1. Forms
2. CP
3. CP-10-35

What the Form Is

The CP 10 35 Watercraft Exclusion is an endorsement to the Commercial Property Causes of Loss – Special Form (CP 10 30). Its primary function is to eliminate coverage for physical loss or damage to specific types of waterfront property when that damage is directly caused by watercraft. The types of property typically listed in this exclusion include retaining walls (that are not part of a building), bulkheads, pilings, piers, wharves, and docks.

Classes of Business It Applies To

This endorsement is relevant for any commercial property policy where the insured has exposures related to waterfront property. Examples include:

• Marinas and boatyards
• Waterfront restaurants or hotels
• Port authorities or terminal operators
• Commercial properties with private docks, piers, or bulkheads
• Municipalities with public waterfront structures

It is particularly pertinent when coverage for such waterfront structures has been specifically added to the policy, for instance, through an endorsement like CP 14 10 Additional Property.

Special Considerations

Key considerations for the CP 10 35 include:

• Mandatory Application: In some cases, insurers may mandate this endorsement if coverage for waterfront structures (like piers and docks) is added using CP 14 10, to specifically carve out damage by watercraft to these structures.
• Specificity of Exclusion: The exclusion applies to damage to the scheduled types of property (piers, docks, etc.) by watercraft. It does not necessarily exclude all incidents involving watercraft.
• Coverage Gaps: If this endorsement is attached, the insured will not have coverage under the Special Form for damage to their listed waterfront structures if a boat or other watercraft strikes them. Alternative coverage, if available, would need to be sought elsewhere, potentially through a marine-specific policy or by negotiating the removal of this exclusion, likely for an additional premium.

Key Information for Agents and Underwriters

Agents and underwriters should be mindful of the following:

• Risk Assessment: For properties with waterfront exposures, the underwriter must assess the likelihood and potential severity of damage to docks, piers, etc., from watercraft. This includes considering the type and volume of water traffic, the construction of the waterfront structures, and any protective measures in place.
• Clarity of Coverage: Agents should clearly explain this exclusion to insureds who have waterfront property, ensuring they understand the limitation in coverage. If the insured has added coverage for piers and wharves, it's crucial they know that damage by watercraft to these structures is still excluded by CP 10 35.
• Pricing Implications: The presence of this exclusion generally means the insurer is not taking on the risk of watercraft damaging these specific structures. If an insured requests this coverage, it would require careful underwriting and would likely result in a higher premium.
• Interaction with Other Forms: It's essential to understand how this endorsement interacts with the primary Causes of Loss form (CP 10 30) and any endorsements that add coverage for specific property, like CP 14 10.