LONE EAGLE RESORTS, INC. v. ACE AMERICAN INSURANCE COMPANY Charter Policy

8/7/2019 LONE EAGLE RESORTS, INC. v. ACE AMERICAN INSURANCE COMPANY Charter Policy

1/65

EXHIBPage 1 o

Case 3:08-cv-00050-TMB Document 1-1 Filed 03/24/08 Page 1 of 16

ChafterPolicyPolicy Number: SP C Y07954840

Recreational Marine InsuranceOne o fthe ACE Group ofCompanies

RENEWALAgency Code, Name & Address226834NORTHERN MARINE INSURANCE19630 76 AVE WESTLYNNWOOD, WA 98036

This is your Char te r Policy's Declarations Page. Please read carefully. It gives you important facts about yourcoverage .. The Company Providing This Insurance

The Named Insured Under This Policy:

Address:

ACE AMERICAN INSURANCE COMPANY436 Walnut S t r e e t , P.O. Box 1000

Ph i l a , PA 19106-3703(NAME)

LONE EAGLE RESORTSDBA PYBUS POINT LODGE

PO BOX 33497JUNEAU, AK 99803The Vessel Covered By This Policy (NAME)

Refe r to Scheduled Ve'ssel Endorsement (MA-2W80) fo r Ind iv idual Vessel Information(yEAR BUlL"!) (LENG1l!) (MAKE) (MODEL) (DOC. OR HULL. IDENT. NO)

This policy will take effect on 6/1 /2007 and end on 6/1/2008It will begin and end at 12:01 A.M. standard time, at the place where this policy was issued.In return for the "Total Premium," listed below, we agree to provide the insurance coverages for which a premium is shown in thechart below.COVERAGE PROVIDED-- AMOUNTPARTS

A

BCDEFG

COVERAGESProperty DamageWindstonn Deductible

OF INSURANCE$ See MA-2W80

Commercial Towing & Assistance $ See MA-2W80Liability Coverage $ See MA-2W80Medical Payments $ See MA-2W80Uninsured Boater $ See MA-2W80L&HCA $ Statutory LimitsTrailer $ Not CoveredPersonal Property $ See MA-2W80Premium Bearing Endt(s): See Attached Endorsements

DEDUCTIBLEAMOUNT$$$$$$$$$

See MA-2W80PREMIUM$ 3,875$ 0$ 0$ 2,442$ 0$ 0$ (included in "B" if any)$$$

o2,100

TOTAL PREMIUM $ 8,417LIMITS ON USE: See Navigation Warranty See MA-2W80ENDORSEMENTS:ALL20887 ALL-4X07 MA-1X0ge MA-2T99 MA-2W74 MA-2W80 MA-7W63 MA-8301fMA-9S93 MA-9S98

Lay-up Warran ty ' - It is warranted the vessel will be laid up for part of the year, the dates are:From noon: To noon:Laid up Ashore 0 If this box is marked. you agree to lay-up your vessel ashore during the above period.LOSS PAYEE: We will make payments for Par t A: Property Damage losses to the Assured and

Countersigned atthis day o f ; ~ '

MA-7N39i (06/05) INSURED COPY~ , A g e n t

412612007


2/65

EXHIBIT APage 2 of 48


ACE INA PRIVACY STATEMENTThe ACE INA group of companies strongly believes in maintaining the privacy of information we collect about individuals. Wewant you to understand how and why we use and disclose the collected information. The following. provides details of our practicesand procedures for protecting the security of nonpublic personal information that we have collected about individuals. This privacystatement applies to policies underwritten by the ACE INA group member companies listed below.

INFORMATION WE COLLECT

The information we collect will vary depending on the type of product or service individuals seek or purchase, and may include:

Information we receive from individuals, such as their name, address, age, phone number, social security number, assets,income, or beneficiaries;Information about individuals' transactions with us, with our affiliates, or with others, such as policy coverage, premium,payment history, motor vehicle records; andInformation we receive from a consumer reporting agency, such as a credit history.

INFORMATION WE DISCLOSE

We do not disclose any personal information to anyone except as is necessary in order to provide our products or services to aperson, or otherwise as we are required or permitted by law.We may disclose any of the information that we collect to companies that perform marketing services on our behalf or to otherfinancial institutions with whom we have joint marketing agreements.

THE RIGHT TO VERIFY THE ACCURACY OF INFORMATION WE COLLECTKeeping information accurate and up to date is important to us. Individuals may see and correct their personal information that wecollect except for information relating to a claim or a criminal or civil proceeding.

CONFIDENTIALITYAND SECURITYWe restrict access to personal information to our employees, our affiliates' employees, or others who need to know thatinformation to service the account or in the course of conducting our normal business operations. We maintain physical, electronic,and procedural safeguards to protect personal information.

Rec. Marine


3/65



CONTACTiNGUSI f you have any questions about this privacy statement or would like to learn more about how we protect privacy, please write to usat ACE INA Customer Services, P.O. Box 1000,436 Walnut Street, WA04F, Philadelphia, PA 19106. Please include the policynumber on any correspondence with us.ACE American Insurance CompanyACE American Lloyds Irisurance CompanyACE Fire Underwriters Insurance CompanyACE Indemnity Insurance CompanyACE Insurance Company of IllinoisACE Insurance Company of OhioA


4/65



SignaturesThe only signatures applicable to this policy are those representing the company named on the fIrst page of thedeclarations.By signing and delivering the policy to you, we state that it is a valid contract when countersigned by our authorizedrepresentative.

Insurance Company of North AmericaPhiladelphia, PennsylvaniaIndemnity Insurance Company of North AmericaPhiladelphia, Pennsylvania

MA-IX0ge (05105)

~ m ACE American Insurance CompanyPhiladelphia, PennsylvaniaACE Fire Underwriters Insurance CompanyPhiladelphia, Pennsylvania


5/65

EXHIB

Page 5 o


Named Insured LONE EAGLE RESORTSnRJI. PVRTTl=: P()TNT T . ( ) n ~ F .

SCHEDULED VESSELENDORSEMENT

Policy Symbol IPolicy Number IPolicy PeriodSPC Y07954840 6/1/2007 TO 6/1/2008Issued By (Name of Insurance Company)

ACE AMERICAN INSURANCE COMPANY

IEndorsement NumberVessel 1I

Effective Date of Endorsement6/1/2007

Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of the policy.

In consideration of the "'p=.r.>=e."m""i""um=--"c"'h"'a""r'""Q.."e""d"--__________$...,1"-A,w8..,0"-'5"--__, the following is hereby added tothe coverages afforded by the present policy:Additional Insured:Address:

SUBJECT MATTER OF INSURANCEVessel Description: 2000, 27' KOFFLER, SPORT FISHERHull LD.lDocumentation Number: AK7773NVessel Name: ' PYBUS POINT l'

AMOUNT OFCOVERAGES INSURANCEProperty Damage $ 65,000Windstorm DeductibleCommercial Towing & Assistance $ 500Liability. $ 1,000,000Medical Payments $ 1,000Uninsured Boater $ 1,000,000L&HCA StatutoryTrailer $ Not CoveredPersonal Property $ 2,500Premium Bearing Endt(s): See Attached EndorsementsAPPLICABLE ENDORSEMENTS:ALL-4X07 MA-2T99 MA-7W63 MA-8301f MA-9S98

NAVIGATION WARRANTY:Refer to form: MA-7W63

ANNUALDEDUCTffiLE PREMIUM

$ 1,300 $ 919$ 2,500 $ 0$ 0 $ 0$ 0 $ 466$ 0 $ 0$ 0 $ Included$ $$ 250 $ 0$ 420

Total $ 1,805

LAY-UP WARRANTY: It is warranted that the insured vessel will be laid up GY ashore, 0 afloat fromnoon: 09/01 to noon: 06/01LOSS PAYEE:

ALL OTHER TERMS AND CONDmONS REMAIN UNCHANGED.

Authorized AgentMA-2W80f (10/06)


6/65



ace usa

An Important Notice toOur Alaska Policyholders

ALASKA DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENTDIVISION OF INSURANCEATTORNEY FEES COVERAGE NOTICE A

THIS POLICY LIMITS COVERAGE FOR ATTORNEY FEESUNDER ALASKA RULE OF CIVIL PROCEDURE 82In any suit in Alaska in which we have a right or duty to defend an insured in addition to the limits of liability, our obligation underthe applicable coverage to pay attorney fees taxable as costs against the insured is limited as follows:

Alaska Rule of Civil Procedure 82 provides that if you are held liable, some or all of the attorney fees of the person making a claimagainst you must be paid by you. The amount that must be paid by you is detennined by Alaska Rule of Civil Procedure 82. Weprovide coverage for attorney fees for which you are liable under Alaska Rule of Civil Procedure 82 subject to the followinglimitation:We will not pay that portion of any attorney's fees that is in excess of fees calculated by applying the schedule forcontested cases in Alaska Rule Civil Procedure 82(b )(1) to the limit of liability of the applicable coverage.

