C: 1dominionpatio1a.com/docs/financials/2004-08 -- State Farm Insurance...j ,.- Agent 0611 992 Your policy consists of this pagce, ... cannot be replaced with duplicate material of

Policy Number DECLARATIONS PAGE! COVERAGE SUMMARY

93-B2-0621-3 DEC 22 2004 STATE FARM FIRE AND CASUALTY COMPANY

2.702 IRELAND GRlOVE RD, BLOOMINGTON IL 61709-0001 /iSTOCK COMPANY WITH HOME OFFICES IN RLOOMINGTON, ILLINOIS - - -

Loan # 18OO25l604 Named Insured and Aiailing Address Ffflortgagee

l753-FO12l H DOMINION PATIO HOMES CONDOMINIUM ASSN NO I-A 21 5 WILLIAM ST BENSENVILLE IL 60106-3324

WELLS FARGO BANK NA #472 ITS SUCC AND/OR ASSIGNS PO BOX 23000 JACKSONVILLE FL 32241 -3000

CONDO/ ASSOC POLICY - SPECIAL FORM 3 Unflation Coverage Index: 190.4 AUTOMATIC RENEWAL - If the POLICY PERIOD is shown as 12 MONTHS, this oiic will be renewed automaticall r

C: give you and t e Mortgagee/L~enholder wrltten nottce in compl~ance wdh the pol~cy provmons or as requwd by law. 1 subject to the rerniums, ruleg and forms [n effectforeach succeedin! policy period) I! &is policy is teryinated, we wi I

Policy Period: 12 Months The poky period begins and en~ds at 12:01 am standard time at the ~ f f e c t i v e Date: AUG 16 2004 prern~ses locat~on. Expiration Date: AUG 16 2005 - Named Insured. CONDO MI NIL^^ ASSOCIATION

Location of Covered Premists:

**See Schedule Page(s) f o r Locat ion o f Premises and Sect ion I Coverage In fo rmat ion

Coverages & Property Limits of Insurance Section I

A Buildings €3 Business Personal Property

$ ** Exc 1 uded

Section II L Business Liability M Medical Payments 5,000 Products-Completed Operatio~ns

% l ~ O O o y o o O $ 2,000,000

(PCO) Aggregate General Aggregate (Other $ 2,000,000 Than PCOj

Forms, Options, and ~ n d o z e r n e n t s S~ecial Form 3 FP-6 1 09 - - - ~mendatory Endorsement FE-I32 1 3 Policy Endorsement FE-6466 Terrorism Insurance Cov Notice FE-15999 Fungus (Includrng Mold) Exct FE-66 1 6 Interior Building Damage FE-16379 Policy Endorsement-Condo/Asn FE-15624

Continued on Reverse Side of Paae

DeducAibles - Section I

$ 1,000 Basic

In case of loss under this policy, the deductible will be applmd to each occurrence and will be deducted from the amount of the loss. Other deductibles may apply - refer to policy. -

Policy Premium $ 6,853.00

Disco~mts Applied: Renewal Year Multiple Unit Claim Record

O T H ~ R LIMITS AND EXCLUSIOI\IS MAY APPLY' - REFER TO YOUR POLICY - Prepared /

DEC 22 2004 Counter~igt&?d_,~* k L: .? / b X - FP-80 10.3C GYFX BY L& f':! F , 3 , ?. j ,.- Agent 0611 992 Your policy consists of this pagce, any endorsements JOHN CRAVTR.

(630) 766-6664 and the policy form. PLEASE KE:EP THESE TOGETHIER.

(o 112172b)

Policy Number 93-62-0621-3

SCHEDULE PAGE

STATE FARM FIFLE AND CASUALTY COMPANY 2'702 IRELAND GROVE RD, BLOObIlNGTOl\l IL 61709-0001 A STOCK COMPANY WITH HOME OFFICES IN BLOOMINGTON, ILLINOIS

Named Insured and Mailing Address 1753-F021 H

DOMINION PATIO HOFk'1ES CONDOMINlUI\II ASSN NO 1-A 215 WILLIAM ST BENSENVILLE IL 601 06-3324

EFFECTIVE DATE AUG 16 2004

CONDO/ ASSOC POLICY - SPECIAL FORM 3

Location Number

1.

LocaT.l;on of Premises

311-317 DOMINION DR WOOD DALE IL 60191-2.312

321-327 DOMINION DR WOOD DALE IL 60191-2312

331-333 DOMINION DR WOOD DALE IL 60191--2312

341-3847 DOMINION DR WOOD DALE IL 60191--2312




482-484 DOMINION DR WOD DALE IL 6C19!-23S1

Limit of Insurance

Building

$ 697,100

Prepared DEC 22 2004

C C ~ P J D G M I M I U M / P . S S ~ C I A T ~ ~ ~ ~ POLfCY - SPEClAL F O W ~ J ~ 3 TABLE OF CONTENTS

DECLARATIONS Ncmed insured L~mits 13f insurance Locat~on of Covered Premises Coverages and Property PC l ~cy Per~od Oeducl ibies

AGREEMENT DEFlNlTlONS

SECTION I PROPERTY COVEI'IAG ES

Coverage A - Buildings Coverage B - Business Personal Property Propert-y Not Covered Proper1.y Subject To Limitations l nflation Coverage

LOSSES lNSURECb AND LOSSES NOT lNSURED Losses Insured Losses Noi 1nsu1-ed

EXTENSIONS OF {COVERAGE

0 PTIONAL COVERAGES Optional Coverages

OPTION ED - Employee Dishonesty OPTION ES -. Exterior Signs OPTION MB .-Mechanical Breakdown OPTION M O - Money And Securities OPTION TP . Trees, Plants. Lawns And Shrubs

DEDUCTIBLES

CONDITIONS

SECTION ! I COMPREHENSIVE BUSINESS LIABILITY

Coverage L - Business Liability Right ,And Duty To Defend Supplementary Payments Business Liability Exclusions

PROPERlY D A M A G E LEGAL LIABIL.ITY

MEDICAL P A Y M EiNTS Coverage M - Rlledicai Payments Medical Payments Exclusions

OPTIONAL COVERAGE- Optional Coverage

OPTION DO - Directors And Officers Liability

BUSINESS LIABII-IT'Y A N D MEDICALL PAYMENTS NUCLEAR LIABfLITY EXCLUSION!;

Nuclear Liabji~tv Exclusions

DESIGNATION OF INSURED Who Is An Insured

BUSINESS LIABIILITY A N D MEDICAL PAYMENTS LIMITS 'OF INSURANCE

Limits Of Insurance

GENERAL CONDlTlONS

DEFIN1TI;ONS

SECTION I A N D SECTION 11 C O M M O N CONDITIONS

Beginning on Page i i

lnciudes c:opyr~ghted material of %are Farm Fire and Casualty Company. Copyright, State Farm fir^ and Casualty Company, !983.

And also, Includes copyrighted matariat of Insurance Services Of f ice with its permission

Copyrighr. Insurance Services Office, Inc., 1!382, 1963. 1984, 1985, 1986.

Printed in U S A .

AGREEMENT: W e agree to provide the insurance described in this pol icy You agree t o pay premiurns when due and comply w i th thc provisions of this pol icy.

DEFINITIONS: Throughout t h s policy, the vvords "you" and"your" refer t o the Named Insured shown in the Declarations and any other person or organization qk~alifying as a Named Insured under this policy. Declarations include the policy Declarations, supplemental Declarations pages, any amendments thereto, the rrost recent renewal notice or certificate, o r a n y endorsement c h a n ~ i n g any of these. The words "we", "us" and "our" refer t o the Cornpany providing this insurance.

Each time the phrase "Specified Causes of 1-oss" is used in this policy, it refers t c all of the fo l lowing causes:

fire;

lightning;

explosion;

windstorm or hail;

smoke;

aircraft or vehicles;

riot or civi l coniniotion;

vandalism;

leakage f rom fire extinguishing equipment;

sinkhole collapse, meaning the sudden sinking or collapse of land into underground emply spaces created by the action of water o n limestone or similar rock formations b u t does not inc lude the cost o f f i l l ing sinkholes;

volcanic actlon, meaning the airborne volcanic blast o r airborne shock waves, lava f low, ash, dust or particulate matter resulting f rom the eruption of a volcano but does no t include the cost o f removing ash, dust or part~culate matter that does not cause accidental direct physical loss to covered property;

falling objects, no t including loss to :

a. personal property in the open; or

b. t he interior of a bui lding or structure, or property inside a bui lding or structure, unless the roof or an outside wal l of the building or srructure is first damaged by a falling object;

weight o f snow, ice or sleet;

water damage, meaning accidental discharge or leakage o f water or steam as the direct result of the breaking or cracking o f any part of a system or appliance con ta~n ing water or stearn.

FORM 3

SECTION I PROPERTY COVERAGES --- - -7

COVERAGE A - B U I L D I N G S

When a lirnit of insurance is shown i n the Declarations for Coverage A, w e will pay for acc~dental direct physical loss to buildings, at the premises described in 1.he Decla- rations caused by an insured loss. Buildings, meaning buildings and structures, include the followinla types of property at the described premises:

garages, storage buildings, completed additions, swimming pook, fences, retaining walls and other appurtenant structuras;

permanently installed tixtures, machinery and equipment;

personal property owned by you that IS used t o ma~ntain or service t t e bul ldings or t l ie premises, rncluding:

a. fire ext inguishi~ic equipment; and

b. outdoor furniture or fixtures;

additions under construction, alterations and repairs t o the buildings if no t covered by otheir insurance;

any 01 the! fo l lowing types o f property contained wi thm a unit, regardless of ownership, if your Condominium/Association Agreement requires you t o insure it:

a. fixtures, improvements and alterations that are a pan of the building or structure: and

b. - appliances, such as those used for refrigerating, ventilating, cooking, dishwashing, laundering, security or housekeeping;

materials, equipment, supplies and temporary srructures. on or w~. th in 100 feet of the described premises, l ~ s e d for making additions, aiterations or repairs to .the building:; or structures if not covered by other insurance.

COVERAGE B - B U S I N E S S PERSONAI- PROPERTY

When a limit of insuranc.e is shown in the D8eclarations for Coverage 8, w e wi l l pay for accidental direct physical loss t o business personal property at the premises described ~n the Declarations caused b y an insured loss. Business personal properry includes the following types of property loc:ated in or on the buildings at the de-

scribed premises or in the open (or in a vehicle) on or w i th in 100 feet of the described premises:

1. property you own;

2. property of others that is in your care, custody or control. However, this property is no t covered for more than the amount for wh ich you are legally liable, plus the cost of labor, materials or services furnished or arranged by you on property of others; and

3. property in wh ich each of the condominium unit- owners has an undivided interest including interest in personal property owned by others.

PROPERTY N O T COVERED

This pol icy does not cover:

2. automobiles, motor trucks and other vehicles subject t o motor vehicle registration;

3. vvatercraft ( including motors, equipment and ac- cessories) whi le af!oat;

4. rnoney or securities, except as provided in the Op- tional Coverages;

5. contraband, or property in the course of illegal transportation or trade;

6. land ( including land o n which the property IS 1 0 - cated) or any costs required to replace, rebuild, ex- ciavate, grade, backfill, fill, stabilize or otherwise restore the land, except as provided i n the Extensions of Coverage;

7 . natural water or growing crops;

8. exterior signs, except as provided in the Extensions of Coverage:

9 , an~mals, except as provided in the Property Subject 10 Limitations:

10. t.he cost t o research, replace or restore the informa- 1:ion o n valuable papers and records, including t.hose wh ich exist o n electronic or magnetic media, t:xcept as p r ~ v i d e d in the Extensions of Coverage;

11. Prees, plants, lawns and shrubs, except as provided in the Extensions of Coverage;

FORM 3

SECTION I PROPERTY COVERAGES ( c o n t . ) --- - -7

12 . property that is c13vered under anolhler coverage form of this or any other policy in wh ich i t is more specifically described, except for the excess o f the amount due (whether you can collect on it or not) from that other ins~~rance; or

13 . personal pro'perty owned by a un i t -owner excepi as provided in Coverage B - Business Personal Property.

- - -

PROPERTY SUBJECT T O L I M I T A T I O N S

We w ~ l l no t pay for loss:

1. t o valuat~le papers and records, such as books of account, manuscripts, abstracts, drawings, card in - dex systems, film, tape, disc, drum, cel l or other electronic, data ptocessing, recording or storage media, and other records, caused by any error in programming. But i f loss to papers or records, including those which exist o n electronic or magnetic media, is caused try any orher insured loss, w e wi l l pay either:

a. the cost of replacing the papers or records w i t h duplica1.e~ of like k ind and quality, such as prepackaged software programs, i f duplicate material is available on th~? current retail market; or

b. the cost of unexposed or blank material for reproducing the papers or records, if they cannot be replaced w i th duplicate material of like kind and quality;

2. t o fragile articles, such as glassware, statuary, marbles, chinaware, porcelains, bric-a-brac and other articles o f a brittle nature, if broken, unless caused by any of the "Specified Causes o f Loss" or by bui ld ing glass breakage. This limitation does not apply to:

a. glass that is part of a bui ld ing or structure;

b. bot:tles or siinilar containers 011 property held for sale or sold bu t n o t delivered; or

c. lenses o f photographic or scientific instruments;

3, by theft of the fo l lowing types of property for more than the limits shown in any one oc,cwrrence:

a. 52,500 for furs, fur garments and garments tr immed w i th fur;

b. $2,500 for jeweiry, watches, watch m o w . ments, jewels, pearls, precious and semi- precious stones, bullion, gold, silver, plat inum and other precious alloys or metals. This limit does not apply t o jewelry and watches wor th $1 00 or less per item;

c. $2,500 for patterns, dies, moids and Forms; and

d. $250 for stamps, tickets and letters of credit;

4. .to animals wh ich are:

a. owned by you as merchandise held in storage or for sale wh i le inside o f buildings; or

b. owned -by others and boarded by you:

unless caused by any of the "Specified Causes of Loss" or bui lding glass breakage and then only i f they are killed or their destruction is made necessary, or by theft,.

