Program Highlights HIGHLIGHTS:

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2 Table of Contents Program Highlights Pg. 3 General Information Pg. 4 New Business - Quote Referrals - Renewals Pg. 5 Eligibility Pg. 5 Owner & Operator Information Pg. 6 Boat Information Pg Manufacturer Boat Type Engine and Propulsion Type Material Type Speed Boat Value Safety Equipment Survey Navigation Trip and Transportation Coverage Options Pg Helmsman Plus Hull Theft Hull Settlement Options Deductible Port Risk Transit & Storage Lay-Up Lien Holder and Premium Finance Additional Insured Windstorm Deductible Windstorm Aggregates Windstorm Catastrophe Management Windstorm Extra Expense Tender Trailer Personal Effects Rental Reimbursement Emergency Towing and Assistance Boat House Boat Lift Protection and Indemnity Pollution Long Shore and Harbor Workers Compensation Medical Payments Uninsured and Underinsured Watercraft Policy Change Judgment Contact Information Pg. 17 This manual is intended to provide an overview of the Markel Helmsman Yacht program. This manual is protected by legal privilege and should not be shared with anyone unauthorized. Ed. MHP

3 Program Highlights The Markel Helmsman Yacht program is intended to focus on owners with at least three years experience with a similar type and size of boat that have been loss free for two years. The program has numerous coverage options available providing the flexibility to tailor the coverage to the risk attributes. Insurance scoring is incorporated in rating which provides an objective and consistent tool by which to price the risk. An insurance score is developed using credit report attributes that have been shown to be statistically predictive of claims frequency. With some of the best coverage in the marketplace, knowledgeable claims and underwriting staff, top-notch service and our commitment to the industry, we are well positioned to suit the needs of the yacht owner. HIGHLIGHTS: Hull No maximum length or value Agreed Value provision for Total losses with Replacement Cost provided for most partial losses Actual Cash Value option available Numerous usage options, including: Pleasure, Live Aboard, Bareboat, Ltd. Charter, Multi-Owner/ Timeshare Coverage for Protect and Recover in addition to the Hull limit Actual Cash Value Tender coverage provided, with Agreed Value option $500 Electronics Deductible for boats < = 10 years of age $1,000 Rental Reimbursement coverage included, with higher limits available $2,500 in Personal Effects coverage included, with higher limits available $750 in Emergency Towing and Assistance coverage included, with higher limits available $1,000 Aggregate for Windstorm Extra Expense included Protection and Indemnity High Limits Jones Act Wreck Removal included, with purchase of Hull coverage Coverage provided while operating insured yacht or non-owned yacht Longshore and Harbor Workers Compensation Uninsured Boater coverage equal to the Watercraft Liability limit, up to $2,000,000 Oil Pollution available with separate limit to $800,000 Medical Payments included at $10,000, with higher limits available Helmsman Plus: When Hull and Protection and Indemnity are purchased, we provide $25,000 Medical Payments, $10,000 Personal Effects, and $2,500 Emergency Towing and Assistance at no charge. Optional: Primary Fishing Trailer Transit & Storage Boat Lifts and Boat Houses Trip Coverage We are pleased to offer a premium benefit for the following items: Multi-unit under same policy Approved Safety Equipment Pod Drive (IPS or Zeus) Diesel fuel Operators 40 and older Lay-up 3