This limitation means the potential costs that may be awarded against you as attorney fees may not be covered in full. You willhave to pay any attorney fees not covered directly.For example, the attorney fees provided by the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) are:

20% of the first $25,000 of a judgment;10% of the amounts over $25,000 of ajudgment.Therefore, if a court awards ajudgment against you in the amount of $125,000, in addition to that amount you would be liable underAlaska Rule of Civil Procedure 82(b)(1) for attorney fees of $15,000, calculated as follows:

Total Award20% of $25,00010% of $100,000

$125,000$5,000$10,000

Total Attorney Fees $15,000I f the limit of liability of the applicable coverage is $100,000, we would pay $100,000 of the $125,000 award, and $12,500 for AlaskaRule of Civil Procedure 82(b)(1) attorney fees, as calculated as follows:

Total Limit of Liability20% of $25,00010% of $75,000

$100,000$5,000$7,500

Total Attorney Fees Covered $12,500You would be liable to pay, directly and without our assistance, the remaining $25,000 in liability plus the remaining $2,500 forattorney fees under Alaska Rule of Civil Procedure 82 not covered by this policy.

ALL-4X07 (7/96)


7/65

EXHIB

Page 7 o


ALASKA MANDATORY ENDORSEMENT

Named Insured LONE EAGLE RESORTSn'RlI. PV1'ITI!=l pnTN"I ' T.nnr.:F.Policy Symbol IPolicy Number IPolicy Period

SPC Y07954840 6 /1 /2007 TO 6/1/2008Issued By (Name of Insurance Company)ACE AMERICAN INSURANCE COMPANY

IEndorsement NumberVessel 1IEffective Date of Endorsement6/1/2007

Insert the policy number. The remainder of the infonnation is to be completed only when this endorsement is issued subsequent to the preparation of the policy.

THIS ENDORSEMENT LIMITS COVERAGE FOR ATTORNEY FEES UNDER ALASKA RULE OF CIVILPROCEDURE 82. PLEASE READ IT CAREFULLY.

In consideration of the premium paid, the section 'CLAIM OR SUIT AGAINST YOU' under 'GENERAL PROVISIONS INmE EVENT OF LOSS' is deleted, and replaced by the following.

CLAIM OR SUIT AGAINST YOU: I f a claim is made or suit is brought against you for liability that may be covered underthis policy, you must immediately notify us and send us every demand, notice, summons or other legal papers received by youor your representative. We will pay the ensuing cost of the suit. We will also have the option of naming attorneys to representyou. Payments for the cost of your legal defense will be in addition to payments we make under your coverage for liabilityclaims against you. .In any suit we defend in Alaska, we will not pay that portion of the attorney's fees awarded as costs that is in excess of theamount calculated by applying the schedule of attorney's fees for contested cases contained in Alaska Rule of Civil Procedure82(b)(1) to the limit of liability of the applicable coverage.

ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.

Authorized Agent

MA-2T99 ('ll97) Ptd. in U.S.A.


8/65

EXHIB

Page 8 o


ALASKA NAVIGATION WARRANTY

Named Insured LONE EAGLE RESORTSDBAPYBUS POINT. T.nnQlO! IEndorsement NumberVesse l 1Policy Symbol 1Policy Number IPolicy Period

SP C Y07954840 6L1L2007 TO 6 / 1 / 2008 IEffective Date of Endorsement6 /1 / 2007Issued By (Name of Insurance Company)

ACE AMERICAN INSURANCE COMPANYInsert the policy number. The remainder of the infonnation is to be completed only when this endorsement is issued subsequent to the preparation of the policy.

Warranted confined to the waters of the Gulf of Alaska and the inside waters of southeastAlaska, all not west of Cape Spencer nor south of 54.5 degrees north latitude, and not morethan 25 miles offshore.


MA-7W63 (6/96) Ptd. in U.S.A.


9/65

EXHIB

Page 9 o


Named InsuredPolicy Symbol

SPC

CAPTAIN AND CREW LIMITAnONENDORSEMENTLONE EAGLE RESORTSDBA PYBUS POTlITT T.onr.lF.

IPolicy Number IPolicy PeriodY07954840 6/1/2007 TO 6/1/2008Issued By (Name of Insurance Company)




Insert the policy number. The remainder of the informatioa is to be completed only when this endorsement is issued subsequent to the preparation of the policy.

In consideration of the additional premium of $ 420 , it is warranted that there shaH not be more than ( 1 ) crewmember(s), including the captain, employed aboard the vessel at anyone time. 'The maximum limit of liability for coverageapplicable to the Jones Act or under general Maritime Law, per each accident or occurrence is $1 , 000, 000

It is further understood and agreed that in the event additional crew are to be employed, the Insured shaH give prior notice tothis Company and pay such additional premium as is required. If the Insured shaH fail to give such prior notice and at thetime of loss in respects to crew there is a greater number employed than that which is stated above, the insurance shallrespond only in the proportion that the stated number of crew bears to the number on board at the time of the accident.

Notwithstanding the aforementioned, the Company's maximum limit ofliability under PART B: Liability Coverage shaH notexceed the amount of insurance shown for Liability Coverage on the Declarations Page or endorsements attached thereto.


Authorized Agent

MA-8301f (12103) Ptd. in U.S.A.


10/65

EXHIB

Page 10 o


CHARTER VESSEL PASSENGER WARRANTY

Named Insured LONE EAGLE RESORTSDBA p V R m ~ PO-rNT. LeDGE

Policy Symbol IPolicy Number Policy PeriodSPC Y07954840 6/1/2007 TO 6/1/2008Issued By (Name of Insurance Company)


IEndorsement NumberVesse l 1I


Insert the policy number. The remainder of the informalion is t"be compleled only when this endorsement is issued subsequenl 10 the preparalion Of Ibe policy.

In consideration of the premium paid, the insured warrants that the number of passengers shallnot exceed 6

MA-9S98 (11196) Ptd. in U.S.A.

ALL OTHER TERMS AND CONDITIONS REMAINUNCHANGED

Authorized Agent


11/65

EXHIB

Page 11 o


Named Insured LONE EAGLE RESORTSDBA PYBUS POINT LODGE


Policy Symbol IPolicy Number IPolicy PeriodSPC LY07954840 6/1/2007 TO 6[1/2008Issued By (Name of Insurance Company)



Effecti ve Date of Endorsement6L1/2007'

Insert the policy number. The remainder of Ihe information is to be completed only when this endorsemenl is issued subsequent to the preparation of the policy.

In consideration of thep! : : = - r - = e m : 2 ! . : ! : i " " u m ~ . . : = c h ~ a ~ r ~ g l - > e " " d , , - - -__________ $ , - = 1 ~ ' w 6 ! . : : 3 ! . : : 3 , - -__" the following is hereby added tothe coverages afforded by the present policy:Additional Insured:Address:

SUBJECT MATTER OF INSURANCEVessel Description: 2001, 27' KOFFLER, SPORTFISHERHull LD.lDocumentation Number: AK9592NVessel Name: ' PYBUS POINT 2 '

AMOUNT OFCOVERAGES INSURANCEProperty Damage $ 70,000Windstorm DeductibleCommercial Towing & Assistance $ 500Liability $ 1,000,000Medical Payments $ 1,000Uninsured Boater $ 1,000,000L&HCA StatutoryTrailer $ Not CoveredPersonal Property $ 2,500Premium Bearing Endt(s): See Attached EndorsementsAPPLICABLE ENDORSEMENTS:ALL-4X07 MA-2T99 MA-7W63 MA-8301f MA-9S98


ANNUALDEDUCTIBLE PREMIUM$ 1,400 $ 747$ 2,500 $ 0$ 0 $ 0$ 0 $ 466$ 0 $ 0$ 0 $ 0Included$ $$ 250 $ 0$ 420

Total $ 1,633

LAY-UP WARRANTY: It is warranted that the insured vessel will be laid up (i ) ashore, 0 afloat fromnoon: 09/01 to noon: 06/01LOSS PAYEE:


Authorized AgentMA-2W80f (10/06)


12/65



ace usaAn Important Notice to

Our Alaska PolicyholdersALASKA DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENTDIVISION OF INSURANCE

ATTORNEY FEES COVERAGE NOTICE ATHIS POLICY LIlVllTS COVERAGE FOR ATTORNEY FEESUNDER ALASKA RULE OF CIVIL PROCEDURE 82

In any suit in Alaska in which we have a right or duty to defend an insured in addition to the limits of liability, our obligation underthe applicable coverage to pay attorney fees taxable as costs against the insured is limited as follows:

Alaska Rule of Civil Procedure 82 provides that if you are held liable, some or all of the attorney fees of the person making a claimagainst you must be paid by you. The amount that must be paid by you is determined by Alaska Rule of Civil Procedure 82. Weprovide coverage for attorney fees for which you are liable under Alaska Rule of Civil Procedure 82 subject to the followinglimitation:We will not pay that portion of any attorney's fees that is in excess of fees calculated by applying the schedule forcontested cases in Alaska Rule Civil Procedure 82(b)(1) to the limit of liability of the applicable coverage.