5. to bridges, roadways, driveways, walKs, patios or other paved surfaces. fences, outdoor swimming pools and related equipment. retaining walls, bulkheads, pilings, piers, wharves, docks and underground pipes, flues or drains caused by:

a. freezing or thawing:

b. impact of watercraft; or

c. the pressure or weight o f ice or water whether driven b y w ind or not;

6. to the interior o f any building or stru'cture, or the property ~ns ide any building or structure, caused by rain, snow, sleet, ice, sand or dust, whether driven b y w i n d or not, unless:

a. the bui ld ing or structure first sustains damage b y an insured loss to its roof or wal ls through wh ich the rain, snow, sleet, ice, sand or dust enters; or

b. the loss is caused b y thawing of snow, sleet or ice o n the building or structure;

7. t o steam boilers, steam pipes, steam e n ~ i n e s or steam turbines caused by any c o n d ~ t i o n or event inside such equipment. But w e wi l l pay for loss to such equipment caused by an .explosion of gases or fuel wi th in the furnace of any fired vessel or wi th in the flues or passages through w h i c h the gases of combustion pass;

3 FORM 3

SECT!ON I PROPERTY COVERAGES (cont. :I -

8. t o hot watler boilers or oiher water heating equip- by the applicable ln f la t~on Coverage Index shown In the - . . ment, air condit ioning units or refrigerating units caused by any condit ion or event inside such boilers or equipment, other than an explosion;

9. t o personal property in the open caused by rain, snow, sleet or ice;

10. t o gutters and d o w n s ~ o u t s caused by weight of snow, sleet or ice.

INFLATION COVERAGE

The limits of insurance specified in the Declarations of this pol lcy for Coverage A - Buildings and Coverage B - Business Personal Property w i l l automatic,ally increase

Declarations

To determine the limits o f insurance on a particular date, the Index level available on that date wi l l be divided by the Index level as o f the effective date of this inflation coverage provision and the resulting factor mult ipl ied by the limits o f insurance for Coverage A and Coverage B separately. In n o event w i l l the limits of insurance be re- duced .to less than those shown in the Deciarations or most recent renewal notlce, whichever is greater.

If during the .term of this pol icy the l imit of insurance for Coverage A or Coverage B is changed a l your request, the effectlve date o f this inflation coverage provision IS

amended t o coincide w i t h the effective date of such change,

SECTION I LOSSES INSURED ARID LOSSES NOT INSURED

LOSSES INSURED

W e insure for accidental direct physical Ios :~ 1:o property covered under t h ~ s policy u i less the loss is:

1 . limited in the PROPERTY SUBJECT T O L IMI - TATIONS section; or

2. excluded i n the LO.SSES NOT INSURIED section that follow/s.

LOSSES NOT INSURED

1. We d o no t insure under any coverage for any loss wh ich wou ld not have occurred in the absence o f one or more of the f o l l o w ~ n g excludeld events. We d o not insure for such loss regardless of. (a) the cause of the excluded event; or (b ) o t h ~ r causes of the loss; or (c ) whether other causes acted con- currently or i n any sequence wi th .the excluded event to produce the loss:

whether c o m b ~ n e d w i th water or no t Earth movement includes but is no t l ~m i ted to earthquake, landslide, erosion, and subsidence bu t does not include sinkhole collapse.

But if accidental direct physical loss by fire.. explosion other than explosion of a volcano, theft or bui lding glass breakage results, we wi l l pay for that resulting loss;

c. volcanic eruption, explosion or effusion. But i f accidental direct physical loss b y fire, explosion other than explosion of a volcano. theft, bui lding glass breakage or "volcanic action" results, w e wi l l pay for that resulting loss.

"Volcanic action" means accidental direci physical loss to covered property resulting from the eruptlon of a volcano when the loss is caused by:

(1) airborne volcanic blast or airborne shock waves;

the enforcement o f any ordinancle or law: (2) ash, dust or particulate matter; or

(1) regulating the construction, use or repair of any property; or

(2) requiring the tearing d o w n of any property, ~ n c ~ u d i n g the cost of removing ~ t s debrls;

b. earth movement, meaning the s~nking, rising, shifting, exvanding or contracting o f earth, all

(3) lava f l ow

A l l volcanic eruptions thai occur wi th in any 72-hour period w i l l constitute a single occurrence.

We w i l l no t pay io r the cost of removing ash, dus; or particulate matter resulting from the

SECTION 1 LOSSES I!NSURECS AND LOSSES NOT INSLJRED (con t . ) --- -"-

d. vvater, such as:

(1 ) flood, surface water, waves, tides, tidal waves, overf low o f any body of water or their spray, all whether driven by w ind or not;

h. war and military action, inc luding:

(1 ) undeclared c r civi l war;

(2) warlike action by a military force, including action in hindering or defending against an actual or expected attack by any government, sovereign or other authority using military personnel or other agents; or

(2 ) mudsltde or mudf low; (31 insurrection, rebellion, revolution,

(3) natural water be low the surface of the ground, including wai:er wh ich exerts pressure on, or seeps or leaks through:

usurped power or action taken b y governmental authority i n hindering or defending against any of these.

e. seizure or destruction o f property b y order o f governmental authority.

i3ut we w i l l pay for acts of destruction ordered by governmental authority and taken at the 1:irne of a fire t o prevent its spread, if the fire wou ld be covered under this policy;

f. nuclear hi3zard, meaning any nuclear reaction, radiation or radioactive cor~tamination, all whether controlled or unccrntrolled or h o w - ever caused, or any consequence of any o f ithese. Loss caused by the nuctear hazard w i l l no t be considered loss caused by fire, explo-

eruption of a volcano that does not cause accidental direct phys~cal loss .to covered property;

(a) . foundations, walls, -floors or paved 2. We d o no t insure for loss either consisting of, or surfaces; directly and immediately caused by, one or more of

the fol lowing: (b) basements, whether paved or not;

o r a. artificially generated electric current, inc luding electric arcing, that disturbs electrical devices,

(c ) doors, w indows or other openings. appliances or wires.

13ut i f acc:idental direct phy'sical loss by fire, But if accidental direct physical loss by fire c?xplosion, theft, bui lding glass breakage or results, w e w i l l pay for that resulting loss; leakage 0'1 water from a fire protective system results, w e wi l l pay for that resulting loss;

b. delay, loss of use or loss of market;

:;ion or smoke.

But if k c l d e n t a l d~ rec t physical loss b y fire ~results, w e wi l l pay for that resulting loss;

the failure of power or other util ity service asupplied to the described premises, however caused, if the failure occurs away from the described premises.

But i f accidental d~ rec t physical loss by an i n - sured loss results, w e w i l l pay for that resulting loss;

c. smoke, vapor or gas f rom agricultural smudg- ing or industrial operations;

d. smog, wear, tear, rust- corrosion, funnus, mold, decay, deterioration, hidaen or latenr defect or any quality in property that cause:; it

to damage or destroy itself.

But if accidental direct physical loss by any of the "Specified Causes of Loss" or b y building glass breakage results, w e w ~ l l pay fo r that resulting loss;

e. the presence, release, discharge or dispersal of pollutants, meaning any solid, liquid. gaseous or thermal irritant-or contaminant, in - cluding vapor, soot, fumes, acid.s, alkalis. chemicals and waste, except as provided in the Pollutant Clean U p and Removal Exten- sion of Coverage.

But if accidental direct physical loss b y any of the "Specified Causes of Loss" or b y building gtass breakage results, we will pay for that resulting loss:

5 FORM 3

SECTION I L O S S E S lNS14RE;D AND LOSSES NOT INSURED (cont.) -

f. settling, cracking, shrinking, bulg ing or expansion.

But if acc:idental direct physical loss by any of the "Specified Causes of Loss" or by building glass breakage results, w e w i l l pay for that resulting loss;

g. insects, birds, rodents or other animals.

But if accidental direct physical loss by any of the "Specified Causes of Loss" or b y building glass breakage results, w e w i l l pay for that resulting loss;

h. mechanical breakdown, including rupture or bursting caused by centrifugal-force.

But if accidental direct physical loss by any of the "Specified Causes of Loss" or by building glass breakage results, w e w i l l Flay for that resulting toss;

i. causes o f loss t o pc:rsonal property:

(1) dampness or dryness of atmosphere;

(2 ) changes in or extremes of temperature; or

(3 ) marring or scratching.

But if aclcidental direct physical loss by any of the "Specified Causes of Loss" or by building glass breakage results, w e w i l l pay for that resulting loss;

j . explosion of steam boilers, steam pipes, steam engines or steam turbines owned or 1cta:ied by you, or operated under your control.

But if accidental direct physical loss by fire or cornbusti~on explosion results, we wi l l pay for that resulting loss. We w i l l also pay for loss caused by the explosion of gases or fuel w i th in the furnace of any fired vessel or w i th in the flues or passages through wh ich the gases o f combustion pass;

k , continuous or repeated seepage or leakage of water that occurs over a period of time;

I. water that leaks or f lows from plumbing. heating, air conditioning or other equipment

(except fire protective systems) caused by freezing, unless:

( I ) you do your best t o maintain heat i n the building or structure; or

( 2 ) you drain the equipment and shut off the water supply if the heat is no t maintained;

m. dishonest or criminal act occurring at any time 13y you, any of your partners, employees, directors, trustees, authorized representatives or anyone t o whom you entrust the property for any purpose whether acting alone or in ~ o \ l u s i o n w i th others. '

This exclusion does not apply t o acts o f de- :;truction by your employees; but theft by em- lployees is no t covered;

n. voluntary parting w i th any property b y you or anyone else t o whom you have entrusted The property if induced to d o so by any fraudulent scheme, trick, device or false pretense;

o. unexplained or mysterious disappearance of property, or shortage of property disclosed on taking inventory.

p. collapse, except as provided in the Extensions of Coverage.

But if accidental direct physical loss b y an insured loss results at the described premises, w e w i l l pay for that resulting loss.

3 . W e do not insure under any coverage for any loss consisting o.f one or more of the items below. Fur- ther, vve d o not insure for loss described in paragraphs 1. and 2. immediately above regardless of whether one or more of the fol lowing: (a) directly or indirectly cause, contribute t o or aggravate the loss; or (b ) occur before, at the same time, or after the loss or any other cause of the loss:

a. conduct, acts or decisions, inctuding the failure t o act or decide, of any person, group, organization or governmental body whether In- tentional, wrongful, negligent or without fault;

b. faulty, inadequate, unsound or defective:

(1 ) planning, zoning, development, surveying, s i t~ng:

FORM 3

SECTlOhl I LOSSES INSURED A N D LOSSES NOT INSIJRED ( c a n t . ) - - -

(2) design. specif~catrons, workmanship, re- of part or all of any ploperty ( lnc ludlng land, pair, construction, renovation, remodel- structures or improvements of any k ~ n d ) on or ing, grad~ng, compaction; off the described premises.

(3) materials used in repair, construction, But i f accidental direct physical loss results from renovation or remodeling; or items 3.a. and 3.b.. w e wi l l pay fo r that resulting

loss wnless the resulting loss is itself one of the (4) maintenance; losses no t insured in this section.

- ---- SECTION I E X T E N S I O I V S OF COVERAGE - -. EXTENSIONS OF C O V E R A G E

Subject to the terms and condit ions applicable to Section I of this polilcy, the fo l lowing Extensions of Coverage apply separalely t o each location scheduled in the Declarations. But the amount of insurance afforded on any one sctheduled location w i l l no t be more than the limit of insurance specified i n each Extensi i~n of Cover- age if a limit is included in the extension.

1. D e b r i s Remova l .

a. We w i l l pay your expense t o remove debris of covered property caused by an insured loss that occurs during the policy period. The expenses w i l l be paid only i f they are reported to us w i th in 180 days after either the date of accidental d,irect physical loss or the termination of this policy, whichever is earlier.

b. This most w e wi l l pay for debris removal expense is 25Yj of the sum of the amount w e pay for the acclclental direct physical loss plus the deductible i n this policy applicable t o that loss.

But if:

(1:) the sum of loss and debris removal expense (exceeds the Coverage A avd Cov- erage t3 l imit of insurance; or

( 2 ) the debris removal expense exceeds the amount payable under the 25% debrrs removal coverage limitation described in paragraph b. above;

w e w i l l pay up t o an additional $5,000 for ealch location in any one occurrence for debris removal expense.

c. This Extension of Coverage does not apply t o costs to :

(1) extract pollutants (meaning any solid. liquid, gaseous or thermal irritant or contaminant, including vapor, soot. fumes, acids, alkalis, chemicals and waste) f rom land or water, or

(2 ) remove, restore or replace polluted land or water.

P r e s e r v a t i o n of P r o p e r t y . We w i l l pay for any accidental direct physical loss t o covered property whi le it is being moved or whi le temporarily stored at another location only if:

a. it is necessary t o move the property from the described premises t o preserve it f rom loss by an insured loss; and

b. the loss occurs w i t h ~ n 10 days after the property is first moved.

F i r e D e p a r t m e n t S e r v i c e C h a r g e . W e wi l l pay up to $1,000, as an additional amount of Insurance, for your liability for f ~ r e department service charges assumed by contract or agreement prior t o loss or requ~red by local ordinance when the fire department is called t o save or protect covered property from an ~nsured loss.

Co l l apse

a. W e w i l l pay for any accidental direct physical loss t o covered property involving collapse o f a bui lding or any part of a bui ld ing caused only b y one or more of the fo l lowing:

(1 ) any o f the "Specified Causes of Loss" or breakage of bui lding glass, only as i n - sured against in this policy;

(2 ) hidden decay:

FORM 3

SECTION 1 EXTEhlSlONS OF: COVERAGE ( c o n t . ) -- -- --

hidden insect or vermin damage;

weight of people or personal property;

weight of rain that collects on a. roof;

use of defective material or methods in con~struction, remodeling or renlovation if the collapse occurs during the course of the construction, remodeling or renovation.

b. W e will not pay fcrr loss to the fo l lowing types of property caused b y items a.(2). ( 3 ) . (4), (5) and (6) above unless the loss is a direct result of the collapse o f a building:

awnings, guyters and downspout!;;

yard fixtures, fenccs. outdoor swimming pools, piers, Wharves and dock:;;

beach or d iv ing platforms crr appur- tenances:

retaining w8alls, walks, roadways and other paved surfaces.

c. Collapse: does not include settling, cracking, shrinking, bulging! or expansion.

W a t e r Damage. I f loss caused by a covered water damage loss occurs, w e w i l l also pay the cost t o tear ouf and replace any part of the building or structure r e q ~ ~ i r e d to re:pair the damaged system or appliance.frorn wh ich the water or steam escapes.

We wi l l not pay the cost of repairing or replacing the damaged system or. appliance itself, But w e w i l l pay the cost t o repair or replace damaged parts of fire extinguishing equipment i f thc fire equipment damage.

a is directly caused by freezing; or

b. results i l l sprinkler leakage.

Ex t ra Experise. W e will pay u p to $5,000, as an additional amount of insurance, for the necessary exrra expense you incur t o avoid or minirnize the suspension {of Your business and to continue normal operations wh ich are interrupted ,as a result of accidental direct ph~ysical loss to cover~:d property at the described premises caused by i3n insured loss.

This Extension of Coverage appl~es only during the time required far the damaged property at the de- scr~bed premises t o be repaired, rebu~ l t or replaced w i t h reasonable speed and similar quali ty in order to restore normal business operations.

