At first blush, claiming coverage as an “insured” based on the policy language appears logical. However, a complete reading of the appropriate provisions make it clear that there is no coverage to be had.

First, the definition of “insured” quoted above contains the language to which this policy applies. Therefore, with respect to animals or watercraft the policy must first apply. If we turn to the Section II insuring agreement, the policy states “If a claim is made or a suit is brought against an 'insured' for damages because of 'bodily injury'… caused by an 'occurrence' to which this coverage applies, we will…” Here again we have the reminder that the policy must apply to the loss.

This brings us to the watercraft with the 50 HP inboard engine. Section II exclusion 1.g. (1991 ISO HO 00 03) states that the insurance does not apply to bodily injury “arising out of: (1) The ownership, maintenance, use, loading or unloading of an excluded watercraft described below…” Excluded watercraft includes those that are powered by inboard or inboard-outdrive engines or motor power of more than 50 HP. The exclusion does not apply to this type of watercraft if it is “not owned by or rented to an 'insured'.”

But the boat is owned by an insured; in this instance, it is owned by the named insured. Even if the friend claims coverage as an insured, the preclusion of coverage for this watercraft cannot be ignored. A review of pertinent cases shows the exclusion has been upheld. In one example, a suit for damages for an injury involving an excluded watercraft alleged negligent entrustment. The court declared the watercraft, a 140 HP power boat, was unambiguously excluded and added “A Georgia court would find the watercraft exclusion in homeowner's policy applied to any negligence of insureds in entrustment of powerboat to party guest since negligent use was still essential to the tort, and thus tort of negligent entrustment would be found to arise out of use of instrumentality…” Because the “instrumentality”—the watercraft—was itself excluded, it followed that there was no coverage no matter what theory of liability was alleged. (See Southeastern Fire Insurance Co. v. Heard, et al., 626 F.Supp. 476 (U.S. Dist. Ga. 1985).

In summation, based on the policy's language clearly stating that it must apply to a claim for damages, and the exclusion for bodily injury arising out of use of certain excluded watercraft, there is no coverage for the friend as an insured under the policy.