This limitation means the potential costs that may be awarded against you as attorney fees may not be covered in fulL You willhave to pay any attorney fees not covered directly.For example, the attorney fees provided by the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) are:

20% of the first $25,000 of a judgment;10% of the amounts over $25,000 of a judgment.Therefore, if a court awards a judgment against you in the amount of $125,000, in addition to that amount you would be liable underAlaska Rule of Civil Procedure 82(b)(I ) for attorney fees of $15,000, calculated as follows:

Total Award20% of $25,00010% of $100,000

$125,000$5,000$10,000

Total Attorney Fees $15,000If the limit ofliability of the applicable coverage is $100,000, we would pay $100,000 of the $125,000 award, and $12,500 for AlaskaRule of Civil Procedure 82(b)(1) attorney fees, as calculated as follows:


$100,000$5,000$7.500


ALL-4X07 (7196)


13/65

EXHIB

Page 13 o


ALASKA MANDATORY ENDORSEMENTNamed Insured LONE EAGLE RESORTS

nBA PYBTT!'I POTN'T' T.onr.RPolicy Symbol IPolicy Number IPolicy Period

SPC Y07954840 6/1/2007 TO 6/1/2008Issued By (Name of Insurance Company)ACE AMERICAN INSURANCE COMPANY



Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent 10 the preparation of the policy.


In consideration of the premium paid, the section 'CLAIM OR SUIT AGAINST YOU' under 'GENERAL PROVISIONS INTHE EVENT OF LOSS' is deleted, and replaced by the following.

CLAIM OR SUIT AGAINST YOU: If a claim is made or suit is brought against you for liability that may be covered underthis policy, you must immediately notify us and send us every demand, notice, summons or other legal papers received by youor your representative. We will pay the ensuing cost of the suit. We will also have the option of naming attorneys to representyou. Payments for the cost of your legal defense will be in addition to payments we make under your coverage for liabilityclaims against you.In any suit we defend in Alaska, we will not pay that portion of the attorney's fees awarded as costs that is in excess of theamount calculated by applying the schedule of attorney's fees for contested cases contained in Alaska Rule of Civil Procedure82(b)(1) to the limit ofliability of the applicable coverage.


Authonzed Agent

MA-2T99 (2197) Ptd. in U.S.A.


14/65

EXHIB

Page 14 o


ALASKA NAVIGATION WARRANTYNamed Insured LONE EAGLE RESORTS

DBA. PYBUS POINT r ~ O D G E IEndorsemenr NumberVessel 2Policy Symbol IPolicy Number IPolicy PeriodSPC Y07954840 6/1/2007 TO 6/1/2008 I

Effective Date of Endorsement6/1/2007Issued By (Name of Insurance Company)

ACE AMERICAN INSURANCE COMPANYInsert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of the policy.


AL L OTHER TERMS AND CONDITIONS REM AIN UNCHANGED.

Authorized Agent

MA-7W63 (6/96) Ptd. in U.S.A.


15/65

EXHIB

Page 15 o


Named Insured

CAPTAIN AND CREW LIMITATIONENDORSEMENTLONE EAGLE RESORTSniH\. pVFlnJ:: POTN'I ' T.onr.:F.Policy Symbol IPolicy Number IPolicy Period



Effective Date of Endorsement6/1/2007 .


In consideration of the additional premium of $ 420 , it is warranted that there shan not be more than ( 1 ) crewmember(s), including the captain, employed aboard the vessel at anyone time. The maximum limit of liability for coverageapplicable to the Jones Act or under general Maritime Law, per each accident or occurrence is $1, 000,000

It is further understood and agreed that in the event additional crew are to be employed, the Insured shall give prior notice tothis Company and pay such additional premium as is required. I f the Insured shall fail to give such prior notice and at thetime of loss in respects to crew there is a greater number employed than that which is stated above, the insurance shallrespond only in the proportion that the stated number of crew bears to the number on board at the time of the accident.

Notwithstanding the aforementioned, the Company's maximum limit ofliability under PART B: Liability Coverage shall notexceed the amount of insurance shown for Liability Coverage on the Declarations Page or endorsements attached thereto.

ALL OTIIER TERMS AND CONDmONS REMAIN UNCHANGED.

Authonzed Agent

MA-8301f (12103) Ptd. in U.S.A.


16/65

EXHIB

Page 16 o


CHARTER VESSEL PASSENGER WARRANTYNamed Insured LONE EAGLE RESORTSDBA PYBUS POINT T.nnaRPolicy Symbol lpOliCY Number IPolicy Period






MA-9S98 (11/96) Ptd. in U.S.A.

ALL OTHER TERMS ANI) CONDITIONS REMAINUNCHANGED

Authorized Agent


17/65

EXHIB

Page 17 o






1Endorsement NumberI Vessel 3I



In consideration of the I : ' p C ! : r - " , e " " m " " i " , w n ~ . . : : : c ~ h ~ a ~ r : . ! : g L : 5 e ~ d " - -__________ $ . ~ 1 ! : . J ' w 6 o L : : 3 ! . . : : 3 ! . . - _ - " the following is hereby added tothe coverages afforded by the present policy:Additional Insured:Address:

SUBJECT MATTER OF INSURANCEVessel Description: 2001, 27' KOFFLER, SPORTFISHERHull LD.lDocumentation Number: AK8003PVessel Name: ' PYBUS POINT 3 '

AMOUNT OFCOVERAGES INSURANCEProperty Damage $ 70,000Windstorm DeductibleCommercial Towing & Assistance $ 500Liability $ 1,000,000Medical Payments $ 1,000Uninsured Boater $ 1,000,000L&HCA StatutoryTrailer $ Not CoveredPersonal Property $ 2,500Premium Bearing Endt(s): See Attached EndorsementsAPPLICABLE ENDORSEMENTS:ALL-4X07 MA-2T99 MA-7W63 MA-8301f MA-9S98


ANNUALDEDUCTffiLE PREMIUM

$ 1,400 $ 747$ 2,500 $ 0$ 0 $ 0$ 0 $ 466$ 0 $ 0$ 0 $ 0Included$ $$ 25 0 $ 0$ 420

Total $ 1,633

LAY-UP WARRANTY: It is warranted that the insured vessel will be laid up ashore, 0 afloat fromnoon: 09/01 to noon: 06/01LOSS PAYEE:

ALL OTHER 'TERMS AND CONDmONS REMAIN UNCHANGED.

Authorized AgentMA-2W80f(10/06)


18/65



ace usa



THIS POLICY LIMITS COVERAGE FOR ATTORNEY FEESUNDER ALASKA RULE OF 'CIVIL PROCEDURE 82In any suit in Alaska in which we have a right or duty to defend an insured in addition to the limits of liability, our obligation underthe applicable coverage to pay attorney fees taxable as costs against the insured is limited as follows:

Alaska Rule of Civil Procedure 82 provides that if you are held liable, some or all of the attorney fees of the person making a claimagainst you must be paid by you. The amount that must be paid by you is determined by Alaska Rule of Civil Procedure 82. Weprovide coverage for attorney fees for which you are liable under Alaska Rule of Civil Procedure 82 subject to the followinglimitation:

We will not pay that portion of any attorney's fees that is in excess of fees calculated by applying the schedule forcontested cases in Alaska Rule Civil Procedure 82(b)(1) to the limit of liability of the applicable coverage.This limitation means the potential costs that may be awarded against you as attorney fees may not be covered in fuU. You wiuhave to pay any attorney fees not covered directly.For example, the attorney fees provided by the schedule for contested cases in Alaska Rule of Ci vii Procedure 82(b)( 1) are:

20% of the first $25,000 of a judgment;10% of the amounts over $25,000 of a judgment.Therefore, if a court awards ajudgment against you in the amount of $125,000, in addition to that amount you would be liable underAlaska Rule of Civil Procedure 82(b)(1) for attorney fees of $15,000, calculated as follows:

Total Award

20% of $25,00010% of $100,000$125,000

$5,000$10,000Total Attorney Fees $15,000

If the limit of liability of the applicable coverage is $100,000, we would pay $100,000 of the $125,000 award, and $12,500 for AlaskaRule of Civil Procedure 82(b )(1) attorney fees, as calculated as follows:

Total Limit o f Liability

20% of $25,00010% of $75,000$100,000

$5,000$7,500

Total Attorney Fees Covered $12,500You would be liable to pay, directly and without our assistance, the remaining $25,000 in liability plus the remaining $2,500 forattorney fees under Alaska Rule of Ci vil Procedure 82 not covered by this policy.