4 The program highlights provide a high level overview and is not all inclusive. Always refer to the policy form and restrictions that are applicable. Business & Quote Referrals General GENERAL POLICY CONDITIONS All policies are written on an annual term The Minimum Earned Premium is $250 The Minimum Written is as follows: $500 for any risk with no Protection and Indemnity or where the limit is < = $300,000 $750 when Protection and Indemnity limit is $500,000 $1,000 when Protection and Indemnity limit is $1,000,000 PAYMENT PLANS The following payment plans are available dependent upon the total premium: Full Pay 2 Pay: 50% down, 50% due in 60 days (minimum $500) 3 Pay: 40% down, 30% due in 60 days, 30% due in 120 days (minimum $750) 6 Pay: 30% down, 15% due in 30, 90, 120, 150 and 10% due in 180 days (minimum $1500) A $5 installment fee is charged for each installment payment or as allowed by state regulations. The first premium payment may be invoiced. If payment is not received within 21 days, the policy will be flat cancelled. Commission will be paid after receipt of the first payment. We strongly encourage securing payment as we believe retention is higher. BILL OTHER If the Bill Other option is chosen, the invoice is mailed to the designated party with all legal documents sent to the Named Insured. MARINE LOSSES Applicants are required to attest to ALL Marine Losses. The loss information must be entered into the MAGIC system. User authority will determine if the loss requires submission. A loss is a situation or occurrence that resulted in damage (even if a claim was not presented or was denied). Information relevant to the details of the claim should be documented in the system when making a submission. If the loss is within authority, evaluate how recent the loss occurred, the level of error in judgment that factored into the loss and the likelihood of reoccurrence. Based upon these factors, consider the appropriate course to address the exposure presented, which may include any of the following: surcharge, a higher deductible, training requirements or other coverage restrictions. If more than 2 at fault losses in three years, the risk is ineligible. PHOTOGRAPHS We retain the right to request photographs at our discretion. MULTIPLE UNITS Multiple units can be added to a policy provided they are in the same state. If there are two or more risks in different geographic locations within the same catastrophe exposed state, two policies may be required. Contact MAIC for direction should this situation arise. 4

5 New Business - Quote Referrals - Renewal The Markel Helmsman Yacht product will be quoted and issued on the MAGIC system. The system was designed to be used in a retail and wholesale environment. Once a quote has been generated in the system, a quote sheet will be available in PDF format. The quote sheet will outline the coverages and premium, as well as minimum conditions that should be disclosed to the prospective customer. APPLICATIONS: Signed applications are required for all risks. The application will be pre-filled with the information captured in the quoting process and may be printed or retrieved and sent electronically. ELIGIBILITY: The Product guidelines and the MAGIC system will alert you to potential eligibility issues. A warning message will be provided if a risk attribute is entered that renders the risk ineligible. If you receive a message that the risk is ineligible, do not proceed. Should you have questions, please contact MAIC for clarification. Not all conditions that render a risk ineligible will be flagged by system rules. It is the responsibility of the user to be familiar with the eligibility section of this manual and notifications delivered via bulletin. QUOTE INDICATIONS: To provide a quote, enter the required fields that are marked within MAGIC. If the order is placed, additional information will be required to issue. If the risk is outside of your authority a quote indication will be provided. Quotes may be released as an indication without being submitted to the company. When releasing an indication to an applicant, please be sure to notify the applicant that coverage and premium is subject to company review and approval. QUOTE: A quote will be good for a period of 60 days and must be issued within this window. Otherwise the quote will be required to be refreshed/recalculated using the most current rate profile. REFERRAL PROCESS: To expedite the referral process, it is preferred that any documents that may be relied upon in the underwriting process are added as an attachment in MAGIC and labeled according to the type of document. For efficiency, referral submissions should be made via the MAGIC system referral process. BINDER: An approved quote may be bound by the producer for a period not to exceed 30 days. ISSUANCE: If the risk attributes are within your authority or you have received company approval, you may issue the policy in MAGIC. In order to issue a policy the following information is required: Primary Phone Hull Identification Number (HIN) & Engine Information Location Name Loss Payee, if applicable RENEWAL AND NON-RENEWAL: See the General Manual Eligibility UNACCEPTABLE OWNER: Excess Marine losses < 26 Owner <18 Applicant or Operator convicted of Felony UNACCEPTABLE WATERCRAFT: Speeds > 65 mph, unless Center Console < = 75 mph Held for sale 5