P o l l u t a n t C lean Up a n d Remova l . We wi l l pay your expense to extract "pollutants" f rom land or watler at the descrtbed premises if t he release, discharge or dispeasal of the "pollutants" is caused by an insured loss -that occurs dur ing the pol icy period. The expenses wi l l be paid only i f they are reported to us w i th in 180 days after either the date of accidental direct physical loss or the termination of this policy, whichever is earlier.

The most wevtri l l pay for each location under this Extension of Coverage is $10,000, as an additional amount of insurance, for the sum of all such expenses arising out o f insured losses occurring dur- i c y each separate 12 mon th period o f this poiicy.

"Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, inc luding vapor, s0o.t. fumes, acids, alkalis, chemicals and waste. Waste includes materials t o be recycled, recondi- t ioned or reclaimed.

A r s o n R e w a r d . W e w i l l pay a reward in the amount o f $5,000, as an add~t iona l amount of i n - surance, for information wh ich leads t o an arson convict ion in connection w i th a fire loss covered under th is policy. Regardless of the number of persons involved in providing information, the most we w i l l pay in any one occurrence under this Ex- tension of Coverage is $5,000.

F i r e Extinguisher Recharge . We w i ! l pay the expense you incur, a s a n additional amount of in - surance, ro recharge a portable fire extinguisher when it has been used t o combat a covered fire.

M a i n t e n a n c e Fees Rece i vab le . W e will pay you for maintenance fees you have been unable, after reasonable effort, t o collect from the uni t -owner whose un i t must be rendered untenantable due t o an insured loss that occurs during the policy period.

After payment of loss, al l amounts recovered shall be paid t o us after you have recovered any loss o f maihtenance fees in excess of the coverage provided by this extension.

You w i l l cooperate w i th us t o recover unpaid maintenance fees. You w i l l n o i waive your i ight t o recover maintenance fees receivable wilhout our permission.

8 FORM 3

-- --

SECTION I EXTENSIONS OF COVERAGE (cont.) - -7- v --

This coverage applies only during the r ime reason- premises under this Extension of Coverage is ably requ~red t o restore the affected units to a $5,000 as an additional amount of insurance. tenantable condit ion.

13. N e w l y A c q u i r e d B u i l d i n g s a n d Bus iness Per- The most w e wi l l pay in any one occurrence is- s o n a l P r o p e r t y . $1 00.000, as an additional amount of insurance.

a. You may extend the insurance that applies t o 11. A c c o u n t s Rece ivab le . Coverage A - Buildings t o apply to:

a. We wi l l pay fisr the fo l lowing that results from accidental direct physical loss caused by an insured loss t o your records of accounts receivable at rhe described premises:

(1 ) all amounts due from your customers that you are unable t o collect;

( 2 ) interest charges on any lo,an required to offset arnounts you are unable t o collect pending repayment o f these amounts;

(3) collecticln expenses in excess o f your normal c:ollection expenses that are made necessary by loss;

(4) other reasonable expenses that you incur to re-establish your records o f accounts receivable.

b. The most w e w i l l pay in any one occurrence under this Extens~on of Coverage is $50,000, as an addit i lmal amount of ilnsurance. and applies only w h ~ l e records of accounts receivable are contained in the described premises, except whi le the records are:

(1 ) in actual use: or

(2 ) being removed t o a piace o f safety because of imminent danger of loss and whi le being returned t o the described premises.

c. Any loss payable under Extension 1 O., Main- tenance Fees Receivable, is excluded under this Extension o f Coverage.

12 . Va luab le Papers a n d Reco rds . We w i l l pay your expense to research, replace or restore the lost in - formation o n valuable papers and records, including those wh ich exist o n electronic or magnetic media, for w h i c h duplicales do not exist. The most w e wi l l pay in any one occurrence at each described

(I) your n e w buildings or new additions whi le being constructed on the described premises; or

( 2 ) buildings you acquire at locations other than the described premises, intended for similar use as the bui ld ing described in the Declarations or for use as a ware- house.

The most w e wi l l pay for loss under this extension, as an additional amount of insurance, is 50% of the l imit of insurance shown in the Declarations for Coverage A - Buildings bu t not more than $250,000 for each building.

b. You may extend the insurance that applies t o Coverage B - Business Personal Property to apply t o that property at any location you acquire.

The most we wi l l pay for loss under this extension, as an additional amount of insurance, is 50% of the l imit of insurance shown in the Declarations for Coverage B - Business Per- sonal Property b u t not more than $100,000 at each premises.

c. Insurance provided under this extension is limited to a period o f 9 0 days from the date:

(1 ) construction begins;

(2 ) you report the values of new con - struction t o us;

(3) you acquire new buildings or business personal property;

whichever occurs first

We wi l l charge you additional premium for values reported f rom the date construction begins or you acquire the property.

FORM 3

SECTION I EXTENSIONS OF COVERAGE (cont . j -- - --

Elevator Collision. We wi l l pay for any direct physical loss to the following property caused by accidental collisior! of arry part of an elevator or of anything carried on the elevator with another. part of the elevator crr with ar~other object:

a, elevators;

b. any other property you own, occupy, use or rent;

c. property of others that is in your care, cu!jtody or control for business purposes and for vvhich you are liable.

The most we wi l l pay for loss under this extension. as a n additional amount of insurance, is 25% of the limits of insurance shovvln in the: Declacatiorls for Coverage A - Buildinos and Coverage 8 - Business Personal Property but no1 more ihan $50,000 in any one occurrence.

P rope r t y Of f Premises. We wi l l pay L I ~ to $15,000 in any one occurrence, as an additional amount of insurance, for any accidental direct physical loss to covered property while tempclrarily located a t another premises in the United States of America, Puerto Rico and Canada caused by an insured loss.

The insurance provided under thrs extension applies only for a period of 90 days to covered property located at another premises you own, lease, operate or regularly use.

This Extension of Coverage does not apply to covered property while in transit.

P roper ty i n Trans i t . VVe wi l l pay up to the following limits, 21s additional amounts of insurance, for any accidental direct physical loss to covered property owneci by you while in transit more than 100 feet from the described premises:

a. $1,000 in any one occurrence for lc~ss or d-amage cisused by theft; or

b. $1 5,000 in any one occurrence for loss caused by any other insured loss, flood, earthquake, volcanic eruption, landslide or collision (except contact with the roadbed), derailment, overturn or up!;et of a transporting conveyance.

your officers, your partners or your employees only while the personal effects are located at the premises described ~n the Declarations. The most we will pay for loss in any one occurrence under this Ex- tension of Coverage is $500 as an additional arnourlt of insurance.

The Cither Insurance Condition conta~ned in the Section I and Section I \ Common Conditions does not apply to this Extension of Coverage. This extension does not apply if the loss is covered by any other insurance, or would have been covered by such other insurance in :he absence of this policy. We wil l decide rf our payments for loss under this extension wi l l be made to you or to the owner of the property.

18. Prope3rty of Others . You may extend the insurance -that applies to Coverage B - Business Per- sonal Property to apply to personal property of others in your care, custody or control only whi!e the personal property is located at the premises described in the Declarations. The most we wil l pay for loss in an.y on.- occurrence under this Extension of Coverage is $2,500 as an additional amount of insurance.

This Extension of Coverage does not spply to:

a. personal effects owned by you, your officers, your partners or your employees: or

b. personal prooerty of others that must be restored, repaired or replaced because your work \tias 1ncorrec:tly performed on ~t

The Other Insurance Condition contained in the Section I and Section 11 Common Conditions does not apply to this Extension of Coverage. The insurance provided under this Ex~ension of Coverage is prrrnary and does not contiibute with any other insurance. We wi l l decide if our payment for loss under this extension wi l l be made to you or to the owner of the property.

19. Trees, Plants, Lawns and Shrubs. We wi l l pay for any accidental direct physical loss to your trees, plants, la>wns and shrubs, oiher than those you own as merchandise held in storage or for sale, whlie located at the premises described in the Declara- tions caused by any of the following causes of loss:

a. fire:

Personai Effects. You may extend the ir~surance b. lightning; that a~p l i es to Coverage B - Business Personal Property. to appliy to personal effects owned by you, c. explositjn;

SECTION I EXTENSIONS OF' COVERAlGE (cont .) - -- -

d, riot or civil commotion: rnanently attached to the building, occupied bu t no t owned by you, caused by an insured loss.

e. a~rcraft or vehicles; 22. Land . We wi l l pay u p t o $10,000 in any one oc-

currence, as an-addit ional amount of insurance,-for the expense you incur to replace. rebuild, stabilize or otherwise restore the land necessary to support the insured buildings wh ich sustain an insured loss.

f, vandalism; or

g. theft

The most w e wi l l pay for loss, including debris removal expense, in any one occurrence under this extension is $5,000 as an additional amount of insurance.

23. D a m a g e to N o n - O w n e d B u i l d i n g s F r o m T h e f t , B u r g l a r y or Robbery . We wi l l pay for any accidental direct physical loss t o a building or p<art o f a building, including equipment pertaining t o the service of the building, occupied bu t not owned b y you caused b y actuai or attempted theft, burglary or robbery.

E x t e r i o r S igns . We w i l l pay for any accidental direct physical loss t o all exterior signs at the described premisles wh ich are owned by you, or owned by others b u t are in your care, custody or control, caused b y any cause other than:

This Extension of Coverage does , lot apply to:

a. glass, other than glass building blocks; a. wear and tear;

b. any lettering or ornamentation; or b. hidden or latent defect:

c . bui lding property or equipment removed from the premises. c. rust or corrosion; or

d. mechanical breakdown 2.4. Back-up o f S e w e r or D r a i n . We w i l l pay for any accidental direct physical loss caused b y water wh ich enters Into and overflows from within a sump pump, sump pump wel l o r other type syst~em designed t o remove subsurface water wh ich is drained from the founda t~on area.

The most w e wi l l pay for loss in any one occurrence under this Extension of Coverage is $500 as an additional amount of insurance.

T e n a n t Glass. W e wi l l pay for any accidental d i - rect physical loss t o glass in a bui ld ing or part of a building, including glass contained in fixtures per-

This coverage does no t apply i f the loss is caused b y your negligence. - - -

SECTION I OPTIONAL COVERAGES

O P T I O N A L COVERAGES

alone or in collusion w i th other, persons (except you or your partner) w i t h the manifest intent to:

The fo l lowing Optional Coverages aye subject to the terms and condition:^ applicable t o Section 1 of this po l - icy, unless otherwise indicated. Each Optional Coverage appl~es only as indicated in the Declarations.

a. cause you to sustain loss; and

b . obtain financial benef-it, other than salaries, commissions, fees, bonuses, promotions, awards, profit sharing, pensions or other ern - ployee benefits earned in the normal course o f employment, for any employee or any other person or organization.

0 PTION E D - E m p l o y e e D i s h o n e s t y

1. When an amount is s h o w n in the Declarations for this Clption ED, w e w i l l pay for any accidental direct physical loss t o business personal property, includ- Ing money and securities, resulting from dishonest acts committed b y any of your employees acting

2 . W e will no t pay for loss.

a. resulting from any dishonest or criminal act that you or any of your partrlers commit

S E C T I O N I OPTIONAL COVERAGES (cont . )

whether acting alon~e or in collusion 'y i th other persons;

b. when the only proof of its existence or amount is an inventory cornputation or a profit and loss computation.

The most we will pay for loss in any one occurrence is the limit of insurance shown in the Declarations for this Option ED. But we wi l l not pay you rnore for loss to covered property than:

a. the face value of money;

b. replacement cost of business personal property at the time of the loss; or

c. the value 01' securities at the close of business on the day .the loss is; discovered.

All loss involving a single act, or series of related acts, caused by one or more persons is considered one occurrence.

We wil l pay only for loss you sustain through acts committed or events occurring during the policy period. Regardless of the ~nurnber of years this policy remains in force or the number of premiums paid, no limit of insurance cumulates from year to year or period to period.

This optional coverage dc~es not apply to ariy employee immediately upon discovery by you, or any o f your partners, officers or directors not. in collusron with the employee, of any dishonest act commmed by that employee before or after being h~red by you.

We will pay onLy for covered loss discovered no later than one year from the end of the policy period.

If you, or any predecessor in interest, sustained loss during the period of any prior insurance that you could have recovered under that insurance except that the time within which to discover loss had ex- pired, we wi l l pay for it under this optional coverage, provided:

2. this optional coverage became effective at the time of cancellation or termination of the prior insurance; and

, the loss would have been covered by this op- tionai coverage had ~t been in effect when the acts or events causlrlg the loss were comnit- ted or occun-red.

9. The insurance under paragraph 8. above is part of, not in a d d ~ t i o ~ i to, the limit of insurance applying to this optional coverage and is limited to the lesser of the amount recowerable under:

a. th,is optional coverage as of its effective date; 0 Y'

b. the prior insurance had i t remained in effect --

OPTION ES - Exter ior S igns

The limit of insurance for Exterior Sicns under Extensions of Coverage i s changed to the amount shown in the Declarations for this Option ES.

-- OPTION R/IB - Mechanical B r e a k d o f ~ n (Boilers, Pressure Vessels, Air Conditioriing Units)

When this Oprion MB is shown as appljcable in the Declarations, we wil l pay for any direct physical loss to covered property caused by an "accident" to an "object" which is owned by you or in your care, custody or c:ontrol. Our payment for loss to covered property as a result of an "accidentl' to an "objec,t" is part of and not in addition to the limit of insurance that applies to property.

We wi l l also pay the reasonable extra cost to make temporary repairs and to expedite permanent repairs or re~l~acernent of coverer? property damaged by an "accident". But our payment for these expediting expenses wi l l be limited to what is left of the property limit of insurance after we pay your loss for covered property damaged by an "accident" or $25,000. wh~chever is less.

