Definition of “companion” and “parent or guardian” in guided jet ski tour insurance policies

In a published opinion in Rolando Barreto Nieves et al. v. East Water Sports, LLC and its insurer Universal Insurance Co., 2024 T.S.P.R. 40, the Supreme Court interpreted the scope of a restrictive exclusion clause contained in an insurance policy issued to a company specializing in jet ski guided tours. Specifically, the Supreme Court interpreted the terms “accompanied by” and “parent or guardian” and determined that the exclusion clause in the policy should prevail.  The emphasis on the explicit requirement within the restrictive exclusion clause regarding the presence of a “parent” or “guardian” holds profound significance, particularly in the realm of safeguarding minors in such recreational activities.  By affirming the clarity of the restrictive exclusion clause and its alignment with legal principles aimed at protecting minors, the Court not only upholds the integrity of contractual agreements but also reinforces the broader legal framework governing such activities.  This interpretation not only ensures compliance with relevant laws but also sets a precedent for similar cases, reaffirming the enforceability of restrictive exclusion clauses within insurance policies. In a nutshell, the facts of the case are as follows:

On June 16, 2018, the minor M.B.Z. was celebrating her birthday at the Monserrate Beach in Luquillo, Puerto Rico.  She was with her sister and several classmates. None of the children were accompanied by their parents, relatives, guardians, or any other adult. The group of minors rented several jet skis from East Water Sports LLC. Unfortunately, during the tour, M.B.Z. fell into the water and was immediately struck by another jet ski.  As a result of this event, she lost her life. Her parents and sister filed a Complaint seeking damages against East Coast Company LLC and Universal Insurance Co.  The insurer filed a motion for summary judgment.  Among the arguments set forth, the insurer highlighted that the policy contained several endorsements with restrictive conditions that limited the coverage provided.  The insurer cited the following restrictive endorsement:

This endorsement changes the policy

Please Read it Carefully

Condition for Minors

“It is hereby understood and agreed that children between the ages of 6 and 18 years of age must be accompanied by a parent or guardian, in order to comply with the policy”.

After a thorough analysis of the policy, definitions, and its provisions, as they have been used in the Navigation and Water Safety Law of Puerto Rico, Law No. 430-2000, 12 L.P.R.A. sec. 1401 et seq. (Law No. 430-2000), the Puerto Rico Traffic Vehicles Law, Law No. 22-2000, 9 LPRA sec. 5001 et seq. (Law No. 22-2000), and in accordance with the interpretive framework for insurance contracts and their exclusion clauses, the Supreme Court concluded that the term “accompanied by” used in the insurance contract refers to the direct supervision of a “parent or guardian” on the jet ski with the minor. As a result, tour guide employees cannot be classified as guardians or individuals responsible for minors who have rented jet ski services.

The Court concluded that the clause in question was not ambiguous, on the contrary, it was evident that the minor must be accompanied specifically by a “parent or guardian,” with no provision allowing for any other adult to accompany them, let alone employees responsible for tour routes. This interpretation not only upholds the clear intent of the contractual agreement but also aligns with the overarching legal principle of ensuring the safety and welfare of minors in such recreational activities, since the failure to apply the exclusion would perpetuate the fact that insurers would provide coverage for such a highly regulated activity. Consequently, the case against the insurer was dismissed.