6 Used commercially, except as outlined under usage Racing Sailboats ( Example Carroll Marine, Farr) Homemade, kit, house on boat or barge < = 1986 Ocean yachts SUBMIT ANY RISK WHEN WATERCRAFT AND EQUIPMENT COVERAGE IS REQUESTED: Hull or Engines have been modified from Stock Purchased as salvage or is in poor to fair condition Hull is ferro cement or fiberglass over wood Any risk moored outside US Uninsured for > 30 days Requested Hull value is > 110% of purchase price Owner has been previously cancelled or non-renewed Owner has < two years ownership experience with a like kind and quality boat Absentee Ownership Coastal Houseboat Owner & Operator NAMED INSURED/OWNER An owner must be at least 18 years of age and have the financial means to properly maintain the boat. Insurance scoring is part of rating, we strongly encourage using the owner s Social Security number for the most accurate rate. If the boat is corporately titled, it is acceptable to be used for both personal and client entertainment. The Corporate Designee will be insurance scored. In most cases the Corporate Designee will also be the operator. We will accept up to three owners before usage must be changed to multi-owner. A spouse is not considered an additional owner. OPERATOR(s) We require two years of ownership experience on a similar boat to be a primary operator, otherwise submit to MAIC for review. It is important that experience was gained through ownership, not just operation. Operators must be disclosed with their experience listed in the system. USAGE Pleasure: Used for pleasure or client entertainment only, no commercial benefit permitted. Live-aboard: A boat that is used as a primary residence. Live-aboard status is not required for an owner with a primary house that occassionaly lives aboard. Floating homes without engines, houses on barges or floating homes are not eligible. Live-aboard boats create higher risk due to additional guest passenger activity and from heavier loads on electrical systems as a result of using appliances that may not have been intended when the boat was built. A lay-up credit should not be given. A rating factor for Live-aboard is applied and the owner is insurance scored. Multi-Owner or Fractional: A boat with more than three parties that have ownership interest or have purchased a time period to use the boat, referred to as members. For fractional ownership, the named insured will often be a corporation which manages the usage and maintenance. All risks must be submitted to MAIC for evaluation. The number of owners or members must be entered into the MAGIC system. The managing agency & members experience must be evaluated. Insurance score is not utilized in rating. Charter Usage Guidelines: All charter risks must be submitted to MAIC. The following section will provide an overview of offerings. Ltd. Charter: Coverage is available for owners that utlize their boat in a limited Captained charter capacity. Often boat owners charter their boat to help offset ownership costs. The owner or corporate designee is insurance scored. Require: Captain must have a minimum of 2 years loss free experience on similar size and type of boat 6

7 Well built and maintained fiberglass powerboat, twin diesel powered, and < 15 years of age Maximum 6 passengers & Maximum 21 days Submit copy of Captains license Coverage: Coverage is fully earned Minimum premium $250 Attach Charter Endorsement Bareboat: A yacht that is chartered for a specific duration without skipper or crew. Under a bareboat arrangement, the insurance benefits pass through to the charterer. The owner or corporate designee is scored. Require: 2 Year loss free experience in bareboat operation Mono-hulled sailboat or trawler, diesel powered, and < 10 years of age Copy of charter contract and checkout procedures If managed by fleet, require listing agreement Coverage: Minimum 2% deductible Coverage is fully earned Minimum premium $250 No Primary Fishing coverage available Evaluate appropriateness of Personal Effects limit Charter Fleet: Considered on an exception basis only. The boat is managed by a fleet manager and is chartered more than 21 days. Require: Same as Ltd. Charter Coverage: Same as Ltd. Charter Change of Usage: If a boat usage changes, contact MAIC. To change from an insurance scored to non-scored usage or vice versa requires cancellation and rewrite. Boat MANUFACTURER To ease entry and properly track results, manufacturers are listed within the system. If the manufacturer is not provided, the user may enter the information. The following section provides a brief overview of the available Boat Type options: BOAT TYPE Center Console Has an open deck with the console in the center, so fishermen have space to easily manuever to fight fish. These boats are typcially powered with twin outboards, however some may have one engine or up to four (referred to as quad engines). 7