ALL4X07 (7/96)


19/65

EXHIB

Page 19 o


ALASKA MANDATORY ENDORSEMENTNamed InsuredPolicy Symbol

SPC

LONE EAGLE RESORTSnl'lZt. pVl ' ln l ' l pnTN'T' T.nnr.R

IPolicy Number IPolicy Period

. Y07954840 6/1/2007Issued By (Name of Insurance Company)ACE AMERICAN INSURANCE COMPANY

TO 6/1/2008IEndorsement NumberVessel 3

IEffective Date of Endorsement6/1/2007

Insert the policy number. The remainder of lIle information is [0 be comple[ed only when Ibis endorsement is issued subsequent [0 the preparation of the policy.

THIS ENDORSEMENT LIMITS COVERAGE FOR ATTORNEY FEES UNDER ALASKA RULEOF CIVILPROCEDURE 82. PLEASE READ IT CAREFULLY.

In consideration of the premium paid, the section 'CLAIM OR SUIT AGAINST YOU' under 'GENERAL PROVISIONS INTIlE EVENT OF LOSS' is deleted, and replaced by the following.

CLAIM OR SUIT AGAINST YOU: If a daim is made or suit is brought against you for liability that may be covered underthis policy, you must immediately notify us and send us every demand. notice. summons or otherlegal papers received by you.or your representative. We will pay the ensuing cost of the suit. We will also have the option of naming attorneys to representyou. Payments for the cost of your legal defense will be in addition to payments we make under your coverage for liabilityclaims against you.In any suit we defend in Alaska, we will not pay that portion of the attorney's fees awarded as costs that is in excess of theamount calculated by applying the schedule of attorney' s f ~ e s for contested cases contained in Alaska Rule of Civil Procedure82(b)(1) to the limit ofliability of the applicable coverage.


Authorized Agent

MA-2T99 (2197) Ptd. in U.S.A.


20/65

EXHIB

Page 20 o


Named Insured


LONE EAGLE RESORTSDBA PYBUS POINT T.onr.:F. /Endorsement NumberVesse l 3Policy Symbol

SPC IPolicy Number IPolicy PeriodY07954840 6/1/2007 TO 6/1/2008 I

Effective Date of Endorsement6/1/2007Issued By (Name of Insurance Company)

ACE AMERICAN INSURANCE COMPANYInsert Ibe policy number. The remainder of Ibe information is to be completed only when Ibis endorsement is issued subsequent to the preparation of the policy.



Authorized Agent

MA-7W63 (6/96) Ptd. in U.S.A.


21/65

EXHIB

Page 21 o


CAPTAIN AN D CREW LIMITATIONENDORSEMENTNamed Insured LONE EAGLE RESORTS~ 'PVRTTl'I P O I N ~ T.nnllF.Policy Symbol IPolicy Number IPolicy Period

SPC Y07954840 6/1L2007 TO 6/1/2008Issued By (Name ofInsurance Company)ACE AMERICAN INSURANCE COMPANY

/Endorsement NumberVessel 3

IEffective Date of Endorsement6 /1 /2007


In consideration of the additional premium of $ 42 0 , it is warranted that there shall not be more than ( 1 ) crewmember(s), including the captain, employed aboard the vessel at anyone time. The maximum limit of liability for coverageapplicable to the Jones Act or under general Maritime Law, per each accident or occurrence is $1, 000, 000

It is further understood and agreed that in the event additional crew are to be employed, the Insured shall give prior notice tothis Company and pay such additional premium as is required. I f the Insured shall fail to give such prior notice and at thetime of loss in respects to crew there is a greater number employed than that which is stated above, the insurance shallrespond only in the proportion that the stated number of crew bears to the number on board at the time of the accident.

Notwithstanding the aforementioned, the Company 's maximum limit ofliability under PART B: Liability Coverage shall notexceed the amount of insurance shown for Liability Coverage on the Declarations Page or endorsements attached thereto.


Authorized Agent

MA-8301f (12/03) Ptd. in U.S.A.


22/65

EXHIB

Page 22 o



Named Insured LONE EAGLE RESORTSnRlI. PVRTT!=I POTN'l ' T,OnaF.

Policy Symbol IPolicy Number IPolicy PeriodSPC Y07954840 6/1/2007 TO 6/1/2008Issued By (Name ofinsuranceCompany)



Effective Date of Endorsement6 /1 /2007

Insen the policy number. The remainder of tbe information is to be completed only when this endorsement is issued subsequent to the preparation of the policy.


MA-9S98 (11196) Ptd. in U.S.A.


Authorized Agent


23/65

EXHIB

Page 23 o


Named Insured LONE EAGLE RESORTSnRJl PYBUl'; POTNT r . o n ~ J i ' !






Insert the policy number. The remainder of the information is 10 be compleled only when Ihis endorsemenl is issued subsequenllo the preparation oflhe policy.

In consideration of the I: 6 ~ 4 . . . . , 4 " - - __" the following is hereby added tothe coverages afforded by the present policy:Additional Insured:Address:

SUBJECT MATTER OF INSURANCEVessel Description: 2002, 30' KOFFLER, SPORTFISHERHull LD.IDocumentation Number: AK1255PVessel Name: ' PYBUS POINT 4 '

AMOUNT OFCOVERAGES INSURANCEProperty Damage $ 75,000Windstorm DeductibleCommercial Towing & Assistance $ 500Liability $ 1,000,000Medical Payments $ 1,000Uninsured Boater $ 1,000,000L&HCA StatutoryTrailer $ No t CoveredPersonal Property $ 2,500Premium Bearing Endt(s): See Attached EndorsementsAPPLICABLE ENDORSEMENTS:ALL-4X07 MA-2T99 MA-2W74 MA-8301f MA-9S98


ANNUALDEDUCTIBLE PREMIUM

$ 1,500 $ 702$ 2,500 $ 0$ 0 $ 0$ 0 $ 522$ 0 $ 0$ 0 $ 0Included$ $$ 250 $ 0$ 42 0

Total $ 1,644

LAY-UP WARRANTY: It is warranted that the insured vessel will be laid up


24/65



ace usa




Alaska Rule of Civil Procedure 82 provides that if you are held liable, some or all of the attorney fees of the person making a claimagainst you must be paid by you. The amount that must be paid by you is determined by Alaska Rule of Civil Procedure 82. Weprovide coverage for attorney fees for which you are liable under Alaska Rule of Civil Procedure 82 subject to the followinglimitation:We will not pay that portion of any attorney's fees that is in excess of fees calculated by applying the schedu1e forcontested cases in Alaska Rule Civil Procedure 82(b )(1) to the limit of liability of the applicable coverage.

This limitation means the potential costs that may be awarded against you as attorney fees may not be covered in full. You willhave to pay any attorney fees not covered directly.Fo r example, the attorney fees provided by the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)(1) are:

20% of the first $25,000 of a judgment;10% of the amounts over $25,000 of a judgment.Therefore, if a court awards a judgment against you in the amount of $125,000, in addition to that amount you would be liable underAlaska Rule of Civil Procedure 82(b)(I) for attorney fees of $15,000, calculated as follows:

Total Award20% of $25,00010% of $100,000

$125,000$5,000$10,000

Total Attorney Fees $15,000I f the limit of liability of the applicable coverage i s $100,000, we would pay $100,000 of the $125,000 award, and $12,500 for AlaskaRule of Civil Procedure 82(b)(1) attorney fees, as calculated as follows:


$100,000$5,000$7,500


ALL4X07 (7/96)


25/65

EXHIB

Page 25 o


ALASKA MANDATORY ENDORSEMENTNamed Insured LONE EAGLE RESORTSDBA PYBUS POINT LODGEPolicy Symbol IPolicy Number IPolicy Period







CLAIM OR SUIT AGAINST YOU: If a claim is made or suit is brought against you for liability that may be covered underthis policy, you must immediately notify us and send us every demand, notice, summons or other legal papers received by youor your representative. We will pay the ensuing cost of the suit. We will also have the option of naming attorneys to representyou. Payments for the cost of your legal defense will be in addition to payments we make under your coverage for liabilityclaims against you.In any suit we defend in Alaska, we will not pay that portion of the attorney's fees awarded as costs that is in excess of theamount calculated by applying the schedule of attorney's fees for contested cases contained in Alaska Rule of Civil Procedure82(b)(l) to the limit ofIiability of the applicable coverage.


