The form is straightforward and provides liability and medical payments coverage for "watercraft liability" beyond what is provided in the homeowners form itself. The form relies on the policy definition of "watercraft liability", which is included with the definition of "Aircraft Liability", "Hovercraft Liability" and "Motor Vehicle Liability" as follows:

1. "Aircraft Liability", "Hovercraft Liability", "Motor Vehicle Liability" and "Watercraft Liability", subject to the provisions in b. below, mean the following:

a. Liability for "bodily injury" or "property damage" arising out of the:

(1) Ownership of such vehicle or craft by an "insured"; (2) Maintenance, occupancy, operation, use, loading or unloading of:

(a) An aircraft, hovercraft or watercraft by any person; or (b) A motor vehicle by an "insured";

(3) Entrustment of such vehicle or craft by an "insured" to any person; (4) Failure to supervise or negligent supervision of any person involving such vehicle or craft by an "insured"; or (5) Vicarious liability, whether or not imposed by law, for the actions of a child or minor involving such vehicle or craft.

b. For the purpose of this definition:

(1) Aircraft means any contrivance used or designed for flight except model or hobby aircraft not used or designed to carry people or cargo; (2) Hovercraft means a self-propelled motorized ground effect vehicle and includes, but is not limited to, flarecraft and air cushion vehicles; (3) Watercraft means a craft principally designed to be propelled on or in water by wind, engine power or electric motor, except model or hobby watercraft not designed to carry people or cargo; and (4) Motor vehicle means a "motor vehicle" as defined in 11. below.

Any "bodily injury" or "property damage" arising out of the ownership, maintenance, use, occupancy, operation, loading or unloading of a watercraft is what defines "watercraft liability". While not a defined term, watercraft are those craft principally designed to be propelled on or in water by wind, engine power or electric motor. An exception exists for hobby watercraft not designed to carry people or cargo. This is very broad, allowing for craft such as motorized surfboards, jet skis, and other types of craft to be scheduled onto the endorsement.

SECTION II – EXCLUSIONS

With respect to the watercraft described in the Schedule, Exclusion B. Watercraft Liability is replaced by the following:

B. Watercraft Liability

1. Coverages E and F do not apply to any "watercraft liability" if, at the time of an "occurrence" the involved watercraft is being:

a. Operated in, or practicing for, any prearranged or organized race, speed contest or other competition. This exclusion does not apply to a sailing vessel or a predicted log cruise; b. Rented to others; c. Used to carry persons or cargo for a charge; or d. Used for any "business" purpose.

2. Coverages E and F do not apply to "bodily injury" to any "employee" arising out of and in the course of employment by an "insured" if the employee's principal duties are in connection with the maintenance, operation or use of a watercraft described in the Schedule. All other provisions of this Policy apply.

Analysis

Once the coverage provided has been explained, the form addresses exclusions. It removes the watercraft liability exclusion from the policy and replaces it with one much less restrictive since the idea is to provide liability coverage. There are only four exclusions; the first is the standard racing exclusion, where any practicing or operating of a craft for any prearranged or organized race, speed contest, or other competition is excluded. The exception for sailing vessels or predicted log cruises applies. This is the standard racing exclusion found in any vehicle policy.

The other exclusions are for the renting of the craft to others, using the craft to carry persons or cargo for a fee, or "business" use. All of these exclusions entail the insured charging others for the use of the boat in some way, shape, or form, or for any "business use" of an insured, even if the insured is not transporting people or cargo for a fee. If the insured is entertaining customers of his business on his boat, any injuries received by passengers would be excluded.

A final exclusion exists for "employees" whose primary duties are in connection with the maintenance, use or operation of a scheduled watercraft if the injury occurs while the employee is performing his duties. For example, an insured has surgery and is unable to operate his boat for the summer. He hires a seaman to help him take care of the boat and drive it for him when he wants to go out on the water. If the seaman is injured while caring for the boat, those injuries are not covered. Includes copyrighted material of Insurance Services Office, Inc., with its permission.