8 Cruiser/Express Cruiser This type of boat typically has accomodations or features that make for comfortable boating including a galley, head and berth(s), making it a great family boat. An Express Cruiser reflects that the boat can achieve greater speed. Houseboat A large, flat-bottom boat with house-like characteristics, such as comfortable furniture and living accommodations. These boats are intended for inland operation on calm waters. Motor Yacht A large powerboat, typically greater than 40 feet in length with luxurious interior accommodations and capable of long range cruising. Numerous configurations are available to suit many needs or preferences. Multi-Hull Power A power boat without rigging to sail, built with two sponsons/amas. 8

9 Sailboat Mono A single hulled (mono) sailboat which primarily uses wind as its means of propulsion. Most will have an auxiliary engine as an ancillary means of propulsion, which makes for easier maneuvering and docking. Sailboat Multi A sailboat built with two sponsons/amas or a hull and sponsons/amas. Catamarans and trimarans fit into this category. Sail - Racing A lightly built sailboat using high tech materials and building techniques. Carroll Marine and Farr are examples. These boats are NOT eligible. Sportfish A type of fishing boat with cabins and many dedicated features, including a large aft cockpit and a fighting chair to reel in the big one. 9

10 Trawler A displacement or semi-displacement hull with a pilothouse, typically powered by a single diesel engine. Significant fuel capacity is provided for long-range cruising. ENGINE AND PROPULSION TYPE While most boats will have two engines, we will accept boats with up to four engines, which may be found on performance oriented center consoles. Diesel engines receive a premium credit. Acceptable propulsion types include: Inboard/Outboard (Sterndrive) Inboard or Vee Drive Outboard Pod (Volvo IPS or Cummins MerCruiser Zeus) Surface Jet MATERIAL TYPE Acceptable hull material types include: Fiberglass Metal/Aluminum Composite Wood Inflatable Ferro Cement* Fiberglass over wood* * Must be submitted to MAIC for approval. Coverage may be acceptable as Protection and Indemnity only, however Hull and Pollution coverage will not be offered. SPEED To assist in the evaluation of faster boats, the MAGIC system has a tool to help validate the speed. Simply choose the a constant based on the hull design, horsepower and weight. You may add 400 pounds for fuel, operators and provisions if you use a guidebook or builders weight. The maximum speed for the program is 65 MPH, unless the boat is a center console, which is limited to 75 MPH. BOAT VALUE The market value of the boat should include the boat, motor and all equipment permanently attached. (Do not include the trailer value.) To validate current market value, please consult one or more of the following sources: Bill of Sale BUC Guides NADA Boat Trader Yacht World Current marine survey 10

11 SAFETY EQUIPMENT A discount is provided for the following Equipment: Monitoring System* VHF Depth Finder Radar EPIRB GPS CO Detector High Water Alarm Built in Fire Suppression Weather Fax *Monitoring systems are able to establish an electronic fence, monitor bilge pumps, detect motion and smoke, etc. Examples for the monitoring system credit include Volvo s SeaKey, Magellan s Nav-Tracker with Security Package, Boat Nanny and Marine Guardian. Secure evidence of the equipment for the underwriting file when providing the credit. If you feel that another system should be considered, please contact Underwriting for consideration. SURVEY As boats age, vital components and machinery are subject to degradation from normal usage and the harsh environment where used. The value of the boat will likely depreciate over time, however based on the maintenance and care provided, variations in value will occur with two otherwise similar boats. It is of the utmost importance to understand the condition and value of the boat to evaluate eligibility, set policy conditions and the appropriate rate. A Condition and Value survey (or C & V) is an important tool to evaluate that a marine risk is fit for its intended purpose and to ensure the value is appropriate. When a professional survey is required, it must be performed by a competent unbiased surveyor. It is preferred that the surveyor is accredited by a well known organization such as the National Association of Marine Surveyors (NAMS) or the Society of Accredited Marine Surveyors (SAMS). Survey Requirements: When the boat reaches 10 years* of age Saltwater; or 15 years* of age Freshwater, a professional Condition and Value survey or Self Survey is required. Self Survey options and restrictions are outlined below. Once the initial survey is received, a professional C & V survey must be performed every 5 years. The survey must be performed out of water within the last year. The survey must have been commissioned by the boat owner. Wood must be checked for wastage due to rot or deterioration. Additionally, fasteners should be randomly pulled to validate integrity. Aluminum/Steel requires that an audio gauge be completed for hulls over 15 years of age to measure thickness. *Age is determined by subtracting the current year from the model year and adding one. Self Survey For powerboats with a value less than $500,000, the Markel Marine Self Survey evaluation form can be used at the first survey requirement. This document should not be used if there has been a loss or if other reasons dictate that a professional C & V be performed. The Self Survey form was developed with input from Underwriters, Claim Personnel and Surveyors. The goal was to develop a self survey form that is comprehensive, yet should be understood by most people with some technical or mechanical ability. The completion of the form will take about three to four hours, however considering the cost of a Condition and Value survey, the time spent is justified. The boat owner can always elect and should be encouraged to get a professional C & V survey if they do not believe they can adequately perform the evaluation. The Self Survey form provides the following advantages: Increased Retention: Once a C & V survey is procured boat owners may decide to shop. 11