Authorized Agent

MA-2T99 (7197) Ptd. in U.S.A.


26/65

EXHIB

Page 26 o


PORT RISK WARRANTYNamed Insured LONE EAGLE RESORTS IEndorsement NumberVesse l 4nRlI. l)VRTT!": POINT_ T.nnr.!F.Policy Symbol IPolicy Number IPolicy Period

SPC Y07954840 6/1/2007 TO 6/1/2008 IEffective Date of Endorsement6/1/2007Issued By (Name of Insurance Company)

ACE AMERICAN INSURANCE COMPANYInsert Ihe policy number. The remainder of the information is to be completed only when Ihis endorsement is issued subsequent to Ihe preparation of Ihe policy.

In consideration of the premium charged, the following limits on use shall apply:(i ) Warranted insured yacht confined to port, located at Auke Bay Boat Harbor , ashore , , in

oJuneau, AK Navigation is notpermitted.Warranted insured yacht is confined to port, located at ______________ ~ _________________________, in______________________________________________________________________ , however, for thepurpose of vessel demonstration, service or maintenance, navigation is granted within a mile radius of______________________________________________________________________,. It is further warrantedthat navigation of the vessel for the above purposes shall be conducted by the insured or a licensed captain.


Authorized Agent

MA2W74 (4/95)


27/65

EXHIB

Page 27 o


Named Insured

CAPTAIN AND CREW LIMITATIONENDORSEMENTLONE EAGLE RESORTS_DBA PYBUS POINT LODGEPolicy Symbol 1Policy Number IPolicy Period

SPC Y0795484o- 6 /1 /2007 TO 6 /1 /2008 'Issued By (Name of Insurance Company)ACE AMERICAN INSURANCE COMPANY



Insert the policy number. The remainder of the infomJation is io be completed only when this endorsemenl is issued subsequent 10 the preparation of the policy.

In consideration of the additional premium of $ 420 ,i t is warranted that there shall not be more than ( 1 ) crewmember(s), including the captain, employed aboard the vessel at anyone time. The maximum limit of liability for coverageapplicable to the Jones Act or under general Maritime Law, per each accident or occurrence is $1 000 000

It is further understood and agreed that in the event additional crew are to be employed, the Insured shall give prior notice tothis Company and pay such additional premium as is required. If the Insured shall fail to give such prior notice and at thetime of loss in respects to crew there is a greater number employed than that which is stated above, the insurance shallrespond only in the proportion that the stated number of crew bears to the number on board at the time of the accident.


ALL OTHER lERMS AND CONDITIONS REMAIN UNCHANGED.

Authonzed Agent

MA-830Jf (12103) Ptd. in U.S.A.


28/65

EXHIB

Page 28 o


CHARTER VESSEL PASSENGER WA.RRANTY

Named Insured LONE EAGLE RESORTSn ~ 1 I . P V ~ T T ~ POTNT T.onaF.Policy Symbol IPolicy Number IPolicy Period

SPC Y07954840 6/1/2007 TO 6/1/2008Issued By (Name of Insurance Company)ACE AMERICAN INSURANCE COMPANY.


Effective Date of Endorsement6 /1 /2007

Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent 10 the preparation of the policy.


MA-9S98 (11196) Ptd. in U.S.A.


uthorized Agent


29/65

EXHIB

Page 29 o








Insert Ibe policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to Ibc preparation of Ibe policy.

In consideration of the ! : < p : . = r . . : ! : e m ~ i ~ i . . u n ~ - " c < " h . , . a " " r ~ g " " , e " - , d , , , - - __________ $,-=1,,-,,,-,7wO>!.


30/65



ace usa




Alaska Rule of Civil Procedure 82 provides that if you are held liable, some or all of the attorney fees of the person making a claimagainst you must be paid by you. The amount that must be paid by you is determined by Alaska Rule of Civil Procedure 82. Weprovide coverage for attorney fees for which you are liable under Alaska Rule of Civil Procedure 82 subject to the followinglimitation:

We will no t pay that portion of any attorney's fees that is in excess of fees calculated by applying the schedule forcontested cases in Alaska Rule Civil Procedure 82(b )(1) to the limit of liability of the applicable coverage.This limitation means the potential costs tha t may be awarded against you as attorney fees may not be covered in full. You willIw.ve to pay any attorney fees not covered directly.For example, the attorney fees provided by the schedule for contested cases in Alaska Rule of Civil Procedure 82(b)( I) are:

20% of the first $25,000 of a judgment;10% of the amounts over $25,000 of a judgment.

Therefore, if a court awards a judgment against you in the amount of $125,000, in addition to that amo unt you would be liable underAlaska Rule of Civil Procedure 82(b)(1) for attorney fees of $15,000, calculated as follows:

Total Award

20% of $25,00010% of $100,000$125,000

$5,000$10,000

Total Attorney Fees $15,000If the limit of liability of the applicable coverage is $100,000, we would pay $100,000 of the $125,000 award, and $12,500 for AlaskaRule of Civil Procedure 82(b)(l} attorney fees, as calculated as follows:


$100,000

$5,000$7,500


ALL-4X07 (7/96)


31/65

EXHIB

Page 31 o


ALASKA MANDATORYENDORSEMENT

Named Insured LONE EAGLE RESORTSDRll PVRTTI=: POTNT T.011r.1'1

Policy Symbol \ Policy Number \ Policy PeriodSPC Y07954840 6/1/2007 TO 6/1/2008Issued By (Name of Insurance Company)


IEndorsement NumberVessel 5\Effecti ve Date of Endorsement6/1/2007

Insert the policy number. The remainder of the information is to be completed only when this endorsement is issued subsequent to the preparation of Ibe policy.



CLAIM OR SUIT AGAINST YOU: If a claim is made or suit is brought against you for liability that may be covered underthis policy, you must immediately notify us and send us every demand, notice, summons or other legal papers received by youor your representative. We will pay the ensuing cost of the suit. We will aiso have the option of naming attorneys to representyou. Payments for the cost of your legal defense will be in addition to payments we make under your coverage for liabilityclaims against you.In any suit we defend in Alaska, we will not pay that portion of the attorney's fees awarded as costs that is in excess of theamount calculated by applying the schedule of attorney's fees for contested cases contained in Alaska Rule of Civil Procedure82(b)(1) to the limit of liability of the applicable coverage.


Authorized Agent

MA-2T99 (2197) Ptd. in U.S.A.


32/65

EXHIB

Page 32 o



Named Insured LONE EAGLE RESORTSnBA. P V R T T ~ POTN'T' T . o n ( . n ~ IEndorsement NumberVesse l 5Policy Symbol IPolicy Number IPolicy Period

SPC Y07954840 6/1/2007 TO 6/1/2008 IEffective Date of Endorsement6/1/2007Issued By (Name of Insurance Company)

ACE AMERICAN INSURANCE COMPANYInsert the policy number. The remainder of the informatioD is to be completed only when this endorsement is issued subsequent to the preparation of the policy.



Authorized Agent

MA-7W63 (6196) Ptd. in U.S.A.


33/65

EXHIB

Page 33 o


Named Insured

CAPTAIN AND CREW LIMITATIONENDORSEMENTLONE EAGLE RESORTSnRJl.. PYRTTl=l POTlIl'T' T . o n ( . l ~



IEndolSement NumberVessel 5IEffective Date of EndolSement6/1/2007Insert the policy number. The remainder of the infonnation is to be completed only when this endorsement is issued subsequent to the preparation of the pclicy.

In consideration of the additional premium of $ 420 . it is warranted that there shaH not be more than ( 1 ) crewmember(s), induding the captain, employed aboard the vessel at anyone time. The maximum limit of liability for coverageapplicable to the Jones Act or under general Maritime Law, per each accident or occurrence is $1,000,000

It is further understood and agreed that in the event additional crew are to be employed, the Insured shall give prior notice tothis Company and pay such a d d i t i ~ ) l l a l premium as is required. I f the Insured shall fail to give such prior notice and at thetime of loss in respects to crew there is a greater number employed than that which is stated above, the insurance shallrespond only in the proportion that the stated number of crew bears to the number on board at the time of the accident.


ALL OTHER 1ERMS AND CONDmONS REMAIN UNCHANGED.

~ g e n t MA-8301f (12/03) Ptd. in U.S.A.


