Damage Caused by Runaway Boats Does Not Fall Within ‘Surface Water Exclusion,’ N.Y. Federal Judge Rules

NEW YORK — A New York federal judge has adopted a magistrate judge’s recommendation that policyholders be awarded summary judgment on the issue of liability in a dispute over whether damage caused by two runaway boats during Superstorm Sandy falls within the policy’s “Surface Water Exclusion.”

In a March 9 order, Judge Joanna Seybert of the U.S. District Court for the Eastern District of New York agreed with the magistrate judge that damage caused by the collision of the two boats with plaintiffs’ property was an ensuing loss that is not barred by the policy’s Surface Water Exclusion.

Adam and …