When used in the provisions of this Option ME:

a. "isccident":

means a sudden anti accidental breakdown of the "object" or a part of the "ot~ject". The breakdown must manifest itself at the time the breakdown occurs by physical damage to the "object" to the extent that the "object" requires repair or replacement;

does not mean any of ihe foltuwing:

(a) depletion, deterioratior?, corrosion or erosion of material;

F O E M 3

SfCTlQM i OPTiO N A i COVERAGES (cant.) - ------ ---- --

wear and tear:

leakage at any valve. fitting, shaft seal, gland packing, jo int 01 connection;

breakdown of any vacuum tube, gas tube, brush, electronic corn- puter, electronic data processing ec;uipnient, structure or foundation support ing the "object" or any of its parts;

the functioning of any safety or protective device; or

the explosion 0.f gases or fuel wi th in the furnace o f any "object" or w i th in the flues or passages through wh ich the gases of combustion pass;

b. in respect to boilers and pressure vessels, "'object":

{ I ) means any o f the fo l lowing equipment:

steam heating boilers and condensate return i.anks used w i th them, including steam boilers used in dry cleaning operations;

ho t water heating boilers and expansion tanks used w i t h them;

hot water supply boilers;

other fired or unfired vessels used for maintenance or service o f the premises where they are located bu t no t used for any manufacturing or processing other than that processing related to dry cleaning operations;

steam boiler piping, valves, fittings, traps and separators, bu t only if they:

i. are o n your premises or between parts o f your premises:

i i . contain steam or condensate of steam; and

. . . I . are not part o f any other vessel

or apparatus;

(f) feed water p ip ing between any steam boiler and a feed pump or injector;

(2) does not mean any:

(a) equipment that is not under internal vacuum or internal pressure other than weight o f contents;

c . in respect

boiler settings;

insulating or refractory material; or

electrical, reciprocating or rotating apparatus w i th in or forming a part of the boiler or vessel;

to air condit ioning units, "object":

(1) means any air condi t ioning uni t that has a capacity of 60,000 0TU per hour (5 horsepower) or more, including:

inductors, convectors and coils that make use o f a refrigerant and form part o f a cooling, humidity coniLrol or space heating system;

interconnecting piping, valves and fittings containing only a refrigerant, water, brine or other solution;

vessels heated directly or indirectly that form part of an absorption type unit and function as a generator, refrigerator or concentrator;

compressors, pumps, fans and blowers used solely w i th the uni t together w i th their driving electric motors: and

control equipment used solely w i t h the unit;

(21 does no t mean any:

vessel, cooling tower, reservoir or other source of cool ing water for a condenser or compressor, or any water piping leading to or f rom ,that source: or

FORM 3

SECTION I OPTIONAL COVERAGES (cloni.) - ----

(b) wir ing or piping leading t o or from the unit.

We wi l l no t piay for loss resulting from an "accident" to any "object" whi le being tested.

Whenever an "object" is found t o be in, or exposed to, a dangerous condition, any of our representatives may immediately suspend the insurance against loss from an "iiccident" to that "object". We can d o this by delivering or mailing a writ ten notice of suspension to:

a. your last \known address; or

b. the address where the "object" is located.

If w e suspend your insurance, you wi l l get a pro rata refund o f premium. But the suspension w i l l be effective even if we have not yet made or ofl'ered a refund.

-

OPTlON M O - M o n e y and S e c u r i t i e s

1. When this Optlon M I 0 is shown as applicable in the Declarations, vve w i l l pay for any ioss to money and securities used in your t~usiness while:

a. at a bank or savings institunon;

b. w ~ t h i n your living quarters;

c . wi th in the living quarters of your partners or any employee havi,ng use and custody o f the property;

d . at the premises described .in the Declarations; 0 r

e. enroute between any o f these places;

resulting direc:tly from destruction, disappearance or theft (meaning any act of stealing).

We wi l l no t pay for loss:

a . resulting from accounting or arithmetical errors or omissions;

b. due t o the giving or surrendering of property in any exchange or purchase;

c. of property contained in any money-operated device unless the amount of money deposited in it is recorded by a continuous recording instrument in the device.

The most w e wi l l pay for loss in any one occurrence 1s:

a. the first l imit of insurance shown in the Dec- larations for this Option M O for money and securities \ ~ h i l e in or on the premises described in the Declarations or w i th in a bank or savings institution; or

b. the second limit o f insurance shown in the Declarations for this Opt ion MO for money and securities whi le anywhere else

But w e w i l l no t pay you more for loss than the face value of money or the value of securities at the close of business on the day the loss is discovered.

A l l loss involving a single act, or series of related acts, caused by one or more persons is considered one occurrence.

You must keep records of a l l money and sec.urities so we can verify the amount of any loss.

0 PTION UP - Trees, Plants . Lawns and S h r u b s

The l imit of insurance for Trees, Plants, Lawns and Shrubs under Extensions of Coverage IS changed to the amount shown in the Declarations for this Opt ion TP

SECTION I DEDUCTIBLES

D ED U CTI BLES than that Section I loss to wh ich the fo l lowing special deductiblle amounts w i l l be applied:

W e w i l l not pay for loss in any one occurrence unti l the amount of loss exceeds the deductible. We wi l l then pay 3 . $1 00 from 1.he amount of all loss rn any one occur- only the amount of loss in excess of the deductible up rence t o glass; t o the applicable lirriit o f insurance.

2. $250 from the amount of al l loss in any one occur- The deductible shown in the Declarations w i l l be deducted from any IO!~S under Section I of this policy other rence under the Employee Dishonesty optional

14 FORM 3

DEDUCTIBLE§ (con t . ) -- - -c.

coverage when Option ED 15 designated In the 5. $'1,000 from the amount of all loss in any one oc Declarations;

$250 from the amount of all loss in any one occurrence under the Mechanical Breakdown optional coverage when Option MB is designated in the Declarations:

$250 from the amount of all loss in any one occurrence under the Money and Securities optional coverage when Option M O is designated in the Declarations;

currence under the Back-up of Sewer or Drain Ex- tension of Coverage.

But w e wi l l not deduct more than the deductible showr in the Declarations from the total amount of all loss ir any one occurrence nor more than the special deductible that applies t o any loss subject to the special deduc t i b !~ amounts,

N o deiductjble w i l l be applied t o the Arson Reward, Firf Deparlment Service Charge, Extra Expense and Firc Extinguisher Recharge Extensions o f Coverage.

SECTICIN 1 CONDI'TIONS ---- CONDITIONS c. -we may adjust losses w i t h the owners o f los

or damaged property i f other than you. I f wc 1 . LOSS P a y m e n t . I n the event of 10::s covered by :his pay the owners, such payments w i l l satisf)

poli'cy: your claims against us for the owners' prop. erty. We wi l l no t pay the owners more thar

a. w e wi l l give notice, w i th in 30 days after w e their financial interest i n the covered property receive the sworn statement of loss, of our intent to settle the loss accorlding t o one of the d. w e may elect t o defend you, a t our expense fo i lowing methods: against suits arising f rom claims of owners o

pay the value of lost or damaged property as determined i n Condit ion 2. Valu- ation;

pay the cost o f replacing or repairing the lost or damaged property, plus any re- duction in value of repaired items;

take all or any part of i.he property at an agreed or appraised value; or

repair, rebuild or replace the property w i th other property of like k ind and quality;

b. w e will not pay you more than your financial interest in the covered property;

property;

e, w e wi l l pay for covered loss wi th in 60 day! after w e receive the sworn statement of loss if:

(1) you have complied w i t h all o f t he term! o f this policy; and

( 2 ) w e have reached agreement w i th you or the amount of loss or an appraisal awarc has been made.

If you name an insurance trustee, w e wi l l ad just losses w i th you, bu t w e wi l l pay the in surance trustee. I f w e pay the trustee, thl payments wi l l satisfy your claims against us.

FORM

2. Valuation. The value (of covered property w i l l be determined at:

(2) manuscripts;

SECTION I COND1TiORtS ( c o n t . ) ----

I a. replacement cost, wi thout deduction for de- preciatio~r), as of the t ime o f loss to all covered property other than that described in b. below,

you may make a claim for loss covered by this insurance on an actual cash value basis icstead o f on a replacement cost basis. In the event you elect t o have loss settled o n an actual cash value basis, you may still make a claim o n a replacement cost basis if you noti fy u s ' of your intent to d o so within 180 days alter the loss;

we wi l l not pay for any loss o n a replacement cost basis unt i l the lost or damaged property is actually repaired or replaced and then, only i f the repairs or replacernent are made as soon as reasonably possible after the loss;

we w i l l not pay more for loss in any one occurrence o n a replacement cost basis than the least of:

(a) the limit of insurance under this policy applicable t o the lost or damaged property;

(b) the cost t o replace the lost or damaged property on the same prernlses w i th other property of cornparable material and quali ty that can be used for the same purpose: or

(c) the amount y o u actually spend that is necessary t o repa~r or replace the lost or (damaged property;

w e wi l l pay fcr loss t o glass at the cost of replacement w i th safety glazing material i f required by law;

b. actual cash value as o f the t ime o f loss to the fo l lowing covered property:

(1 ) used or second-hand merchandise held in storage or. for sale;

( 3 ) works of art, antiques or rare articies, i n - c:luding etchings, pictures, statuary, rnar- bles, bronzes, porcelains and bric-a-brac.

3. D u t i e s in the Event o f Loss. You must see that the fo l lowing are done in the event of lass t o covered property:

noti fy the police if a law may have been broken;

give us prompt notice of the loss. Include a description o f the lost or damaged property in the notice; ..

as soon a:< possible, give us a description of how, when and where the loss occurred;

take all reasonable steps to protect t he covered groperty from further damage by an insured loss. If feasible, set the damaged property aside and in the best possible order for examination. Also keep a record o f your emergency and temporary repair expenses fo'r consideration in the settlement of the claim. This w ~ l l no t increase the limit of insurance;

at our request, give us complete inventories of t h e damaged and undamaged property. I n - c lude quantities, costs, values and amount of loss claimed;

permit us t o inspect the property and records proving the loss;

if requested, permit us t o question you under oath at such times as may be reasonably required about any matter relating t o this Insur- ance or your claim, including your books and records. In such event, your answers must be signed;

send us a signed, sworn statement o f loss containing the information w e request t o settle the claim You must do this w i th in 60 days after our request. We wi l l supply you w i th t he necessary forms;

SECTION ! COFdDtTI3NS ( c o n t . ) - ----

8. Vacancy. If the building where loss occurs ! i. cooperate with us in the investigation or settlement of the claim;

i. resume ail or part of your business activities at the described premises as quickly as possible.

P~ppraisat. If we and you disagree on the value of the property or the amount of loss, either may make written demand for an appraisal of the loss. In this event, eaclh party wi l l select'a competent and im- partial appraiser. Each party ill notify the other of the selected appraiser's identity within 20 days after receipt of 'the written demand for an appraisal. The two appraisers wi l l select an umpire. If the appraisers cannot agree upon an umpire within 1 5 days, either may request that sselection be made by a judge olf a court having jurisdiction. The appraisers wiill state separately the value of the property and amount of loss. If they fail to agree, they vvill submit their differences .to the umpire. A deci- sion agreed to by any two wil l be binding. Each party will:

a. pay its chosen appraiser; and

b. bear the other expenses of the appraisal and umpire equally.

If we subrnit to an appraisal, we wi l l still retain our right to deny the claim.

Abandonment . There can be no abandonment of any property to us.

Legal Ac t i on Aga ins t Us. IVo one may bring legal action against us under this insurance unless:

a. there has been full compliance with all of the terms of this insurance; and

b. the action is brought within two years after - the date on which the accidental direct phys-

ical loss occurred. But if the law of the state in which this policy is issued allows more than two years to bring legal action against us, that longer period of time wi l l apply.

I3ecovere:d Proper ty . If e iher you or we recover any property after loss settlement, that party must give the other prompt notice. At your option, the property vvill be returned to you. You must then re- 1:urn to us the amount we paid to you for the property. We wi l l pay recovery expenses and the expenses t o repair the recovered property subject to 1:he limit a~f insurance.

been vacant for more than 6 0 consecutive dl before rhat loss, we wi l l reduce the amount would otherwise pay for the loss by 15%.

Vacant means the building does not contain : personal property. Buildings under construction not considered vacant.

9. Con t ro l o f P roper ty . Any act or neglect of 2

person other than you beyond your direction control wi l l not affect this insurance.

If you violate a condition of this policy, we \will I pay for loss at the involved location. But your ct erage wi l l continue for other locations at which violation does not apply.

10. U n i t - O w n e r Mor tgagee . This clause is effect if a Unit-Owner Mortgagee is named in the poli A designated Unit-Owner Mortgagee shall be p! tected for their interest under the terms of 1 Mortgage Holders Condition provided under Cc dition I I ., subject to the following: .

.

a. the termination provisions as provided in 1 Mortgage Holders Condition are amended provide 30 days notice except if nonpayrni occurs in which case 10 days notice will given; and

b. loss settlements wi l l be based upon the cc erage available under the policy conditions such buildings.

1 I. M o r t g a g e Holders. When used in the fal lowi provisions of this condition, the term "mortg; holder" includes mortgagee or trustee:

a. We will pay for covered loss to buildings structures to each mortgage holder shown the Declarations in their order of preceden as interest may appear.

b. The mortgage holder has the right to rece loss payment even if the mortgage holder k started foreclosure or similar action on 1 building or structure.

c. If we deny your claim because of your acts because you have failed to comply with; terms of this policy, the mortgage holder I still have the right to receive loss paymen the mortgage holder:

( 1 ) pays any premium due under this pol at our request if you have failed to do

FOR

SECTION I CONDiTIONS (cont.) --

( 2 ) submits a signed, sworn statement of loss w i t h ~ n 6C) days after recelvrng notice f rom us o f your fa~ lure to do so; and

( 3 ) has notifled us of any change in ownership, occupancy or substantial change in risk known t o the mortgage holder.

A l l terms o t thrs policy wi l l then apply directly t o the mortgage holder.

e. I f we cancel thrs po l~cy , w e wrl l glve writ ten notrce to the mortgage holder a t least

(1 ) 10 days before the effective date o f cancellation i f w e cancel for your nonpayment sf premium; or

( 2 ) 30 days before the effective date of cancellation if w e cancel for any other reason.

d. I f we pay the mortgage holder for any lass and f. If w e d o not renew this policy, w e wi l l give deny payment to you because of your acts or writ ten notice to the mortgage holder at least because you have failed t o comply w i th the 10 days before the expiration date o f this po l - terms o f this policy: icy.

(1) the mortgage holder's .rights under the 12. N o B e n e f i t to Ba i lee . No person or organization, mortgage wi l l be transferred t o us to the other than you, having custody of covered property exten-t of the amount w e pay; and 'will benefit from this insurance.

(2) the mortgage holder's right t o recover 13. K n o w l e d g j e o r C o n t r o l . W e wi l l no t pay for loss the ful l amount of the mortgage holder's whi le the chance o f loss is increased by any means claim wi l l no t be impaired. w i th in your knowledge or control.

A t our olption, w e may pay to the mortgage 14. P o l i c y Pe r iod , C o v e r a g e T e r r i t o r y . We cover holder the who le principal on the mortgage loss commencing during the policy period and plus any accrued interest. In this event, your w i th in or betwelen the coverage territory. The cov- mortgage! and note w i l l be transferrecl to us erage territory is the United States of America ( in - and you wi l l pay your remaining mortgage c luding its territories and possessions), Puerto Rico debt t o us. and Canada.

