Bobby owns his own private four-seat aircraft, which he has insured with a standard hull and liability policy, with limitations of $1 million total liability, and $100,000 per passenger. Bobby has known Joe for 20 years. Joe is a certificated pilot and seeks to borrow Bobby's plane for a few weekends. Bobby does not object and lends his plane to Joe, free of charge. On one of the weekends, Joe agrees to transport one of Fred's spare engines from Chicago to Peoria in exchange for the price of oil, gas and $250.00 cash. Upon departure, burdened by the extra weight, Joe fails to clear the trees at the end of the runway, crashes and totally destroys Bobby's aircraft as well as Fred's spare engine. Bobby promptly filed a claim with his insurance company seeking indemnification for his loss, but the company denied the claim. Which of the following BEST explains the company's basis for denying the claim?
a Joe was not a "named insured," thus protection did not extend to him.
b Joe's qualifications did not fall within the "pilot warranty" in Item 7 of the Declarations.
c This event was set forth in the Exclusions portion of the policy and the insurance company met its burden of proving that facts giving rise to the exclusion actually occurred.
d The use of the aircraft was illegal because it was the unauthorized furnishing of transportation by air for hire.
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