Surface Water Exclusion Does Not Apply to Damage Caused by Runaway Boats, N.Y. Federal Magistrate Judge Says

NEW YORK — A New York federal magistrate judge has recommended awarding policyholders summary judgment in a dispute over whether property damage caused by two runaway boats during Superstorm Sandy falls within the policy’s “Surface Water Exclusion.”

In a Feb. 2 report and recommendation, Magistrate Judge Gary R. Brown of the U.S. District Court for the Eastern District of New York opined that the usage of “water borne material” within the policy language suggests that it refers to something other than watercraft gone rogue.

Adam and Carrie Spindler’s Merrick, N.Y., residence was insured under an all-risk policy issued by …