34/65

EXHIB

Page 34 o



Named InsuredPolicy Symbol

SPC

LONE EAGLE RESORTSDBA PYBUS POTN'I' T.onr.:R

IPolicy Number IPolicy PeriodY07954840 6/1/2007Issued By (Name of Insurance Company)ACE AMERICAN INSURANCE COMPANY

TO 6/1/2008

1Endorsement NumberVessel 5IEffective Date of Endorsement6/1/2007

Insert the policy number. The remainder of the information is 10 be compleled only when this endo.-.emenl is issued subsequenllO the preparation of the policy.


MA-9S98 (11/96) Ptd. in U.S.A.

ALL OTHER TERMS AN D CONDITIONS REMAINUNCHANGED

Authorized Agent


35/65



INAMARGDRecreational Marine Insuranceone of the ACE Group of Companies


36/65

EXHIB

Page 36 o


CHARTER POLICYQUICK REFERENCEDECLARATIONS PAGE Your Name and Address........................... 1 Your Insured Property............................... 1 Policy Period................... ......... ............... 1 Coverages. ........................... ........ .......... 1 Amounts of Insurance.............................. 1 Deductible..... ..................... .................... 1 Lay-Up Warranty..................................... 1 Limits on Use..... ...... ............................... 1 Loss Payee........ .............. .................. ..... 1AGREEMENT AND DEFINITIONS Agreement... ............ .............................. 3 Definitions.. ......... ................................... 3PART A:PROPERTY DAMAGE COVERAGE Perils Insured Against............................... 4 Overland Transport............................. ..... 4 Exclusions..... ..................... ......... ........... 4 Equipment on Shore..................... ...... ...... 4 Deductible Amount.... ...... ........ .......... ...... 4 Loss Settlement.......... ............ ...... .......... 4 Property Subject to Depreciation................ 5 Salvage Charges... ...... ........... ............ ..... 5 Commercial Towing and Assistance........... 5PARTB:LIABILITY COVERAGE Perils Insured Against.............................. 5 Exclusions.............................................. 5 Limits of Liability..................................... 6PART C:MEDICAL PAYMENTS COVERAGE Perils Insured Against............................... 6 Exclusions.................................... .......... 6 Loss Settlement................ .......... ........ .... 6 Medical Payments Proof-of-Loss................ 6 Additional Requirements........................... 6 Admission of Liability.... ........................... 6PARTD:UNINSURED BOATER COVERAGE Perils Insured Against....... ........................ 7 Exclusions.................................... .......... 7 Loss Settlement...................................... 7PART E:FEDERAL LONGSHOREMEN'S ANDHARBOR WORKERS'COMPENSATION INSURANCE .................. 7

PARTF:V E S S E L T R ~ L E R C O V E R A G E Perils Insured Against............................... 7 Exclusions................................. ............. 7 Deductible Amount.................................. 7 Loss Settlement.... ....... .............. ............. 8PARTG:PERSONAL PROPERTY COVERAGE Property Covered..................................... 8 Fishing Equipment Stored Ashore.............. 8 Exclusions. ............. ................................ 8 Mysterious Disappearance........................ 8 Causes of Loss Which Are Covered............ 8 Deductible.............................................. 8 Loss Settlement...................................... 8GENERAL CONDITIONS AND EXCLUSIONS Policy Period........................................... 8 Extension of Coverage.............................. 9 Non-owned VesseL................................ 9 Racing.................................................... 9 Broadening Coverage............ .................... 9 Policy Premium and Renewal. ................ ..... 9 Changes in Policy..................................... 9 Conformity to State Law............................ 9 Cancelling the Policy................................. 9 Return Premiums...................................... 9 Use of Vessel.... ......... ............................. 9 Captain Warranty..................................... 9 Passenger Warranty................................. 9 Firearms Exclusion.................................. 10 Navigation Warranty................................ 10 Lay-Up Warranty..................................... 10 Seaworthiness Warranty.......................... 10 Loss-of-Use Exclusion.............................. 10 Transfer of Interest................................. 10 Concealment, Misrepresentation or Fraud... 10 Dishonest, Illegal or Intentional Acts.......... 10 No Benefits to Others... .................. ......... 10 War, Confiscation and RadioactiveContamination........................................ 10GENERAL PROVISIONS INTHE EVENT OF LOSS Protection Against Loss ......................... .. Abandonment. ...................................... . Notice of Loss ....................................... . Proof-of-Loss ........................................ . Claim of Suit Against you ....................... . Assistance and Cooperation .................... . Payment of Loss ................................... .. Our Right to Recover .............................. . Salvage ................................................ . Suit Against Us ..................................... . Other Insurance ......................................

1011111111111111111212

4


37/65



DECLARATIONS PAGE(Attach Here)

This is not a complete and valid insurance policy withoutan accompanying Declarations Page.


38/65



CHARTER POLICYAGREEMENT AND DEFINITIONSAGREEMENTThis is a legal contract between you and us. We will provide the insurance coverage described in thispolicy in return for the premium and the compliance by all covered persons with all applicable provisions ofthis policy.DEFINITIONSThroughout this policy, you and your refer to the named insured as shown in the Declarations Page, andwe, us and our refer to the company providing this Insurance. In addition, certain words and phrasesare defined as follows:Insured Property is defined as:a. the vessel(s) shown on the Declarations Page, including spars, sails, machinery, furniture, dinghies,outboard motors, fittings and other equipment normally required for the operation or maintenance of thevessel; moorings and cradles are excluded;b. any vessel that you acquire ownership of during the Policy Period, however, you must notify us within15 days of the time you acquire the vessel and pay any additional premium required; in the event ofloss during this period, we will pay no more than its cost to you, or $50,000, whichever is less.

Covered person is defined as you, or any person or legal entity operating your vessel(s) as shown on theDeclarations Page, for private pleasure use with your direct and prior permission. It does not include:a. any paid captain or crew member;b. any person or legal entity operating, or employed by, or the agent of a marina, boat repair yard, yachtclub, sales agency, boat service station or other similar organization.However, we will cover your liability for bodily injury or property damage caused by any of these people ororganizations.Horsepower is defined as that amount stated by the manufacturer as peak-cleveloped horsepower asmeasured at the flywheel.Latent Defect is a flaw in the material which is existing at the time of the building of the vessel or hermachinery and which is not discoverable by the assured through ordinary methods of testing.Tropical Depressions, Tropical Storms, Hurricanes and Nor'easters are defined as those sodesignated by the National Weather Service and/or the National Hurricane Center.Actual Cash Value means the fair market value of the insured property at the time of loss.Sports Equipment means jet skis, waverunners, snorkeling and scuba gear. It also includes water skisand other items designed for being pulled behind the insured vessel.Fishing Equipment means rods, reels, tackle, lures, tackle boxes and coolers.Warranty means an agreement in the policy or provided by law that must be strictly and literally compliedwith. A breach of a warranty voids the insurance contract during the term of such a breach.Uninsured Boater and Uninsured Owner-Operator means any owner or operator of a vessel, other thanthe vessel named in this policy, who is legally responsible for the accident and:a. to whom no liability policy applies;b. who cannot be identified, such as a hit-and run-operator.

3


39/65



PART A: PROPERTY DAMAGE COVERAGEPERILS INSURED AGAINST: We will provide coverage for accidental, direct physical loss or damagefrom any external cause to your insured vessel as well as salvage charges, except as specifically excludedin this policy.OVERLAND TRANSPORT: We will provide coverage while your vessel is being transported overlandincluding loading and unloading.EXCLUSIONS: We do not provide coverage under Part A: Property Damage Coverage against loss orresulting damage from:a. wear and tear, gradual deterioration, weathering, insects, mold, animals or marine life;b. marring, scratching or denting;c. osmosis or blistering;d. manufacturer's defects or defects in design;e. the cost of replacing or repairing any item having a latent defect that causes damage to your insuredproperty, however, resulting damage would be covered;f. willful misconduct;g. corrosion, except electrolytic (stray current) corrosion.EQUIPMENT ON SHORE: We will provide coverage for all insured property removed temporarily fromyour vessel for storage on shore. The amount of insurance on the vessel will be reduced by the amountcovered on shore.DEDUCTIBLE AMOUNTa. we will adjust each claim separately for a covered loss to your insured property; the amount of eachadjusted claim will be automatically reduced by the Deductible Amount shown on the DeclarationsPage; no deductible will be applied in the event of a total loss to your vessel, except for conditionsoutlined in paragraph b below; for deductible purposes, we will treat any two or more covered lossesresulting from the same accident or occurrence as one claim;b. we will apply a separate property damage deductible to losses caused by wind, rain, waves or hailwhen those losses are the result of either a Tropical Depression, Tropical Storm, Hurricane orNor'easter; this deductible will be in lieu of the Part A: Property Damage Coverage Deductible Amount

shown on the Declarations Page, and will be applied to the amount of each loss; it will be applicable toall partial, total or constructive total losses; the deductible amount will equal three times the Part A:Property Damage Coverage Deductible Amount on the Declarations Page, or $2,500, whichever isgreater.LOSS SETTLEMENT: In the event of loss or damage to your insured property, we will pay the lowest ofthe following amounts:a. the Part A: Property Damage Coverage limit as shown on the Declarations Page;b. the cost of replacement;c. the cost to repair with no deduction for depreCiation, except as specified in Part A: Property DamageCoverage and as shown in the Property Subject to Depreciation section.We will pay for a total loss to your vessel and other covered property only if:a. the vessel is completely lost or destroyed;b. the cost of recovering and/or repairing the vessel is greater than the amount of insurance shown on theDeclarations Page.The cost of repairs shall be determined by yacht repair yards, equipment repairers or surveyors agreeableto the company.The amount we will pay for a total loss shall be reduced by the amount paid for repairs of prior covereddamage not completed at the time of the total loss.