-- _s____l_-

SE.CTION I I COMPREHENSIVE B U S I N E S S LIABILITY -- -- COVERAGE L -. 3. t o a d v e r t i s i n g i n j u r y caused by an o c c u r r e n c e B U.SlN ESS LlABl lL lTY . committed i n the c o v e r a g e . t e r r i t o r y - . during the

p o l i c y period. T ie , o c c u r r e n c e must be committed We wi l l pay those s,ums that the insured becomes legally i n the course of advertising your goods, products obligated to pay as clamages trecause of b o d i l y i n j u r y , or services. p r o p e r t y damage , p e r s o n a l injury or a d v e r t i s i n g -- i n j u r y t o wh ich this insurance applies. No other obl i- RlGHT A N D D U T Y gation or liability t o pay sums or perform acts or services T O D E F E N D is covered unless explicitly provided for under Supple- mentary Payments. This insurance applies only: We wi l l have the r ight and duty to defend any claim or

s u i t seeking damages payable under this pol icy even 1. t o b o d i l y i n j u r y or p r o p e r t y damage caused b y though the allegations of the s u i t may be groundless,

an occurrenc:e wh ich takes place in the co .verage false or fraudulerit. The amount we wil l pay for damages t e r r i t o r y during the policy period; is limited as described in Limits of Insurance. Damages

because of b o d i l y i n j u r y include damages claimed b y 2. t o p e r s o n a l i n j u r y caused by an o c c u r r e n c e any person or organization for care, loss of services or

committed in the c o v e r a g e t e r r i t o r y during the death resulting at any time from the b o d i l y i n j u r y . W e policy period. The o c c u r r e n c e must arise out o f may investigate and settle any claim or s u i t at our dis- the conduct o f your business, excluding advertis- cretion. Our right antl duty t o defend end when w e have ing, publishing, broachcasting or telecasting done used u p the applicable limit of insurance in the payment by or for you; of judgments or settlements or medical expenses.

SU.PPLEM ENTARY PAYMENTS

I n addit ion to the Limit of Insurance, we wi l l pay, w i t h respect t o any claims or s u i t we defend:

1 . all expenses w e incur;

2. u p t o $250 for cost of bail bonds required because o f accidents or traffic law violat ions arising out o f the use of any vehicle to wh ich Coverage L - Business 'Liability for b o d i l y injury applies. W e d o no t have t o furnish these bonds;

3. the cost of bonds to release attachments b u t only for the arnounii within our Limit of Insurance. W e do no t have t o furnish these bonds;

4. all reasonable expenses incurred by the insured at our request to assist us in the ~nvest igat ion or de - fense of the claim or su i t , inc luding actual loss o f earnings, up t o $1 00 a day because of t ime off from work:

5. all costs taxed against ihe insured in the su i t ;

6 . prejudgment interest awarded against the insured o n that part of the judgment w e pay. If w e make an offer t o pay the Limit of Insurance, w e wi l l not pay any prejudgment interest based on that period of t ime after the offer;

7 . all imterest on .the fu l l amouni of arly judgment that accrues after entry of the judgment and before w e have paid, offered to pay, or deposited in court the part of the judgment that is w i th in our L i rn~ t of In- sura nce.

B U S I N E S S L IAB IL ITY EXCLUSlONS

Under Coverage 1, this insurance does n o t apply:

1. t o b o d i l y i n j u r y or p r o p e r t y damage:

a. expected or intended f rom the standpoint of the insur1.d; or

b. to any p r s o n or property \ ~ h i c h is the result of wi l l fu l and malicious acts of the insured.

This exclusior~ does not apply t o b o d i l y i n j u r y or p r o p e r t y damage resuiting f rom the use o f reasonable force to protect persons or property;

2. t o b o d i l y i n j u r y or p r o p e r t y d a m a g e for wh i ch the insured is obl igated t o pay damages by reason of the assurnption of IiabiliTy in a contract o r agreement. This exclusion does not apply t o liability for damages:

a. assumed in a contract o r agreement that is an i n s u r e d c o n t r a c t provided the b o d i l y injury or p r o p e r t y damage occurs after the execution of the contract or agreement; or

b. that the insured wou ld have in the absence of a (contract or agreement;

3. t o b o d i l y injury or p r o p e r t y d a m a g e for wh ich any insured may be held liable.

a. as a person or organization engaged in map- ufacturing, distributing, selling, serving or furnishing alcoholic beverages. if such liability is imposed by reason of:

( I ) any statute, ordinance or regulation relating t o the sale, gift, distribution or use of alcoholic beverages; or

(2) the furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol or wh ich causes or contributes t o the intoxication of any person;

b. a:; an owner or lessor o f premises used for manufacturing, distributing, selling, serving or furnishing alcoholic beverages i f such liability is imposed b y reason o f any statute, ordinance or regulation relating to the sale, gift, distrib- ut ion or use of alcoholic beverages.

This entire exclusion does n-ot apply t o the liability imposed o n any insured as the result o f the giving or serving of alcoholic beverages at functions incidental t o your business, provided you are not: (a) i n the business of manufacturing, distributing or selling alcoholic beverages; (b) serving or furnishing alcoholic beverages for a charge whether or no t S L I C ~ activity requires a license or is for the purpose o f financial gain or livelihood; (c) serving or furnishing alcoholic beverages wi thout a charge if a license is required for such activity; or (d) inten- t ionally violat ing any statute, ordinance or regulation;

4. t o any obligation of the insured under any workers compensation, disability benefits or unemplovment compensation law, or any similar law;

FORM 3

SECTION I 1 COMPREHENSEVE B U S I N E S S LIABILITY (con-t.) - -em--

5. to b o d i l y i n j u r y or pe rsona l i n j u ry :

a. to an employee of the insured ar~s ing out of and rn the course of employment, or the ter- mrnatlon o f employment, by the insured or to the spouse, child, parent, brother or sister of that employee a:j a consequence o f employment or termination of that employee by the Insured, or

b. arising out of any:

refusal to employ;

termination of employment;

coercion, demotion, evaluation, reas- signment, discipline, defamation, harrassmem, humiliation, discrimination or other employment-related practices, policies, aclts or omissions; or

consequential b o d i l y i n j u r y or p e r - s o n a l injwy as a result of ( I ) , (2) and (3) above.

This exclusion applies whether the insured may be liable as an employer or i n any other capacity, and to any obligation to share damages wi th or repay someone else w h o must pay damages because of the injury.

But this exclusion does not apply t o liability assumed b y the insured under an i n s u r e d c o n t r a c t ;

6. to any:

a. b o d i l y i n j u ry , p r o p e r t y damage, p e r s o n a l i n j u r y or a d v e r t i s i n g i n j u r y arising out of the actual, alleged or threatened discharge, seepage, migration, dispersal, spill, release or escape of p o l l u t a n t s :

at or from any premises, site or location wh ich is or was at any t ime owned or occupied by, or rented or loaned to, any insured:

at or from any premises, slte or locat~on wh ich is or was at any time used b y or for any insured or others for the handling, storage, disposal, processing or treatment of waste:

wh ich are or were at any time transported, handled, stored, treated, dis-

posed of, or processed as waste by or for any insured or any person or organiza- t ion for whom you may be legally responsible; or

(4) at or from any premises, site or location o n wh ich any insured or ariy contractor or subcontractor working directly or indirectly on behalf o f any insured is performing operations:

(a) if the p o l l u t a n t s are brought on or t o the premises, site or location in connection w i th such operations by such insured, contractor or subcontractor; or

(b) i f the operations are t o test for, monitor, clean up, remove, contain, treat, detoxify or neutral~ze or in any way respond to or assess the effects of p o l l u t a n t s ;

b . loss, COST or expense arising out of any:

(1 ) request, demand or order that any in - sured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralrze or in any way respond t o or assess the effects of p o l l u t a n t s ; or

( 2 ) claim or s u i t by or on behalf of a gov- errmental authority for damages because o f testing for, monitoring, cleaning up, removing, containing, treating, detox- i fying or neutralizing, or in any way responding to or ,assessing the effects of p o l l u t a n t s .

Parts a . ( l ) and a.(4)(a) of this exclusion d o not apply t o b o d i l y i n j u r y or p r o p e r t y d a m a g e caused by heat, smoke or fumes f r o ~ n a hostile fire or b y poisoning or asphyxiation due t o fumes wh ich escape f rom a furnace or flue. As used in this exclusion, a hostile fire means one wh ich becomes ur~contro l lable or breaks out from where it was in - t m d e d t o be;

7. ,to bod i l y ' i n j u r y or p r o p e r t y d a m a g e arising out of the ownership, maintenance, use or entrustment to others o f any aircraft, a u r o or watercraft owned or operated by or rented or loaned t o any insured. Use includes operation and l o a d i n g o r u11Uoading.

FORM 3

a. watercraft whi le ashore o n premises you own or rent;

b. any watercraft yoi l d o not o w n that is less than 26 feet long and not being used to carry persons or property for a charge;

c. -parking an a u t o on, or on the ways next to, premises you o w n or rknt provided the a u t o is no t owned by or rented or loaned to you or any insured;

d. l iab~ l i ty assumed under any i n s u r e d c o n - t r a c t for the ownership, maintenance or use of aircraft, a u t o or watercraft;

e. b o d i l y i n j u r y or p r o p e r t y d a m a g e arising O L I ~ of the use of any n o n - o w n e d a u t o in your business b y any person other than you;

f. b o d i l y i n j u r y or p r o p e r t y d a m a g e arising out of the maintenance or use of a h i r e d a u t o b y you or your employees in the course of your business; or

g. b o d i l y in j lury or p r o p e r t y d a m a g e arising o u t of the operation of any of the fo l lowing equipment:

(1 ) cherry pickers and similar devices moun-ted on automobile or truck chassis and used to raise or lower workers; and

(2) air compressors, pumps and generators, including spraying, weiding, bui lding cleaning, geophysical exploration, l ight- ing and wel l servicing equipment; . .

8. t o b o d i l y i n j u r y or p r o p e r t y d a m a g e arising out of:

a, the transportation of m o b i l e e q u i p m e n t by an a u t o owned or operated by or rented or loaned to amy insured;

b. t he use of m o b i l e e q u i p m e n t in, or whi le in practice or preparation for, a prearranged rac- ing, speed or demolition' contest or in any stunting activity; or

c. tlhe operatlion or use of any snowmobi le or trailer designed for use w i th the snowmobile;

9. to b o d i l y i n j u r y or p r o p e r t y d a m a g e due to war, whether or no t declared, or any act or condit ion

- - - - -

~nc iden t ro war. War lncludes c r v ~ l war, ~nsulrection. rebel l~on or revolut~on,

10. t o b o d i l y i n j u r y , p r o p e r t y d a m a g e or p e r s o n a l i n j u r y du.e to rendering or failure t o render any professionaf services or treatments. This includes but is n0.t l imited to:

a. legal, accounting or advertising services;

b. engineering, drafting, surveying or architec- tural services, including preparing, approving, OF fai l ing to prepare or approve maps. drawings, opinions, reports, surveys, change orders, designs or specifications;

c. supervisory or inspection services;

d. medical, surgical, dental, x-ray, anesthetical or nursing services or treatments, b u t this exclusion only applies to an insured w h o is engaged in the business or occupation of pro- v id ing any of these services or treatments;

e. any cosmetic, tonsorial or ear piercing services or treatments;

f. optometry or optical or hearing aid services, including:

(1 ) prescribing, preparing, fitting, demon- strating or distr ibuting o f ophthalmic lenses and similar products; or

(2) hearing aid devices;

g. mortuary or veterinary sewices or treatments;

h. chiropractic, massage, physiotherapy, chtrop- odjr o r osteopathy services or treatments; and

i. pharmaceutical services, bu t this exclusion does not apply t o an insured w h o is a retail druggist or drugstore;

11. t o p r o p e r t y damage to:

a. property you own, rent or occupy;

b. premises you sell, give away or abandon, if the p r o p e r t y d a m a g e arises out o f any part of those premises. This part of this exclusion does not apply ~f the premises are y o u r w o r k and were never occupied, rented or held for rental by you;

c. prcrperty loaned to you;

F O R M 3

I

I

SECTION ! I i

CONIIPREHENSIV'E B U S I N E S S LIABillTY (cont.) ----

drawal, recall, ~nspection, repair, re~lacernent, adjustment, removal or disposal of:

d. personal property in the care. c u s ~ o d y or eon- trol of any insured;

e. that particular part olf real property o n wh ich you or any contractor or subcontractor working directly or indirectly o n your behalf is performing operations, i f the p r o p e r t y darn- age arises out of those operations; or

f. that particular part of any property that must be restored, repaired or replaced because your w o r k was incorreci.ly performed on it. This part of this exclus,ion does no: apply to p r o p e r t y d a m a g e included in the p r o d u c t s - c ~ o m p l e t a d o p e r a t i o n s haza rd .

Parts c., d., e. and f. of t h k exclusion do no t apply t o iiability assumed under a sidetrack agreement;

12. t o p r o p e r t y d a m a g e to .your product arising ou t of it or any part o f it;

13. t o p r o p e r t y d a m a g e to y o u r w o r k arising ou t of it or any part of it and included in the p roduc ts -co rnp l l e ted o lpera t ions hazard .

This exclusion does not apply if t he damaged work or the work 0u.t af which the damage arises was performed o n your behalf by a subcontractor;

14. t o p r o p e r t y d a m a g e t o i m p a i r e d p rope r t : y , or property that has no t heen physically injured, arising out of:

a. a defect, deficiency, inadequacy or dangerous c o n d i t ~ o n in y o u r p r o d u c t or y o u r w o r k ; o r

b. a delay or failure by you or anyone acting on your behalf 1.0 perform a contract or agreement i n accordance wi?h its terms.

This exclusion does not apply t o the loss o-f use of other property arising out, of sudden and accidental physical injury t o y o u r p r o d u c t or y o u r w o r k after it has been put t o it:; intended use;

15. to damages claimed for any loss, cost or expense incurred by you or others far the loss of use, w i th -

a. y o u r pr loduct ;

! b. y o u r w o r k ; or

c. irrhpaired p r o p e r t y ;

if such product, work or property is w i thdrawn or recalled f rom the rnarket or f rom use b y any person or organization because of a known or suspected defect, deficiency, inadequacy, or dangerous con - dit ion in it;

16. to p e r s o n a l i ,n ju ry or a d v e r t i s i n g i n j u r y :

a. arising ou t of oral or written p u b l ~ c a t ~ o n of niater~al if done- by or at the direction o f the insured wrth knowledge of its falsity;

b. arising o u t of oral or written publication o f material whlxie first publication took place before the beginning of the policy period;

c. arising out of the wi l l fu l violation o f a penal statute or ordinance committed b y or w i th the consent of the insured: or

d. for wh i ch the insured has assumed l iab~ l i ty in at contract or agreement. This part o f this exclusion does not apply to liability for damages that the insured wou ld have in the absence of a contract or agreement;

17. to a d v e r t i s i n g i n j u r y arising out of:

breach of contract other than misappropriation of advertising ideas under an implied contract;

the failure of goods, products or servlces t o conforrr~ w i ~ h advertised quality o r performance;

t.he w r o n g description of the price o f goods, products or services; or

a n offense committed by an insured whose business is advertising, broadcasting, pub- l ishing or telecasting.