12 Awareness: The document was written to encourage hands on evaluation of mechanical systems as well as provide warnings of the consequences of deferred maintenance. Controls: The document content and photographs serve to validate condition. Process: When the boat age requires survey, the type of survey is selected via endorsement alerting the policyholder of the requirement for the subsequent term. Once the survey is returned, the information must be evaluated for adverse conditions. If the policyholder fails to provide a Self Survey form and photographs, change the requirement to a professional survey and place the boat on port risk. If a professional C & V was initially requested, leave the requirement on the policy and place the boat on port risk. If during the second term, the professional survey is not received, non-renew the policy. Recommendation Compliance and Condition: If recommendations are not safety related, recommendation compliance shall be secured within 30 days. If safety related recommendations are documented on the survey, the boat should be placed on port risk until the conditions are remedied. If significant deficiencies are detected, supportive that the boat is no longer being maintained appropriately, consider port risk or non-renewal. Should questions or concerns arise regarding the condition of the boat, forward the survey and photographs to MAIC. The executed Recommendation Compliance must be kept in the legal file. Recommendation Compliance forms are available on the Markel Marine website. NAVIGATION Numerous navigational options are available. If the base navigations require modification, submit the desired navigation to MAIC. If warranted based upon the age, type or condition of the boat or due to operator inexperience, the distance offshore should be limited. For higher risk navigations such as; costal waters of Oregon and Washington, Mexico or Bahamas, we require a well built and maintained twin engine boat =>35 with an experienced or professional captain. TRIP AND TRANSPORTATION A trip is a voyage outside of the stated navigational limits or within the stated navigational limits, but occuring during lay-up. All trip requests must be submitted to MAIC providing sufficient lead time to evaluate the request, determine appropriate conditions and pricing. A Trip Questionaire form, which is available on the Markel Marine website, must be provided with the trip request. Require: Destination: The furthest point the boat will travel. Experience: The experience of the captain and crew in the proposed waters. Dates and Duration: The earliest date the boat will leave and the lastest date the boat will be back at homeport. Itinerary: Outline the planned destinations, if the boat will be unattended at any point, the purpose of the trip and any other relevenat information. All trip premiums are fully earned regardless of whether the trip was made. If a trip crosses the policy anniversary, the trip dates will not extend past the respective policy dates. When a trip is provided, the policy will be flagged for review prior to renewal. The boat may be transported overland on its trailer provided that the weight of the rig does not exceed the capacity of the towing vehicle. A limitation of 350 miles is provided for an insured yacht being moved by a contract or common carrier. If the boat will be moved beyond 350 miles, submit to MAIC. Coverage Options This section will provide information regarding available coverage options. Always refer to the policy for specific coverage details. The policy language will always prevail. 12

