A Florida charter company is taking Cincinnati Insurance to court, saying the carrier carved up a single yacht-grounding claim to wriggle out of paying.
The lawsuit, filed on May 1, 2026 in the US District Court for the Southern District of Florida, was brought by Bonus Round Charters LLC over a marine hull policy on a 2017 Ferretti Custom Line Navetta 29. The policy was an agreed-value contract worth $5,240,000 and ran from February 18, 2024 through February 18, 2025.
The story begins in the Bahamas. According to the filing, the yacht ran aground near Bimini on February 9, 2025, was towed back to Fort Lauderdale, and was hauled out for repairs. Bonus Round says Cincinnati treated the grounding as a covered loss, opened a claim, and started paying. So far, so routine.
Then things got complicated. While the boat was apart for repairs, the filing states, latent hull defects came to light - problems Bonus Round says were "not discoverable prior to the haulout and disassembly necessitated by the Grounding repairs," and which the grounding itself made worse. Importantly, the filing notes, the policy "does not exclude coverage for manufacturer's defects or hull defects."
Here is where the dispute sharpens. Rather than treat the grounding and the newly discovered hull problems as one event, Cincinnati allegedly split them into two claims and assigned the hull-defect side a date of loss of "approximately June 2, 2025" - safely outside the policy period. Bonus Round calls that a "manufactured date of loss" and says it set the stage for denial.
The carrier's reservation-of-rights letters are also in the crosshairs. The first, dated July 16, 2025, allegedly raised only one coverage concern: that a pre-existing manufacturer's defect is not an "occurrence" under the policy. A second letter, on July 30, 2025, asked for examinations under oath and documents, but the filing says no examinations ever took place. Both letters, Bonus Round claims, listed a date of loss outside the policy period.
With repairs dragging on, Bonus Round says it sold the yacht for $2,650,000 as mitigation, with Cincinnati's knowledge and consent. The shortfall against the insured value: $2,590,000. On April 3, 2026, the filing says, Cincinnati formally denied the hull-defect claim - and leaned on grounds it had never raised in either reservation letter.
Bonus Round argues the carrier waived those new grounds and is also barred from arguing there was no covered "occurrence," since it had already accepted and paid on the grounding. As the filing puts it, "there was one occurrence and one claim." The suit seeks payment for breach of contract and a court declaration that the combined damage amounts to a total loss.
For insurers and claims teams, the case is a useful flag on familiar pressure points: how an occurrence is defined when one covered event surfaces hidden damage, how date-of-loss decisions are documented, and how tightly reservation-of-rights letters need to be drafted when an insured is making real-world decisions - like selling the asset - based on what they say.
The allegations have not been tested in court. Cincinnati Insurance has not yet filed a response, and no court has ruled.