SECTION [I PROPERTY DAMAGE LEGAL L I A B I L I T Y '

.-P ---=-

PROPERTY D A M A G E ' I . the number o f persons or organizations insured LEGAL L IABIL ITY under t h ~ s policy.

Subject to the terms and condit ions o f Section II o f this 2. the number o f persons or organizations w h o have policy, unless otherwise indicated, w e wi l l also pay those sustained injury or damage; or sums that the insured becomes legally obligated to pay as damages, other than damage to glass in bui ldings or fixtures permanently attached to bui ldings w h ~ c h you d o :3. the number of claims made or causes of action or no t own, because of p r o p e r t y d a m a g e t o premises sui'ts brought because o f injury or damaoe. ( including permanently attached fixtures) rented to or occupied by you. This insurance applies if such P rop - Business Liability Exclusions 3.. 4.. 5., 6.. 7.. 8.) 9., 11 ., e r t y d a m a g e arises out o f any insured loss in Section 1 12., 13,, 14, and 15. do not apply to this coverage. of this policy. The most w e w i l l pay for damages because of p r o p e r t y d a m a g e t o these premises arising out o f any one event, or a series or combination of such events, Fior the purpose of determining our l imit for this cover-

is $300,000 flor each o c c u r r e n c e . age, al l b o d i l y i n j u r y and p r o p e r t y d a m a g e arising o u t of a continuous or repeated exposure t o substantially

Our $300,000 l imit w i l l no t be increased because o f the. the same general condit ions shall b e considered as aris- fol lowing: i ng o u t of one o c c u r r e n c e .

P --- SECTION II MEDICAL PAYMENTS -- -,--

C O V E R A G E M - h4 E D I C A L M E D I C A L P A Y M E N T S P A Y M E N T S

EXCLUSIOFJS We wi l l pay ~ned ica l expenses for b o d i l y i n j u r y caused by an accident on the premises you own or rent, on ways Under Coverage M, we wi l l no t pay medical expenses for

next t o the premises you o w n or rent, or because of your bc'dily injury:

operations. The accident must take place in the c o v e r - a g e t e r r i t o r y dur ing the pol icy period. 1 . t o any insured;

2. t o i> person hired t o do work for or o n behalf o f any We wi l l pay medical expenses only i f the expenses are insured or to a person hired t o d o work for or o n incurred or medically ascertained wi th in one year of the behalf of a tenant o f any insured; date of the accident and the injured person submits t o exam~nation, at our expense, by physicians of our choice 3, t o a injured on that part of the premises you as often as w e reasonably require. o w n or rent that the person normally occupies;

We w i l l make medical expense payments regardless of . LC. t o a person, whether or no t an employee of any in fault. These payments w i l l n o t exceed the applicable l imi t sured, if benefits for the b o d i l y i n j u r y are payable, of insurance. We wi l l pay reasonable medical expenses or must be provided, under any workers compen- for: sation or disability benefits law or a similar law;

1. first aid at the t ime of an accident; 5. t o a person injured whi le taking part in athletics;

6. included wi th in the p r o d u c t s - c o m p l e t e d o p e r - 2. necessary med~cal , surgical, x-ray and dental ser- a t i o n s hazard ;

vices, includrng prosthetic devices; and

7 . excluded under Business Liability Exclusions; 3. necessary ambulance, hospital, professional nursing

and funeral services. 8. arising out of the use of any n o n - o w n e d a u t o .

SECTiON II OPTIONAL COVERAGE -- -- O P T I O N A L COVERAGE

The fo l lowing Optional Coverage is subject to all the terms and conditions applicable t o Section I I of -this policy, except as otherwise provided for herein.

This Optional Coverage applies only as indicated in the Declarations.

-- - O P T I O N DO - D i r e c t o r s and O f f i c e r s L i a b i l i t y

1. We w i l l pay those sums that the insured becomes legally obligated tio pay as damages because of " w r o n g f u l a c t s " commitl.ed b y an insured solely in the conduct of their management responsibilities for the Condomini~~m/Asso~ciation.

2. This optional coverage does not apply to:

any dishonest. fraudulent, criminal or mall- cious act, including fines and penalties resulting from these acts:

any b o d i l y i n j u ry , p r o p e r t y damage, p e r - sona l i n j u r y or a d v e r t i s i n g i n j u r y liability;

profits or los:jes, including an accounting of these profits or losses, resulting from th'e purchase or sale of any securities;

salaries, compensation or bonuses of employees, directors or officers;

any failure to effect, rnaintain or procure any insurance policy or bond, including any failure to obtain am'ounts, forms, conditions or provisions on any insurance policy or bond;

damages arising out o f any transaction oh: the insured from which the insured w i l l gain any personal profi t or advantage wh ich is not shared equitably b y the CondominiumjAsso- ciation members;

violation of any federal or state civil rights law or local ordinance, including b u t not limited to discrimination o n account o f race, religion, sex or age; or

damages other than' money damages.

3 . When used in the provisions of this Option DO. the unqualified word insured means oriiy the fol lowing:

a. any of your directors or officers, collectively and individually, wh ich form your administrative body provided that each individual:

(1) is dr~I!/ elected by the uni t -owners to serve on the managing body of the Condominiurn/Association. and

(2) acts wi th in the scope of thetr duties on your behalf;

b. any of your m~?mbers, bu t only w i th respect to Their liability for your activities or activities they perform on your behalf as a member o f a committee appointed b y the administrative or managing body of the Condom~nium/Asso- ciation;

C. the Named Insured shown in the Declarations w i t h respect to l iabi l~ty because of " w r o n g f u l ac t s " cornmitted by an insured.

4. The most w e wi l l pay for damages because of " w r o r q f u l ac;ts" as a result of any one " o c c u r - rence" is the Coverage L - Business Liability l imit shown in the Declarations, This Coverage L l imit IS

also the most w e wi l l pay for the sum of all damages because of " w r o n g f u l ac ts" arising from all " occu r rences " during the policy period.

5. When used in the provisions of this Option DO:

a " u v r o n g f u l ac t s " means any negligent acts, errors, om~sstons or breach of duty d~rec t ly I

related to the operations of the Condo- m~niurn/Assoc~at ion.

b . " o c c u r r e n c e " means a " w r o n g f u l ac t " , i n - cluding any conduct related t o any of these. during the policy period, wh ich results in a claim made in writ ing or s u i t f i led n o later than one year from the end of the polrcy period.

6 . All loss or damag~s involving a single " w r o n g f u l act" , or series o f related " w r o n g f u l acts", caused by one or more persons is considered one " o c c u r - rence" .

7. This Option DO applies t o " w r o n g f u l ac t s " committed before this optional coverage became effective if the insured had n o knowledge of a claim or s u i t at -the effective date of this option and there.is no other applicable insurance.

SECTION ii OPTIONAL COVERAGE (co~:lt.) - -- --.----

8: Our Coverage I- l imit wi l l no t be increased because b. the number of persons or organizations who of: have susta~ned injury or damage; or

c . the number of claims made or' causes of a. the number of persons insured under this O p - ac:tions or s u i t s brought because of injury or

r ion DO; damage.

-- SECTION I i BUStNESS LiAELlLlTY AND MEllrlCAL PAYMENTS N U C L E A R LIABILITY EXCLUSIONS

p-

N U C L E A R c. under Coverage L - Bus~ness Liab~li ty, t o L l A B l L lTY b o d i l y i n j u r y or " p r o p e r t y d a m a g e " re- EXCLUSIONS sulting from the "haza rdous p r o p e r t i e s " o f

"nuc lea r m a t e r i a l " i f . 1 . This insurance does not appiy:

('I) the " n u c l e a r m a t e r i a l " . a . under Coverage L - Business Liability t o

b o d i l y i n j u r y or " p r o p e r t y damage":.

('I) w i t h respect t o wh ich an insured under the policy is also an i n s ~ ~ r e d under a n u - clear energy liability p'olicy issued b y Nuclear Energy Liability Insurance' Asso- ciation, Mutual Atomic Energy Liability Underwriters or Nuclear insurance As- sociation of Canada, or wou ld be an i n - sured under any such policy but for its termination upon exhaustion of its limit of liability; or

resulting from the "haza rdous p r o p e r - t ies" of " n u c l e a r m a t e r i a l " and w i th respect t o which:

(a) any person or organization is required t o maintain f~nanc ia l pro- tection pursuant to the Atomic En- ergy Act of 1954, or any l aw amendatory thereo-f; or

(b) the insured is or, had this policy not been issued, wou ld be entitled to indemr!ity from the United States of America, or any agency thereof, under any agreement entered into by the United States of America, or any agency thereof, w i t h any person or organization;

(a) is at any " n u c l e a r f a c i l i t y " owned by, or operated by or o n behalf of, an insured; o r

(b) has been discharged or dispersed therefrom;

( 2 ) the " n u c l e a r m a t e r i a l " is contained i n " s p e n t f u e l " or " w a s t e " at any t ime possessed, handled, used, processed, stored, transported or disposed o f by or on behalf of an insured; or

( 3 ) the b o d i l y injury or " p r o p e r t y d a m - age" arises out of the furnishing by an insured of services, materials, parts or equipment in connection w i th the planning, construction, maintenance, opera- t ion or use of any "nuc lea r f ac i l i t y " . If such facility is located wi th in the United States of America, its territories or possessions or Canada, th is exclusion applies only- t o " p r o p e r t y d a m a g e " t o such " n u c l e a r f a c i l i t y " and any property thereat.

2. As used in this exclusion:

a. " b y p r o d u c t m a t e r i a l " has the meaning given i t in the Atomic Energy Ac t o f 1954 or in any l aw amendatory thereof;

b. ~ ~ n d e r Coverage M - Medic:al Payments,' to b. "haza rdous p r o p e r t i e s " include radioactive, expense!: incurred w i th respect t o b o d i l y in- toxic or explosive properties;

j u r y resulting from the "haza rdous p r o p e r - . t:iesU o f " n u c l e a r m a t e r i a l " and arising ou t c. "nuc lea r f a c i l i t y " means: of the operation of a "nuc l~ea r f a c i l i t y " by any person or organization; (1 ) any "nuclear reactor":

FORM 3

SECTlON f l B U S i N E S S LIABILITY AND MEDICAL PAYMENTS NUCLEAR LIABILfTY EXCLUSIONS ( c o n t . ) -- - --

(2) any equipment or device designed or e. used f o r

(a) separat~ng the isotopes of uranium or pluronr uni;

f (b) processinc; or utilizing "spent

fuel"; or

53. (c) handling, processing or packagmg

"waste":

(3) any equipment or device used for the h. processing, fabricating or alloying of "special nuc l ea r mate r ia l " i f at any time the total amount of such material in the ci~stody of the insured at the prem- I .

ises where such equipment or device is located consists of or contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235; 1.

(4) any structu,re, basin, excavation, premises or place prepared or used fur Lhe storaee or disposal of "waste" ;

and includes the site on which any of the foregoing is located, all operations conducted on such site and all premises used for such operations;

d. "nuclear mater ia l " means "source rnate- rial", "special nuc:lear mate r ia l " or "by- p roduc t material":

"nuc lear re i tc tor" means any apparatus designed or used to sustain nuclear fission in a setf-supporting chain reaction or to contain a critical mass of fissionable materiai;

" p rope r t y damage" includes all forms of ra- dioacrive coritaminat,ion of property;

"source mater ia l " has the meaning given it in the Atomic Energy Act of 1954 or in any law amendatory thereof;

"special nuc lear mater ia l " has the meaning given it in the Atomic Energy Act of 1954 or ~n any law amendatory thereof;

"spent .fuel"' means any fuel element or fuel component, solid or liquid, which has been used or exposed to radiation in a "nuclear reactor" :

"was te " means any waste material:

(1) containing "byproduc t mate r ia l " other than t h ~ ~ tailings or wastes produced by the extraction or concentration of uranium or. thorium from any ore processed primarily for its "source mate r ia l " content; and

( 2 ) resulting from the operation by any person or organization of any "nuclear fa- c i l i t y " included under paragraphs c. ( I ) and c.(Z) of the definition of "nuclear fac:ility".

SECTION II DE-SIG NATION OF INSURED

WHO IS AN INSURED

1. If you are designated in the Declarations as:

sureds but only with respect to their duties as your officers, directors or trustees. Your ~tockholders are also insureds but only with respect .to their liability as stockholders.

a. an individual, you and your spouse are in- 2. Each of the following is also an insured:

sureds but only with respect to the conduct of a business of w h k h you are the sole owner;

b. a partnership or joint venture, you are an insured. Your members, your partners and their spouses are also insureds but only with respect to the conduc~ of your busmess;

c. an organization other than a partnership or joint venture, you are a n insured. Your executive officers, direct'ors and trustees are in-

a. your eniplovees, other than your executive officers, but only for acts within the scope of their ernplcyment by you. However, no employee is an insured for:

(1) bod i l y in ju ry or personal i n j u r y to you or to a fellow employee while in the coursc of his or her employment, or the spouse, child, parent, brother or sister of that fellow employee as a consequence of such bod i l y i n j u r y or personal i n -

SECTION I ! DESIGNATION OF INSURED ( c o ~ ~ t . ) --

j u r y -or for any oblicjation t o share darn- ages w i th or repay someone else w h o must pay damages because of the injury;

b o d i l y i n j u r y or persona1 i n j u r y dris- ing ou t of his cjr her providing or failing t o provide professional health care services;

p r o p e r t y d a m a g e to property. owned or occupied by or rented or loaned to that employee, any o f your other employees or any of your partners or mern- bers if you are a partnership or joint venture; Or

b o d i l y i n j u r y or p r o p e r t y d a m a g e arising out of the ownership. main-tenance, use or entrustmen.t t o others of any n o n - o w n e d a u t o or any agent or employee of an owner of any non- o w n e d a u t o ;

b. any person,, other than your employee, or any organizatiol-r whi le acting as y o u r real estate manager;

c. any person or organization having proper temporary custody of your property if you die but only:

(1 ) w i t h respect t o liability arising out o f the maintenance or use of that property; and

( 2 ) unti l your legal representative has been appointed;

d . your legal representative, if yoc~ die, but only w i th respect to duties as such. That representative will h.ave all your r ights and duties under this policy;

e. each individual uni t -owner o f the insured corrdominium, but only for liability arising out o f .the ownership, maintenance or repair of that port ion of the premises wh ich is not re-

served for that unit-owner's exclusive use or occupancy.

3. Wi th respect to m o b i l e e q u i p m e n t registered in your name under any motor vehicle registration law, any person is an insured wh i le driving such equipment along a publ ic highway w i th your permission. Any other person or organization responsible for the conduct of such person is also an insured but only w i t h respect to liability arising o u t of the operation of th8e equipment and only if n o other insurance of any k ind is available to that person or organization for this liability. However, no person or organization is an insured w i th respect to:

a. b o d i l y injury to a fel low employee o f the person driving the equipment; or

b p r o p e r t y d a m a g e to property owned by, renied to, in the charge of or occupied b y you or the employer of any person w h o is an insured under this provision.