13 HELMSMAN PLUS: For yachts with values => $250,000 and Agreed Value settlement, the Helmsman Plus enhancement may be added which includes higher limits of: $25,000 Medical Payments, $10,000 Personal Effects, $2,500 Towing & $2,500 Rental Reimbursement. HULL: Coverage is provided on an all risk basis, subject to policy terms and conditions. Hull coverage can be purchased as stand alone coverage, however Personal Effects, Fishing Equipment, PWC Hull, Rental Reimbursement, Tender, Trailer, Towing, Boathouse and Boat Lift require Hull coverage to be purchased. The Hull Identification number and all outboard engine serial numbers must be secured before binding. THEFT: Where the risk of theft is more prevelant, such as with faster boats or center consoles in south Florida it is of the utmost importance to evaluate the integrity of the owner and theft prevention measures that they will undertake. When underwriting or submitting a risk, evaluate or provide: Occupation and Duration of Employment Purchase Price and Date, prefer Bill of sale Name of prior Insurer on last boat Evaluation of theft prevention, we prefer: Secured Gated Marina, Locked Building or Fenced Area Security System It is not acceptable to leave a Center Console in Florida on a trailer. HULL SETTLEMENT OPTIONS: The base policy provides Agreed Value coverage for a total loss and Replacement cost for most partial losses, however high wear items are subject to Actual Cash Value (ACV) settlement terms. Two other settlement options are available, the Agreed Value/ACV endorsement provides Agreed Value coverage for a Total Loss, however all partial losses are settled on an ACV basis. Also provided is a Full ACV settlement option, subject to the Hull coverage limit. Premium benefit is provided with ACV settlement options. When the boat reaches 10 years of age in saltwater or 15 years of age in freshwater, the Engine ACV endorsement must be attached. If the boat value is <$35,000, the Agreed Value total loss/ ACV endorsement or Full ACV endorsement must be attached. If the boat is in fair to poor condition, the Full ACV endorsement must be attached. If either of these endorsements are selected, the Engine ACV endorsement does not attach. The user tasked with evaluation of the risk, must set the appropriate settlement terms. DEDUCTIBLE: The deductible is chosen as a percentage of the Hull value. Where higher risk characteristics exist, the boat owner should bear a higher portion of the risk. Based upon the age and the number of engines, system driven minimum deductibles will apply. Examples of higher risk characteristics are outlined below. Minimum deductibles: 1% if < 30 years; 2% if => 30 Years 2% if 3 Engines; 3% if 4 Engines 2% Deductible or higher warranted if: Wood Condition less than good Higher risk navigation Operator inexperience Prior loss history Selecting a higher deductible will provide premium benefit. The MAGIC system has minimum deductibles built in to the system which will be reflected on the Coverage page. 13

14 PORT RISK: If hazardous conditions surface, the boat should be placed on port risk until the conditions are remedied. Dependent on the significance associated to the hull conditions or deficiencies, two port risk options are available. If the deficiencies are minor, port risk afloat can be utilized, however if deficiencies are significant, the boat should be placed immediately on port risk ashore. TRANSIT AND STORAGE: If an insured yacht is in the process of being refurbished or undergoing repairs, the Transit and Storage endorsement must be attached until the boat has been proven to be in good condition and fit for navigation. It is of the utmost importance to underwrite the location, the scope of work to be accomplished and the financial means to complete repairs. The insured yacht may not be launched or lifted from the trailer with the intent of being placed in the water. Additionally, the boat must be within the radius provided within the endorsement. Limitations: Minimim 3% Deductible No Personal Effects Maximum $500,000 P&I All Transit and Storage risks must be submitted to MAIC. LAY-UP A period of time that the boat is either decommissioned out of the water (ashore) or decommissioned in its berth (afloat). Since risk is reduced, premium benefit is provided. Due to geographic conditions, lay-up restrictions apply in some areas: Atlantic: From New Jersey north, boats must be laid-up ashore no later than 11/01 due to storms that are common during this period. Northern: Where freezing and snow loads are prevelant, the boat should be be laid-up ashore. South: No lay-up is provided for boats moored in Florida or coastally in Gulf waters. If you feel that it is warranted to deviate from the stated restrictions, submit to MAIC. LIEN HOLDER AND PREMIUM FINANCE A lien holder can be added to the policy at inception or at a later date by endorsement. Due to the payment options available, we will not accept a risk with Premium Finance Company conditions. If a mortgagee or lien holder requires breach of warranty coverage, submit to MAIC with the outstanding loan balance. ADDITIONAL INSURED A designated marina can be added under Protection and Indemnity at no additional charge. Coverage is provided for liability arising from the maintenance or use of the insured yacht in conjunction with operations performed as a marina providing service or storage. If requested to add a party other than a marina, or more than one Additional Insured, submit to MAIC for approval. Refer to the system manual on how to add the premium to the endorsement. WINDSTORM DEDUCTIBLE If the boat is in a storm zone, a windstorm deductible will be applicable to all losses caused by tropical depressions, tropical storms and hurricanes. The windstorm deductible will be chosen within the system. If a higher windstorm deductible is selected, premium benefit is provided. WINDSTORM AGGREGATES If windstorm capacity is reached within a region or zone, a notice will be provided within the system that Hull coverage may only be purchased without wind coverage (the wind exclusion endorsement will attach), or alternatively a P & I only policy may be purchased. If a policy has been written with or without wind coverage, it must remain until the renewal term is offered, at which time coverage can be revised, provided that capacity is available at that time. 14

