Large craft capsized circumnavigating island, creating distress (5)
I believe the answer is:
trial
'distress' is the definition.
(thesaurus)
'large craft capsized circumnavigating island' is the wordplay.
'large' becomes 'l'.
'craft' becomes 'art' (I've seen this before).
'capsized' shows that the letters should be reversed in order.
'circumnavigating' means one lot of letters goes inside another.
'island' becomes 'i'.
'l'+'art'='lart'
'lart' reversed gives 'tral'.
'tral' placed around 'i' is 'TRIAL'.
'creating' is the link.
(Other definitions for trial that I've seen before include "Legal case" , "Legal hearing" , "competition" , "Judicial hearing and judgment" , "Experimental treatment" .)