4.. Any organizat~on you newly acquire or form, other than a pi3rtnership or joint venture, and over wh ich y o u maintain ownership or majority interest w i l l qualify as a Named Insured if there is n o other similar insurance available to that organization. Cov~srage under this provision is afforded only unti l the 90th day after you acquire or form the organ- izatijon or the end of the policy period, whichever is earlier. However, no person or organization is an insured w i t h respect to:

a. b o d i l y i n j u r y or p r o p e r t y d a m a g e that occurred before you acquired or formed the organization; and

b. p e r s o n a l i n j u r y or a d v e r t i s i n g injury arising out of an offense committed before you acquired or formed the organization.

N o person or organization is an insured w i t h respect t o the conduct o f any current o r past partnership or jo in t venture that is no t shown as a Named Insured in the Declarations.

SECTION I I BUSINESS LIABILITY AND MEDICAL PAYMENTS LIMITS OF INSURANCE

L I M I T S O F a. insureds; INSURANCE:

b. claims made or s u i t s brought; or I . The Limits of Insurance shown in the Declarations

and the rules be low f ix the most we w i l l pay re- c. persons or organizations making claims or

gardless of the number of: bringing su i t s .

FORM 3

SECTiiON I 1 BUSlMESS LIABII-BTY AND MEDICAL PA'f MENTS LIMITS OF lNSURANCEI (cont . ) ---- 2. The most we wi l l pay for all damages because of b. all other injury or damage, inc luding medical

b o d i l y i n j u ry , p r o p e r t y damage , p e r s o n a l in- expenses, arising from all o c c u r r e n c e s dur- j u r y , a d v e r t i s i n g i n j u r y and medical expenses ing the policy period is the General Aggregate arising out of any one o c c u r r e n c e is the (Other than PCO) l imit shown in the Decla-

Coverage L - Business Liability l imit shown in the rations. Thi: j General Aggregate applies separately 1.0 each location not on the same or Declarations. 8u.t the most w e w i l l pay for ail med- connecting lots. However, this l imitat ion does

ical expenses because clf b o d i l y i n j u r y sustained not apply to p r o p e r t y d a m a g e payable un- b y any one person is the Coverage M - Medical der the Property Damage Legal Liability cov- Payments limit shown in the Declarations. .erage in Section I1 of this policy.

3 . The most w e w i l l pay for: The limits of this pol icy apply separately t o each consecutive annual r ~ e r ~ o d and t o any remaining period of less than '12 months, starting w i t h the beginning of the

a. Or damagt' under the products- pol icy period shown in the Declarat~ons, unless the pol- operations hazard icy period is extended after issuance for an additional

all occur r lences during the PO^ period is period of less than 1 2 months. In that case, the addi- the Products-Completed Operations (PC01 t ional period w i l l be deemed. part of the last preceding Aggregate limit shown in the Declarations; period for purposes of determining the Limits o f lnsur- and ance.

-

SECTION I1 G E N E R A L CONDITIONS

GENERAL C O N D I T I O N S

1. B a n k r u p t c y . Bankruptcy or insolvency of the in - sured or of the insured's estate will no t relieve us o f our obligations under. this policy.

2. F i n a n c i a l R e s p o n s i b i l i t y Laws. When this pol icy is certified as proof of financial responsibility for the future under the provisions of any motor vehicle f i - nancial responsibility law, the insurance provided by this pol icy fo r b o d i l y i n j u r y or p r o p e r t y d a m a g e liability w i l l comply w i th the provisions o f the law to .the extenl. of the coverage and limits o f insurance required by that law.

With respect t o m o b i l e e q u i p m e n t to wh ich this insurance applies, w e wi l t provide any l~abil i ty, uninsured motorists, ~~nder insu red motori:;ts, no fault or other coverages required by any motor vehicle insurance law. We wi l l provide the required limits for those coverages.

The insured must repay us tor any payment w e wou ld not have had t o ]make under the terms of this pol icy except for this condit ion

3. D u t i e s in t h e E v e n t o f Occu r rence , C l a i m o r S u i t .

a. You musl. see t o it that w e are notified promptly of an o c c u r r e n c e that may lesult in a c la~m. N o t ~ c e should ~ n c l u d e

(1 ) how, when and where the o c c u r r e n c e took place; and

(2) the names and addresses of any injured persons and witnesses.

b. Uf a claim is made or suit is brought against any insured, you must see t o ~t that w e receive prompt writ ten notice of the claim or s u i t .

c. You and-any other involved insured must:

{ I ) immediately send uscop ies of any de- mands, notices, summonses or legal pa- i;lers received in connection w i th the claim or su i t ;

(2) authorize us to obtain records and other i~iforrnation;

(3) c:ooperate w i th us in the investigation. settlement or defense of the claim or s u i t ; and

(4) assisi. us, upon our request, in the enforcement of any r ight against any person or organization that may bel iable to the insured because o f injury or damage to wh ich this insurance may also apply.

d. Except a t their own cost, n o insureds wi l l voluntarily make a payment, assume any obl i -

28 F O R M 3

SECTION I ! GENERAL CONDITIONS jcont.) - -

gation or Incur any expense, other than for able under the terms of this policy or that a re i n f~ rs t aid, w~ thou t our consent. exc:ess of the applicable limit of insurance. An

agreed settlement means a settlement and release 4. Legal Ac t ion Against Us. No person or organ- of liability signed by us, the insured and the claim-

ization has a right under this policy: ant or the claimant's legal representative.

a. to join us as a party or otherwise bring us into a .suit asking for damages from an insured; or

b. to sue us on this policy unless all of this policy's terms have been fully complied with.

A person or organization may sue us to recover on an agreed settkment or on a final judgment against an insured obt,ained after an actual trial. However, we wi l l not be liable for damages that are not pay-

5. Separat ion o f Insureds. Except with respect to the Limits of Insurance and any rights or duties specifically assigned in this policy to the first Named Insured, this insurance applies:

a. as if each Named Insured were the only Named Insured; and

b. separately to each insured against whom claim is made or s u i t is brought.

S E C T I O N I I DEFlNITlONS

DEFINITIOINS

This section contains the definitions of the words printed in bold face in Section II of this policy. I t is an integral part of the policy. 'The definitions appearing below wi l l be applied as if they were included each time the words they define are used in Section I1 of this po l~cy.

When used in the provisions applicable to Section II of this policy (includi1;lg endorsements forming a part of this policy):

1. adver t i s ing in ju ry means injury arising out of one or more of the following offenses:

a. oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;

b. oral or written publication of material that vi- olates a person's right of privacy;

c. misappropriation of advertising ideas or style of doing business; or

d. ir~fringerr~ent of copyright, title or slogan;

2, a u t o means a land motor vehicle, trailer or semi- trailer designed for travel on public roads, including any attached machinery or equipment. But au to does not include mob i l e equ ipment ;

3 . b o d i l ~ r injury means bod i l y in ju ry , sickness or disease sustai~qed by a person, including death re-

sulting from the bod i l y in ju ry , sickness or disease at any 'time;

4. coverage t e r r i t o r y means:

a. the United States of America (including its territories and possessions), Puerto Rico and Canada;

b. international waters or airspace, provided the injury or damage does not occur in the course 0.I travel or transportation to or from any place nl3t included in a, above; or

c. all parts of the world if:

('I ) the injun/ or damage arises out of:

(a) goods or products made or sold by you in the territory described in 4.a above; or

(b) the activities of a person whose home is in the territory described in 4.a. above but is away for a short time on your business;

(2) the insured's responsibility to pay damages is determined in a su i t on the mer- its In the territory described in 4.a. above or in a settlement we agree to;

5. hired a u t o means any a u t o you lease, hire or borrow. This does not include any a u t o you lease. hire or borrow from any of your employees or

FORM 3

members of their households, or from any partner or executive officer of yours;

6 . i m p a i r e d p r o p e r t y means tangible propefly, other than y o u r p r o d u c t lor y o u r w o r k , that cannot be used or is less useful because:

a. it incorporates y o u r p r o d u c t or y o u r w o r k that is. known or thought t o be defective. de- ficient, inadequate or dangerous; or

b. you have failed t o fulf i l l the terms of a contract or agreement;

provided the repair, replacement, adjustment or removal of y o u r p r o d u c t or y o u r w o r k or your fulfi l l ing the terms of the contract or agreement can restore the i m p a i r e d p r o p e r t y t o use;

7. i n s u r e d c o n t r a c t :

a. means:

a sidetrack agreement;

any easement or license agreement except In connection w i th cons~ruc t ion or demolit ion operations on or w i th in 50 feet o f a railroad:

an obliga.tion, as required by ordinance, t o indemrnify a municipality, except in connection wi th wo rk for a municipality;

an elevator maintenance agreement; or

.that part of .any other contract or agreement pertaining to your business, in- c luding an indemnification of a municipality in connection w i th work performed for a municipality, under wh ich you assume the tort liability of another party t o pay damages because o f b o d i l y i n j u r y or p r o p e r t y damage t o a third person or' organization if t he contract or agreement is made prior t o the b o d i l y i r ~ j u r y or p r o p e r t y damage . Tort iiability mlzans a liability that wou ld be imposed by law in the absence of any contract or agreement;

b. does not include that part of any contract or agreement:

(1 ) that indemnifies any person or organiza- t i011 for b o d i l y i n j u r y or p r o p e r t y d a m a g e arising ou t of construction or demolit ion operations w i th in 50 feet o f any ra~lroad property and affecting any railroad bridge or trestle, track, roadbed, tunnel, underpass or crossing;

(2) that indemnifies an architect, engineer or surveyor for injury or damage arising ou t of:

(a) preparing, approving or fai l ing t o prepare or approve maps, d raw~ngs, opinions, reports, surveys, change orders, designs or speclf icat~ons; or

(b) giving d~rect ions or instructions, or failing t o glve them, if that is the primary cause of the injury or damage;

(3) under which the insured, if an architect, engineer or surveyor, assumes liability for injury or damage arising out of the iri!;ured's rendering or failing t o render pr.ofessional services, including those listed in (1) above and supervisory, in - spection or engineering services; or

(4) that indernnif ies any person or organiza- t ion for damage because of p r o p e r t y d a m a g e to premises rented to or occupied by you arising out of any insured loss in Section I of this policy;

l o a d i n g o r u n l o a d i n g :

a . means the handling o f property:

(1 ) after it is moved from the place where it is accepted for movement into or onto ari aircraft, watercraft or a u t o ;

( 2 ) whi le it is in or on an aircraft, watercraft 01' a u t o ; or

(3) whi le it is being moved f rom an aircraft, watercraft or a u t o t o the place where it i s finally delivered;

b. does not include the movement of property b y means of a mechanical device, other than a hand truck, that is not attached t o the aircraft, v~atercraft or au to ;

FORM 3

SECTION !I DEFINITIONS ( c a n t . )

9. m o b i l e e q u i p m e n t :

a. means any of the fo l lowing types o f land vehicles, including any attached machinery or equipment:

bulldozers, :arm machinery, forklifts and other vehicles designed for use principally off public roads;

vehicles maintained for use solely on or next to premises you o w n or rent;

vehicles that travel on crawler treads;

vehicles, whether self-propelled or not, on \ ~ h i c h are permanently mounted:

(a) power cranes, shovels, loaders, diggers or drills; or

(b ) road construction or resurfacing equipment such as graders, scrapers or rollers;

vehcles not described iri ( I ) , ( 2 ) , (3) or (4) above that are not self-propelled and are rna~ntained primarily t o provide m o - bility t o permanently attached equipment of the fol lowrng types:

(a) air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or

(b) cherry pickers and similar devices used t o raise or lower workers; .

vehicles not described in ( I ) , ( 2 ) , ( 3 ) or (4) above maintained primarily for pur - poses other than the .transportation o f persons or cargo;

b. does no't include self-propelled vehicles w i th the follo'wing types of permanently attached equipment which w i l l be au tos :

(1 ) equipment designed primarily for:

snow removal:

road maintenance but not construction or resurfacing; and

street clean~ng;

(2) cherry pickers and similar devices mounted on automobile or truck chassis and used 10 raise or lower workers; and

( 3 ) air compressors, pumps and generators, including spraying. welding, building cleaning, geophysical exploration, l ight- ing and wel l servicing equipment;

n o n - o w n e d a u t o means any a u t o you do not own, lease, hire or borrow which is used i n connection w i th your business. However, i f you are a partnership, a n o n - o w n e d a u t o does no t include any a u t o owned by any partner;

o c c u r r e n c e means:

a . an accident, including continuous or repeated exposure to substantially the same general harmful conditions which result in b o d i l y i n - j u r y or p r o p e r t y damage; or

b, the commission or an offense, or a series of similar or related offenses. wh ich results in plersonal i n j u r y o r a d v e r t i s i n g i n j u r y .

For purposes of this definition, b o d i l y i n j u r y or p r o p e r t y damage resulting from the use of reasonable force to protect persons or property w i l l b e considered an accident:

plersonal i n j u r y means injury, other than b o d i l y i n ju ry , arising ou t of one or more of the fo l lowing offenses:

false arrest, detention or imprisonment;

malicious prosecution;

wrongful eviction from, wrongful entry into, or invasion o f the right o f private occupancy of a room, dwell ing or premises that a person occupies, by or on behalf o f its owner, land- lord or lessor;

oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods. products or services; or

oral or written publication of material that vi- olates a person's right of privacy;

p o l l u t a n t s means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and

FORM 3

waste. Waste inciudes materials to be recycled, re- conditioned or reclaimed;

14. p roduc ts -comple ted operat ions hazard:

a. includes all bod i l y i n j u r y ana p r o p e r t y damage arising out of you r p r o d u c t or you r w o r k except producxs that are still in your physical possession or work that has not yet been completed or abandoned. The b o d - i l y i n ju ry or p roper ty damage must occur away from premises you own or rent unless your busine-ss includes the selling, handling or distribution of your p r o d u c t for con- sumption on premisles you own or rent.

Your w o r k wilt be deemed completed at the earliest of thie following times:

(1) when a11 of the work called for in your contract has been completed;

(2 ) when all of the work to be done at the site has been completed if your contract calls for work i3t more than one sire; or

(3) when that part of the work done at a job site has been put to its ~ntended use by any person or organization other than another contractor or subcontractor workin~g on the same project.