15 When the Windstorm Exclusion attaches to a policy, a disclosure will print on the quote sheet. A Windstorm Disclosure document is provided for the applicant to acknowledge that the coverage they have applied excludes coverage for certain windstorm events. WINDSTORM CATASTROPHE MANAGEMENT It is mandatory for risks written coastally from North Carolina through Texas to provide an acceptable Hurricane Preparedness Plan. It is preferred that the boat be hauled and secured on land or moved to an acceptable hurricane hole. Future aggregate allocations will be based on your book s performance. WINDSTORM EXTRA EXPENSE If Hull coverage is purchased, windstorm extra expense coverage is provided. If a windstorm watch or warning is declared where the insured yacht is moored, we will provide coverage for 50% of the amount incurred to protect the insured yacht, limited to $500 per occurrence with a maximum of $1,000 per year. TENDER A tender is an auxilliary watercraft that must be able to be stored aboard the insured yacht (other than a personal watercraft) while underway, with the main purpose of serving the insured yacht in delivering supplies or passengers to and from shore. If Hull coverage is purchased: If tender is unscheduled, coverage is provided on an Actual Cash Value basis up to 5% of the Hull limit subject to a maximum of $50,000. For an unscheduled tender, coverage is not provided if damaged due to windstorm. If tender is scheduled, coverage is provided on an Agreed Value basis for a total loss, and replacement cost for most partial losses, or as selected based upon the settlement terms for the Insured Yacht. TRAILER Actual Cash Value coverage is available for a trailer designed to carry the insured watercraft, subject to a 2% deductible or $250, whichever is greater. Trailer serial numbers must be secured on the application or via bill of sale. PERSONAL EFFECTS If Hull coverage is purchased, $2,500 of Personal Effects coverage is included, subject to a $250 deductible. Optional higher limits are available. Provides coverage for personal items not generally required for the safe operation of the boat such as sporting equipment, clothing and other personal items. This coverage shall apply only while such property is aboard or while being loaded upon or unloaded from the insured yacht. Higher limits are provided if eligible for Helmsman Plus. RENTAL REIMBURSEMENT If Hull coverage is purchased, provide $1,000 of Rental Reimbursement coverage if the insured yacht is damaged by a covered cause of loss for costs incurred to charter a similar replacement boat. Higher limits are provided if eligible for Helmsman Plus. EMERGENCY TOWING AND ASSISTANCE If Hull coverage is purchased, we automatically include $750 of Towing coverage with the option to purchase up to $2,500. We will reimburse the reasonable expenses incurred to tow to the nearest place where necessary repairs can be made and to deliver fuel, oil, parts or loaned battery (excluding the cost of the items themselves) or emergency labor, while away from a safe harbor or while on land. BOAT HOUSE Up to $150,000 in coverage is available, subject to a deductible of 2% or $250, whichever is greater. Actual cash value coverage applies on a named perils basis for loss caused by fire, lightning, hail, wind, explosion, collision, or vandalism and malicious mischief. Coverage is not available in NC, SC, GA, FL, AL, MS, LA or TX. BOAT LIFT Up to $50,000 in coverage is available, subject to a $500 deductible. We will cover loss or damage to the boat lift, but only if used exclusively for the insured yacht. Coverage applies on a named perils basis for losses caused by fire, lightning, explosion, upset or collision on an Actual Cash Value basis. 15

