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September 12, 2019

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Watercraft Exclusion in CGL Policy Precluded Coverage When Plaintiff Fell On Chartered Yacht

Plaintiff was sitting on a bench on the top deck of a 75-foot rented yacht when the bench tipped. He fell to a lower deck becoming paralyzed. Maryland insured the company who chartered the yacht for a party. It denied coverage based upon a watercraft exclusion which precluded coverage arising out of the maintenance, use or entrustment of a watercraft operated, rented or loaned to the insured. In a declaratory judgment action, the Court ruled in favor of Maryland holding it had no duty to defend and indemnify its insured in a claim by the man who had been injured.

The First District affirmed. The allegation of the complaint was that the bench was placed too close to the edge of an unrailed top deck which related to maintenance of the yacht. As the underlying complaint alleged only claims directly related to maintenance, the watercraft exclusion applied, and Maryland had no duty to defend or indemnify its insured. Maryland Casualty Co. v. Dough Management Co., 2015 IL App (1st) 141520.

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Success in litigating insurance coverage issues hinges on understanding both the interpretation of insurance policies and the handling of claims. These key elements pervade every phase of the business from taking the application, through underwriting, and policy issuance. The members of our firm's insurance coverage practice group understand these elements and the important role they play in risk management. 

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