically excludes autos (and mobile equipment behaving as autos subject to motor vehicle laws), while the BAP might not cover mobile equipment unless specifically endorsed.
• Definition of "Auto": The endorsement effectively reclassifies the scheduled mobile equipment as an "auto" for the limited purpose of providing liability coverage when subject to motor vehicle laws.
• State Law Dependency: The applicability of compulsory or financial responsibility laws varies by state, so understanding local regulations is crucial.
• No Physical Damage: This endorsement typically addresses liability coverage. Physical damage coverage for the mobile equipment itself usually needs to be addressed separately, often through an inland marine policy or by specifically adding it to the auto policy if the equipment is now considered an "auto."

Real-world example: A farming operation needs to move a large combine a short distance on a county road to reach another field. If that state's law requires such farm equipment to have liability insurance when on public roads, the CA 23 05 would provide this coverage if the combine is scheduled. If an accident occurs while the combine is solely operating in the field, the CGL would more likely respond.

4. Key information for agents and underwriters

• Risk Assessment:
  • Evaluate the type of mobile equipment being scheduled.
  • Assess the frequency, distance, and nature of its use on public roads (e.g., crossing roads, short transit between sites, extended travel).
  • Consider the training and experience of the operators for on-road use.
  • Review the specific motor vehicle laws in the states where the equipment will be operated on public roads.
• Pricing:
  • The premium for this endorsement should reflect the increased exposure of on-road use.
  • Rating may involve treating the scheduled mobile equipment similarly to other commercial vehicles for the portion of its exposure that is on public roads.
• Coverage Gaps:
  • Agents must identify if clients have mobile equipment with any public road exposure to prevent uninsured losses.
  • Ensure clarity on when the BAP (with CA 23 05) responds versus when the CGL responds. The CGL typically covers the equipment's operations when not subject to motor vehicle laws (e.g., at a worksite).
• Underwriting Guidelines:
  • Confirm that the equipment listed is indeed "mobile equipment" that would otherwise not be considered a covered "auto" for on-road use under an unendorsed BAP.
  • Verify that the use of the equipment on public roads is incidental or limited, rather than its primary function (otherwise, it might be better classified as a standard commercial auto).
  • It's good practice to review the insured's CGL policy to ensure proper coordination of coverage and avoid overlaps or further gaps.
  • Require clear scheduling of each piece of mobile equipment to which this endorsement applies.