The Aircraft, Auto, or Watercraft Exclusion to the CGL Policy

Comprehensive general liability or CGL policies provide protection for a business against liability for personal injury or property damage of a third party caused by the business. However, certain types of liability are not covered by the standard form CGL policy due to various exclusions added to the policy. One such exclusion is Exclusion g — aircraft, auto, or watercraft, which generally excludes CGL coverage for liability arising from ownership or operation of autos, airplanes, and boats. If insurance is needed for the ownership or operation of such vehicles, policies in addition to the comprehensive general liability policy will have to be obtained. An example of this type of exclusion follows:

”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.”

This exclusion does not apply to:

(1) A watercraft while ashore on premises you own or rent;

(2) A watercraft you do not own that is:

(a) Less that 26 feet long; and

(b) Not being used to carry persons or property for a charge;

(3) Parking an ”auto” on, or on the ways next to, premises you own or rent, provided the ”auto” is not owned by or rented or loaned to you or the insured;

(4) Liability assumed under any ”insured contract” for the ownership, maintenance or use of aircraft or watercraft; or

(5) ”Bodily injury” or ”property damage” arising out of the operation of any of the equipment listed in paragraph f.(2) or f.(3) of the definition of ”mobile equipment”.

The exception in sub-paragraph 5 above refers to self-propelled “(2) cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and (3) air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment.” By this listing in sub-paragraph 5, operation of the listed self-propelled machinery is not excluded from coverage under the CGL policy even though the machinery is considered part of an “auto” due to its mobility. However, liability from using the vehicle to move its permanently attached machinery from place to place would be excluded from CGL policy coverage. For example, liability for damage to underground lines from use of a mobile drilling machine would be covered under the CGL policy, but liability for damage from a collision in an accident when the machine is being moved to a new job location would not be covered.

Copyright 2011 LexisNexis, a division of Reed Elsevier Inc.