4


40/65



PROPERTY SUBJECT TO DEPRECIATION: In the event of loss or damage to your insured plastic orcanvas coverings, inclusive of all-weather bridge and cockpit enclosures, and dodgers, sails, outboardmotors or outdrive units, machinery inside the vessel that is over seven years old, or components of any ofthe preceding items which requires replacement or repair, we will pay the lesser of:a. the actual cash value at the time of loss;b. the cost to repair subject to depreciation;c. the cost of replacement.SALVAGE CHARGES: We will pay for salvage charges you incur arising from a covered loss. Paymentsfor salvage charges will be in addition to any other payments we make for losses covered by this policy.However, the most we will pay for salvage charges is the Part A: Property Damage Coverage limit shownon the Declarations Page. The Part A: Property Damage Coverage Deductible Amount does not apply tothis coverage.COMMERCIAL TOWING AND ASSISTANCE: We will provide additional protection in the event thereis an emergency situation where. you and your vessel are not in imminent danger. The coverage shall bedeemed excess over all other valid and collectible towing assistance benefits. We will reimburse you for thereasonable costs you incur, not to exceed a total of $500, resulting from the following services to yourvessel if help is not available and you must obtain commercial assistance:a. towing to the nearest place where necessary repairs can be made;b. delivery of fuel, oil, parts or loaned battery (excluding the cost of these items themselves) andemergency labor, while away from safe harbor.Neither the policy deductible, nor the OTHER INSURANCE paragraph under GENERAL PROVISIONS INTHE EVENT OF LOSS, apply to this coverage.PART B: LIABILITY COVERAGEPERILS INSURED AGAINST: We will pay sums that you or a covered person become legally obligatedto pay as a result of the ownership, operation or maintenance of your insured vessel because of:a. attempted or actual raising, removal or destruction of the wreck of your insured property;b. failure to raise, remove or destroy the wreck of your insured property;c. bodily injury or loss of life;d. your liability to paid crew as defined in the Jones Act or under general Maritime Law;e. loss or damage to any property;f. pollution or contamination of any kind.EXCLUSIONS: We do not provide coverage under Part B: Liability Coverage for:a. liability of other covered persons to you, your spouse, or other persons who reside in your household;b. your liability to your spouse, or other persons who reside in your household;c. liability assumed by you under any contract or agreement;d. liability that arises while your insured property is being conveyed except at the point the vessel ishauled out of the water or launched;e. fines or other penalties that any government unit requires you to pay;f. punitive damages;g. bodily injury or property damage ariSing out of parasailing or scuba diving;h. liability that arises as a result of the sale, dispensing or consumption of alcoholic beverages on boardthe vessel insured by this policy;i. swimmers and divers of any kind, if any, either while embarking, after leaving the vessel(s) to enter thewater, while in the water, towed behind the insured vessel, or while boarding the vessel(s) on the returnfrom the water; in addition, this policy excludes all liability for injury, death or accidents from or inconnection with any sales, service or use of diving equipment of any kind, or in any manner connectedwith diving or swimming activities.

5


41/65



LIMITS Of LIABILITY: We will pay no more than the amount of insurance shown on the DeclarationsPage for all damage or losses resulting from:a. anyone accident or occurrence; with respect to pollution or contamination of any kind, we will pay up tothe Part B: Liability Coverage limit shown on the Declarations Page, or $500,000, whichever is greater;b. any series of accidents or occurrences arising out of the same event; this is the most we will pay

regardless of the number of covered persons involved, claims made, vessels or premiums shown onthe Declarations Page or the number of vessels involved.PART C: MEDICAL PAYMENTS COVERAGEPERILS INSURED AGAINST: We will pay for reasonable medical, ambulance, hospital, professionalnursing and funeral costs that become necessary due to accidental bodily injury to persons injured while in,upon, boarding or leaving your insured vessel. We will pay only for those costs incurred within one year ofthe date of accident.EXCLUSIONS: We do not provide coverage under Part C: Medical Payments Coverage for:a. any employee of yours injured while in the course of employment or while using, maintaining orrepairing your insured property;b. any responsibility for payment assumed by you under contract or agreement;c. anyone who is injured while your insured property is being conveyed, hauled out or launched;d. anyone to or for whom benefits are payable under any state or federal compensation law or act;e. anyone who is injured while parasailing or scuba diving;f. swimmers and divers of any kind, if any, either while embarking, after leaving the vessel(s) to enter thewater, while in the water, towed behind the insured vessel, or while boarding the vessel(s) on the returnfrom the water; in addition, this policy excludes all liability for injury, death or accidents from or inconnection with any sales, service or use of diving equipment of any kind, or in any manner connectedwith diving or swimming activities.LOSS SETTLEMENT: We will pay no more than the amount of insurance shown for Part C: MedicalPayments Coverage on the Declarations Page for all covered costs of each person injured as a result ofanyone accident or series of accidents arising out of the same event. Any payment made under Part C:Medical Payments Coverage shall reduce the amount payable under Part B: Liability Coverage or Part D:Uninsured Boater Coverage.MEDICAL PAYMENTS PROOf-Of-LOSS: A written, sworn proof of loss must be filed with us by anyperson seeking payment by us under the Part C: Medical Payments Coverage, or by someone on his/herbehalf. This proof-of-Ioss must include:a. the name and address of each person and organization performing covered services;b. the nature, extent and dates of these services; andc. itemized charges and any sums already paid.This proof-of-Ioss must be filed:a. as soon as reasonably possible after completion of services;b. as soon as reasonably possible after the cost of services being provided equals the amount of ourliability under Part C: Medical Payments Coverage on the Declarations Page;c. within one year of the date of the accident, whichever of the above occurs first.ADDITIONAL REQUIREMENTS: Each person seeking payment by us under Part C: Medical PaymentsCoverage must:a. submit to a physical examination by a physician selected by us when and as often as we reasonablyrequire; we will pay for the cost of the examination; andb. provide us with written authorization for release to us of copies of pertinent medical reports andrecords.ADMISSION Of LIABILITY: Any payment made under this section is not an admission of liability by youor us.

6


42/65



PART D: UNINSURED BOATER COVERAGEPERILS INSURED AGAINST: We will pay for the damages which, because of bodily injury receivedaboard your vessel, you are legally entitled to recover from the uninsured owner or operator of anothervessel.EXCLUSIONS: We do not provide coverage under Part D: Uninsured Boater Coverage:a. for claims settled without our written consent;b. if the uninsured vessel is owned by a government agency or unit;c. for vessels owned by or furnished for your regular use, or the use of a member of your immediatefamily or any person insured by this policy;d. for an insured using a vessel without permission;e. where no evidence of physical contact exists between your vessel and an unidentified vessel, or whereno evidence of physical contact exists between your vessel and an uninsured vessel.LOSS SETTLEMENT: The amount shown for Part D: Uninsured Boater Coverage on the DeclarationsPage is the most we will pay under Part D, regardless of the number of insured persons, claims made orvessels involved in anyone accident or series of accidents arising out of the same event. This coveragewill not apply directly or indirectly to the benefit of any insured under any state or federal compensation lawor act. Payment made for this coverage to or for an insured person will reduce the amount that person isentitled to recover from the Part B: Liability Coverage of this policy.PART E: FEDERAL LONGSHOREMEN'S AND HARBOR WORKERS'COMPENSATION INSURANCEWhen insurance is provided under Part B: Liability Coverage, insurance is also provided under this section.We will provide coverage for any liability which you, as owner of the insured property, incur during the termof the policy under Part E: Federal Longshoremen's and Harbor Workers' Compensation Insurance.