16 PROTECTION AND INDEMNITY If Protection and Indemnity is provided, coverage is provided for damages that a boat owner becomes liable through the ownership, maintenance or use of the insured yacht or a non-owned yacht. Additionally, wreck removal is provided if Hull coverage is also purchased. Protection and Indemnity limits should be appropriate for the experience of the owner and operator. If a paid Captain or crew member are used only on an incidental basis, coverage is provided for liability incurred under the Jones Act. If a paid Captain or crew is used on more than an incidental basis, the exposure must be recognized within the MAGIC system to appropriately rate the risk. When Crew coverage is added, the paid Captain and paid Crew become an insured under Protection and Indemnity. POLLUTION A base limit of $800,000 is provided. Coverage is designed to protect the insured in case of sudden, accidental and unexpected discharge or spillage of a contaminant from the insured yacht, due to an incident that is specific in place and time and within the policy period. LONGSHORE AND HARBOR WORKERS COMPENSATION Provides coverage an owner incurs arising from the ownership or use of the insured yacht under the Longshore and Harbor Workers Compensation Act. MEDICAL PAYMENTS All policies include $10,000 of Medical Payments coverage at no charge. Higher limit are available to $25,000 which is provided with Helmsman Plus. This provides coverage for the payment of necessary medical and funeral service expenses incurred within one year from the date of an accident causing bodily injury to any person while in, upon, boarding or leaving the insured yacht. UNINSURED AND UNDERINSURED WATERCRAFT If Protection and Indemnity is purchased, Uninsured and Underinsured Watercraft coverage is included; the limit will equal the Protection and Indemnity limit up to a maximum of $2,000,000. This provides coverage for damages an insured person or family member is entitled to receive as a result of an occurrence caused by an uninsured or underinsured watercraft while aboard the insured yacht. POLICY CHANGE If a manuscript endorsement is required during the quote process or while the policy is active, submit to MAIC for consideration. JUDGMENT Allows the user to take into consideration aspects that are not contemplated by the rating factors. Four categories are provided for consideration. If judgment is applied, a supporting reason must also be made within the system. If it is believed that credit is warranted beyond the threshold provided, submit the risk to MAIC for consideration. Navigation/Mooring: Consider congestion, depth of water or other conditions that create additional risk. Conversely, if the boat is only operated on one lake with appropriate water levels and stored on a boat lift, credit may be considered. Boat Characteristics: Consider quality of boat, exceptional safety related equipment, ability to handle rigors of waters navigated. Owner/Operator: Consider all owner attributes, including but not limited to prior losses, overall experience on like type of boat, new purchase vs. owned subject boat for numerous years loss free. Consider financial means to properly maintain as well as safety related courses completed. Safety Course Up to 3% judgment credit may be applied in recognition of completing safety related courses such as US Coast Guard Auxilliary Boating Skills and Seamanship, US Power Squadron Public Boating Course, US Power Squadron Sailboat course or other similar course. Up to 5% credit may be applied for holding a valid US Coast Guard license. A copy of the certificate or license # must be documented. Other: Factors not contemplated above that have inherent associated risk. 16

17 Contact Information Customer Service & Billing Marine Underwriting Claim Department Supplies ext Technical Services ext Marketing ext For instructions on how to maintain a policy, please refer to the MAGIC System Manual. 17