Coverage for a serious bodily injury was barred under the policy's watercraft exclusion. United States Fire Ins. Co. v. Hawaiian Canoe Racing Ass'n, 2019 U.S. Dist. LEXIS 207564 (D. Haw. Nov. 27, 2019). A related case involving the accident and addressing coverage issues under a policy issued by Great Divide Insurance Company was previously posted here.

    The Hawaiian Canoe Racing Association (HCRA) was a sponsor of the 2016 Pailolo Challenge Outrigger Canoe Race on September 17, 2016, from Kapalua, Maui to Kaunakakai, Moloka`i. Mark Stevens agreed to provide and operate an escort boat, the Ohana, for one of the teams. Before the Ohana began escorting the underlying plaintiff's team to the staging area, Steven's hat flew into the water. The underlying plaintiff went into the water to retrieve the hat. As she re-entered the boat from the rear, the Ohana reversed and a propeller struck the plaintiff, causing significant injuries. Her left leg was eventually amputated. 

    The plaintiff sued Stevens, alleging he was negligent or grossly negligent in operating the Ohana. HCRA was also sued for negligence and for failure to obtain sufficient liability insurance prior to the event. 

    HCRA tendered to its insurer, U.S. Fire, who had issued a Marine Policy. Coverage was denied. U.S. Fire sued for a declaratory judgment and moved for summary judgment. 

    U.S. Fire argued that Watercraft Exclusion A applied because the bodily injury arose out of the use of the Ohana, a watercraft. The exclusion applied if the watercraft was either owned by, operated by, rented to loaned to or chartered to an insured. The court found that an insured from HCRA contracted with Stevens to secure his operation of the Ohana as an escort boat. The injuries, occurring when the underlying plaintiff re-entered the Ohana, arose from the operation of the Ohana. 

    The court found that the Ohana was chartered by an insured, an individual from HCRA. The policy also included a Charterer Endorsement which provided coverage for the claims alleged in the underlying action if the Ohana was one of the covered watercraft under the policy and none of the exclusions applied. The Ohana, however, was not listed as a covered watercraft, so the Charterer Endorsement did not apply. 

    The court therefore found that, as a matter of law, U.S. Fire did not have a duty to defend, nor a duty to indemnify HCRA or any other insured in the underlying action.