PART F: VESSEL TRAILER COVERAGEPERILS INSURED AGAINST: We will provide coverage for all accidental, direct physical loss ordamage to any trailer listed on the Declarations Page, but only:a. if used exclusively for transporting the vessel; andb. while located in the continental United States including Alaska, Hawaii, Puerto Rico or Canada.EXCLUSIONS: We do not provide coverage under Part F: Vessel Trailer Coverage against loss orresulting damage from:a. wear and tear, mechanical breakdown, gradual deterioration, weathering, insects, mold, animals,marine life, ice, freezing or extremes of temperature;b. marring, scratching or denting;c. osmosis, blistering, electrolysis or corrosion;d. manufacturer's defects, defects in designs or latent defects;e. weight of a load exceeding the rated capacity of a trailer.DEDUCTIBLE AMOUNT: We will adjust each claim separately for a covered loss to your insuredproperty. The amount of adjusted claim will be automatically reduced by the Deductible Amount shown onthe Declarations Page. We will treat each covered loss as a separate claim. For deductible purposes, wewill treat two or more covered losses resulting from the same accident or occurrence as one claim.

7


43/65



LOSS SETILEMENT: In the event of loss or damage to the vessel trailer, we will pay the lowest of thefollowing amounts;a. the Part F: Vessel Trailer Coverage limit as shown on the Declarations Page;b. the actual cash value at the time of loss;c. the cost to repair subject to depreciation;d. the cost of replacement.PART G: PERSONAL PROPERTY COVERAGEPROPERTY COVERED: We will cover clothing, fishing equipment and personal effects that belong toyou, your clients or members of your family while these items are on board your vessel or are being loadedor unloaded. We will not cover sports equipment, money, jewelry, traveler's checks or any other valuablepapers or documents.FISHING EQUIPMENT STORED ASHORE: We will cover fishing equipment temporarily storedashore. However, the coverage 'provided herein does not insure the mysterious disappearance and/or theftof any covered fishing equipment, unless:a. there is visible evidence of forcible entry into the storage facility;b. there is visible evidence of forcible removal of covered fishing equipment from the storage facility.EXCLUSIONS: We do not provide coverage under Part G: Personal Property Coverage against loss orresulting damage from:a. wear and tear, mechanical breakdown, gradual deterioration, weathering, insects, mold, animals,marine life, ice, freezing or extremes of temperature;b. marring, scratching or denting;c. osmosis, blistering, electrolysis or corrosion;d. manufacturer's defects, defects in designs or latent defects.MYSTERIOUS DISAPPEARANCE: The coverage provided herein does not insure the mysteriousdisappearance and/or theft of any covered property unless:a. there is visible evidence of forcible entry into the cabin of the insured vessel;b. there is visible evidence of forcible removal of covered properties from the insured vessel;c. there is a theft of the entire vessel.CAUSES OF LOSS WHICH ARE COVERED: We will cover direct physical loss or damage from anyexternal cause, except as specifically excluded in this policy.DEDUCTIBLE: We will adjust each claim separately for a covered loss to your insured property. Theamount of adjusted claim will be automatically reduced by the Deductible Am9unt shown on theDeclarations Page. We will treat each covered loss as a separate claim. For deductible purposes, we willtreat two or more covered losses resulting from the same accident or occurrence as one claim.LOSS SETILEMENT: In the event of loss or damage to your insured property, we will pay the lowest ofthe following amounts:a. the Part G: Personal Property Coverage limit as shown on the Declarations Page;b. the actual cash value at the time of loss;c. the cost to repair subject to depreciation;d. the cost of replacement.The OTHER INSURANCE paragraph under GENERAL PROVISIONS IN THE EVENT OF LOSS does notapply to PART G: PERSONAL PROPERTY COVERAGE.GENERAL CONDITIONS AND EXCLUSIONSPOLICY PERIOD: This policy applies only in the event of an accident or loss which occurs during thePolicy Period as shown on the Declarations Page.

8


44/65



EXTENSION OF COVERAGE: If the Navigational Limits or Lay-Up Warranty shown on the DeclarationsPage are breached due to matters beyond your control, the policy will remain in effect, but only if you giveus written notice of the breach within 10 days after the breach and pay any additional premiums due us forthis extension of coverage. If the Navigation Limits or Lay-Up Warranty are breached voluntarily, there shallbe no coverage under this policy without both prior notice to us and approval by us.

NON-OWNED VESSEL: We do not provide any coverage for non-owned vessels you may operate.RACING: We will not pay for any loss that occurs while the insured vessel is being operated in any race orspeed test. This does not apply to sailboats navigating in inland waters or in coastwise waters of thecontinental United States within 10 miles offshore.BROADENING COVERAGE: If, during the Policy Period, we make any revision to this policy, whichbroadens the coverage without additional premium, the broadened coverage will apply as of the effectivedate of such revision.POLICY PREMIUM AND RENEWAL: The premium shown on the Declarations Page is the initialpremium for this policy. If we agree to renew or continue the policy, then at the time of each renewal orcontinuation of, on the policy anniversary date, the premil,!m for the renewal or continuation will becomputed by us according to our premium rules, forms and guidelines then in use.CHANGES IN POLICY: This policy contains all of the agreements between you and us. Its terms maynot be changed or waived except by an endorsement issued by us. If a change requires a premiumadjustment, we will adjust the premium as of the effective date of the policy change.CONFORMITY TO STATE LAW: When a provision of this policy is in conflict with the applicable law ofthe state in which this policy is issued, then the law of the state shall apply.CANCELLING THE POLICY: You may cancel this policy by returning it to us or our authorized agent orby advising us or our authorized agent in writing, stating the future date you want it to be cancelled. Wemay cancel this policy by delivering or mailing to you at your last address shown on our records, writtennotice stating when, not less than 15 day after mailing, the policy will be cancelled. Delivery or mailing ofthis notice to you shall be sufficient proof that notice of cancellation was given. The date of the cancellationstated in the notice shall become the end of the Policy Period.RETURN PREMIUMS: If this policy is cancelled, you may be entitled to a premium refund. If we cancelthe policy, any return premium will be computed on a pro-rata basis. If you cancel the policy, any returnpremium will be computed on a 90% pro-rata basis. No premiums will be returned to you if we have paidyou for a total or constructive total loss of the vessel insured under this policy. Any return premium will bepaid to you as soon as'possible after the cancellation.USE OF VESSEL: We do not provide any coverage while your insured property is used for any type ofcommercial purposes other than carrying fare-paying passengers on sport fishing and other similarexcursions. It is further warranted that, if applicable, the vessel maintain a current certificate of inspectionfrom the United States Coast Guard. We will provide coverage when your vessel is used for privatepleasure and while you are attempting to aid other vessels in distress, provided there is no considerationfor your services.CAPTAIN WARRANTY: Warranted that while the insured vessel(s) is used for commercial purposessuch as described under Use of Vessel, a captain duly licensed in accordance with United States law andthe law of the Port from which the vessel operates shall be aboard and in charge of the vessel at all times.

PASSENGER WARRANTY: Warranted that the number of passengers carried on board the insuredvessel(s) shall be in compliance with all United States Coast Guard and/or government regulations.

9


45/65



FIREARMS EXCLUSION: We do not provide coverage against loss, damage or expense arising fromthe intentional or accidental discharge of a firearm on board the vessel(s) insured by this policy.NAVIGATION WARRANTY: Navigation will be confined as stated in the Declarations Page, but in noevent shall the vessel be navigated beyond the limits permitted by the United States Coast Guard.LAY-UP WARRANTY: Means a series of consecutive months during the policy period when your vesselis laid up and out of commission. During this time your vessel must be laid up in a safe berth ashore orafloat, and not navigated or used for living aboard. All removable gear and equipment must be taken off thevessel and stored ashore.SEAWORTHINESS WARRANTY: Warranted that, at the inception of coverage and throughout thepolicy term, the vessel shall be in seaworthy condition, the insured shall exercise due diligence to keep thevessel seaworthy, and in all respects fit, tight, and properly manned, equipped and supplied.LOSS-OF-USE E X C L U S I O ~ : We do not cover loss resulting from cancellation of charters,noncollectibility of freight, bad debts, insolvency of agents or others, or detention of demurrage of thevessels insured by this policy.TRANSFER OF INTEREST: All coverage provided by Us will terminate upon the sale, assignment,transfer or pledge of the insured property or of this contract unless prior

Documents

LONE EAGLE RESORTS, INC. v. ACE AMERICAN INSURANCE COMPANY Charter Policy