Work tha-t may need service, maintenance, correction, repair or replacement, but which is otherwise complete, will be treated as completed;

b. does not include bod i l y i n j u r y or p rope r t y damage arising out of:

the transportation of property unless the injury or damage arises out of a condition in or on a vehicle created by the loading or un load ing of it; or

the existence of tools, uninstalled equipment or abandoned or unused ma- teriais:

15. p rope r t y damage means:

a, physical injury to or destruction of tangible property, including all resulting loss of use of that property. All such loss of use wil l be considered to occur at the time of the physical injury that caused it: or

b. loss of use of tangible property that is not !

physically injured or destroyed, provided such !

loss of use is caused by physical injury to or destruction of other tangible property. All such loss of use wilf be considered to occur at the time of the occur rence that caused it;

I

16. su i t :

a means a civlil proceeding in a court of law in w h ~ c h damages because of bod i l y in ju ry , p rope r t y damage, personal i n j u r y or ad- ve r t i s ing in ju ry to w h ~ c h t h ~ s Insurance ap- p l~es are alleged;

b. includes:

(1) an arbitration proceeding in which s~rch damages are claimed and to which you must submit or do submit with our consent;

(2) any other alternative dispute resolution proceeding in which such damages are claimed and to which you submit with our consent;

17. you r p roduc t :

a. means:

(1) any goods or products, other than real properly, manufactured, sold, handled, distributed or disposed of by:

(bl) others trading under your name; or

(c) a person or organization whose business or assets you have acquired; and

( 2 ) containers (other than vehicles), materials, parts or equipment furnished in connection with such goods or products;

b. includes:

(1 ) warranties or representations made at ariy time with respect to the filness, quality, durability, performance or use of any of the items included in a . ( l ) and a.(2) above; and

SECTiON [ I DEFlNlTlONS (cont.) -- ---...F.-

(3) the provrding of or fa~lure to provlde (2) materials, parts or ecjulpment furnished warnings or instructions; in connection wi th such work or oper-

ations;

C. does not include vend~ng machines or other property rented to or located for the use of b. includes:

others but not sold, (1) warranties or representations made at

18. you r \ ~ ~ r k :

a. means:

(1) work or operations performed by you or on yolur behalf; and

any time with respect to the fitness, quality, durability, performance or use of any of the items included in a.( l ) and a.(2) above; and

(2) the providing of or failure to provide warnings or instructions.

SECTlON I AND SECTION I I C O M M O N CONDITIONS

SECTION t A N D SECTION I1 C O M M O N CONDITIONS

The following Conditions apply to both Section 1 and Section !I of this po l~cy except as otherwise indicated.

1. Cancel la t ion. The first Named lnsured shown in the Declarations may cancel this policy by mailing or delivering to us advance written notice of cancellation.

We may cancel thrs po l~cy by mailing or delivering to the flrst Named lnsured written notice of can- cellatlor1 at least

a. 10 days before the effective date of cancellation if we cancel for nonpayment of premium;

b. 30 days blsfore the effective date of cancellation if we cancel for any other reason.

We wi l l mail or deliver our notice of cancellation to the first Named Insured's last mailing address known to us. I f notice is mailed, proof of mailing wi l l be sufficient proof of notice. Such notice o f cancellation wil l state the effective date of cancei- lation. The policy period wi l l end on that date.

If this \policy is cancelled, we wil l send the first Named Insured any premium refund due. If we cancel, the refund wilt be pro rata. If the first Named lnsured cancels, the refund may be less than pro rata. The cancdlation wi l l be effective even if we have not made or offered a refund.

2 . Changes. This policy contains all the agreements between you and us concerning the insurance afforded. The first Named lnsured shown in the Dec- laration:; is authorized to make changes in the terms of this policy wi th our consent. This policy's terms can be amended or waived only by endorsement issued hy us and made a part of this policy.

3. Concealment , M is represen ta t ion o r Fraud. Thi!; policy is void in any case of fraud by you as it relates to the policy at any time. I t is also void if you or other insured intentionally conceal or rnis- represent a material fact concerning:

a. this poiicy;

b. thc covered propertv:

c. your interest in the covered property; 01

d. a claim under this policy.

4. Examina t ion o f Your Books and Records. We may exsmlne and audit your books and records as they relate to this policy at any time during the policy period and up to three years afterward.

5. Inspect ions and Surveys. We have the right but are not obligated to make inspections and surveys at any l.ime, give you reports on the conditions we find and recommend changes. Any inspections, surveys, reports or recommendations relate only t o insurability and the premiums to be charged.

We do not:

a. make safety inspections;

F O R M 3

SECTION I AND SECTION II C O M M O N C B N D X I O N S ( cen t . ) -

b. undertake t o perform the duty of any person or organization to p rov~de for the health or safety o f workers or the pub l~c ;

c. warrant that conditions are safe or healthful: or

d. warrant that conditions comply w i t h laws, regulations, codes or standards.

This condit ion applies not only t o us but also to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommendations.

6 l n s u r a n c e U n d e r T w o o r M o r e Coverages. If t w o or more of this policy's coverages apply t o the same loss or damage, we will no t pay more than the actual amount of the loss or damage.

7. L ibe ra l i za t i on . If w e adopt any revision that wou ld broaden the coverage under this pol icy w i thout additional premium wi th in 45 days prior t o or during the policy period, the broadened coverage wi l l immediately apply t o this pol icy.

8. O t h e r lnsurance.

a. Section I

(1) If loss covered by th is pol icy 1s also covered by other insurance writ ten in the name of the insured upon the same plan, terms, condit ions and provisions as contained in this policy, w e w i l l no t pay for a greater proport ion o f the covered loss than this policy's Limit of lnsurance bears t o the total amount o f Insurance covering such loss.

( 2 ) I f at the t ime of loss there is insurance, other than that described in i tem a.( l) above, covering the same loss covered b y this policy, w e w i l l pay only for the amount of covered loss in excess of the amount du~e f rom that other insurance whether you can col lect o n it or not. However, w e w i l l n o t pay more than the Limi t of lnsurance applicable to Section I o f this pol icy.

(3) If, at the t ime of loss, a unit-owner has other insurance covering the same property as this insurance, this insurance is intended t o be primary, and not t o con- tr ibute w i th such other insurance.

- --

b. Section I1

(1) The insurance provided under Cov'erage L - Business Liability is excess insurance over any other insurance not w r i ~ t e n by us wh ich w o u l d apply if this pol icy had not been wr i t ten.

( 2 ) The total insurance p rov~ded under Cov- erage L - Buslness Liability and any other policy written by us vvill no t exceed the largest lrmit of insurance applicable under any one of these po l~c ies wrltten b y us.

(3) l terr~s b. ( l ) and b.(2) above d o no t apply t o insurance writ ten specifically as excess t o cover over the Limits o f Insurance applicable to Section II of this policy.

(4) The insurance provided under Coverage I- - Business Liabi l i ty is excess over any property Insurance (including any deductible portion) available to the insured that insures for direct physical loss or damage t o property in the care, custody or control of the insured including, but no t limited to, Fire, Extended Coverage, Builder's Risk, Installation Risk or similar coverage.

(5) When this insurance is excess, w e wi l l have no duty under Coverage L - Busi- ness Liability t o defend any claim or s u i t thal: any other insurer has a duty t o defend. I f no other insurer defends, we wi l l undertake to d o so but w e w i l l be entitled t o the insured's rights against all tho'se other insurers.

9. P r e m i u m s . The first Named Insured shown in the Declarations is responsible for the payment of all premiums and w i l l be the payee for any return premiums w e pay.

The premium shown in the Declarations was com- puted based on rates in effect at the t ime the policy was issued. Undeclared exposures or change in your business operation, acquisition or use of locations may occur during the policy period that are not shown in the Declarations. I f so, w e may require an addi-tional premium. That premium w i l l be determined in accorclance w i th our rates and rules then in effect.

SECTtOlBi I A N D SECTION i l C O M M O N CONCIlTiONS (cone.)

P ---- 10. . T r a n s f e r o f R i g h t s of R e c o v e r y Against Oth -

e r s t o Us.

(1) If any person or oraanization to or for whom w e make payment under this po l - icy has rights t o recover damages from another, those rights are transferred t o us to the extent o f our payment. rhat person or organization must d o every- thing necessary to secure our r ights and must d o nothing after loss t o impair them.

( 2 ) You may waive your r ights against another party in writ ing prior to a loss t o your covered property. After a loss t o your covered property, y o u may waive your rights against another party in wr i t - ing only if, at the t ime of loss, tha t party is one of the fo l lowing:

(a) :someone covered by this insurance;

(b ) a bus~ness firm o w n e d or controlled by you: or

(c) a business f irm tha t o w n s or con- trols you.

( 3 ) You lnay also accept the usual bills o f lading or shipping receipts l imi t ing the liabiiity of carriers w i thou t restricting your Insurance.

(4:) W e waive our rights t o recover payment irom any uni t -owner o f the Condomin-

iumiAssociation described in the Decla- rations, excPpt as provided for in Sec- t ion I Extensions o f Coverage, Extension 1 O., Maintenance Fees Receivable.

b. Section I I

(1) If the insured has r ights t o recover all or part of any payment w e have made under this policy, those rights are transferred t o us. The insured must d o nothing after loss to impair them. A t our request, the insured wi l l br ing s u i t or transfer those rights t o us and help us enforce them.

( 2 ) The transfer of insured's rights applicable t o Section II o f this condit ion does not apply t o Coverage M - Medical Pay- ments.

1'1. T r a n s f e r o f Y o u r R i g h t s and D u t i e s Under T h i s Policy. Your rights and duties under this pol icy may not be transferred w i thou t our writ ten consent except in the case of death of an individual Named Insured.

I f you die, your rights and duties will be transferred t o your legal representative b u t only whi le acting wi th in the scope of duties as your legal representative. Clntil your legal representative is appointed, anyone having proper temporary custody of your property will have your rights and duties bu t only w i t h respect to that property.

12. C o n f o r m i t y to Sta te Law. When a provision of this pol icy is in confl ict w i t h the applicable law of the sta'ce i n wh ich this policy is issued, t he l aw of the state will apply.

IN 'MTNESS WHEREOF, this Company has executed and attested these presents; but this pol icy shall no t be valid unless countersigned bv the duly authorized Agent of this C o m ~ a n y at the agency hereinbefore mentioned.

Secretary

The Board of: Directairs, in accordance with Article Vl(c) of this Company's Articles of Incorporation, may from time t o time distribute equitably t o the holders o f the participating policies issued by said Company such sums o u t o f i ts earnings as in its judgment are proper.

FORM 3

AMENDATORY ENDORSEMENT (Illinois)

SECTION I CONDITIONS

The foilowing is added to Legal Actlon Against Us:

The two year period for legal action against us is extended by the number of days between the date the statement of loss is filed with us and the date we deny the claim in whole or in part.

SECTION I AND SECTION I1 COMMON CONDITIONS

The Cancellation Condition is replaced by the following:

Cancellation.

1. Thle first Named Insured shawn in the Declarations may cancel th~s policy by ma,iling or delivering to us advance written~ notice of cancellation.

2. Except as provided in 4. and 5. below, if this policy has been in effect for 60 days or less and is not a renewal with us, we may cancel this policy by mailing to you written notice of cancellation at least:

a.. 10 days before the effective date of canc~ellation if we cancel for non- payment of premium; or

b. 30 days before the effective date of cancellation if we cancel for any other reason.

3. Except as provided in 4. and 5. below, if thi,s policy has been in effect for 61 days or more or if it is a renewal with us:

a.. we may cancel by mailing to you written notice of cancellation at least:

(1) 10 days before the effective date of cancellatiorr if we cancel for non-payment of premium; or

cel for any other allowable reason;

b. we may cancel only for the following reasons:

non-payment of premium;

the pol icy was obta ined through a material misrepresentation;

any insured has violated any of the terms and conditions of the policy;

the risk originally accepted has measurably increased;

certification to the Director of Insurance of the loss of rein- surance by us which provided coverage to us for all or a sub- stantiaP part of the underlying risk involved; or

a determination by the Direc- tor of Insurance that continu- ation of the policy could place us in violation of the laws of this State.

4. Real Property Other Than Residential Properties Qccupled By Four Fami- lies or Less. This provision applies only if this policy covers real property other than residential property occupied by four families or less. If one or more of the following conditions exist at any building that IS, covered by this policy, we may cancel this policy by mailing to you written notice of cancellation at least 30 days before the effective date of cancellation:

a. After a fire loss, permanent repairs to the building have not started within 60 days after satisfactory adjustment of loss, unless the delay is a. direct result of a labor dispute or weather conditions;

(2) 60 days before the effective dzte of cancellation if we can-

(CONTINUED)

6. .The building has been unoccupied 60 or I-nore consecutive days. This does not apply to:

(1) seasonal unoccuparucy; or

(2) buildings which are undergo- ing construction, repair ar re- construction and are properly sew red against unauthorized entry;

c. The building, because of its physical condition:

(1) i i j subject to an outstanding crrder to vacate;

(2) is subject to an o~~tstanding demolition order; or

(3) has been declared unsafe in accordance with a.pplicabie law;

d. Heat, water, sewer service or public lighting have not been connected to the building for 30 or rnore consecutive days.

If we cancel this policy, our notice of carlcellaticln will be sent by certified mail and regular mail to your address of record.

5. Residential Properties Occupied By Four Families or Less. This provision applies when this policy covers real properly used principally for residential purposes up to and including a four family idwelling or any household or personal property that is usual or incidental tothe occupancy to any premises used for residential! purposes:

a.. we may cancel this policy by mailing to you written notice of cancellation at least:

10 days before the effective date of cancellation if we cancel for non-payment of premium; or

30 days before the effective date of cancellation if we cancel for any other reason;

b. after this policy has been in effect for one year, or if i t is a renewai with us, we may cancel only for one or more of the following reasons:

(1 :I non-payment of premium;

(2:l the policy was obtained by misrepresentation or fraud; or

(3:) any act which measurably increases the risk originally insured.

WE? will mail our notice of cancellation to you at your last mailing address known to us. A copy will be sent to your agent of record. Proof of mailing will be sufficient proof of notice. Our notice of can- ce i la t ion wi l l inc lude a speci f ic exlplanation of the reason for canceila- tion and will state the effective date of caincellation. The policy period will end on that date.

If this policy is cancelled, we will send the first Na.med Insured any premium refund due. If we cancel, the refund will be pro rata. If the first Named lnsured cancels, the refund may be less than pro rata. Cancellation will be effective even if we have nlot made or offered a refund.

The following Condition is added:

1. Except as provided in 2. below, if we decide not to renew this policy, we will miail written notice of non-renewal to you and the mortgagee or lien holder at the la:jt mailing address known by us at least 60 days before the expiration date of the policy. Proof of mailing will be sufficient proof of notice.

We will also mail a copy of our notice to your ahgent of record at their lad known addresses. Our notice of non-renewal will provide a specific explanation of the reasons for non-renewal.

2. The following applies when this policy cc>ver:j real properiy used principally for resideniial purposes up to and including a four family dwelling or any household or personal property that is usual or inci-

(GONTIN U ED)

dental to the occupancy to any premises used for residential purposes:

a. i fwe decide not to renew this policy, we wjll mail written noiice of non-re- new4 to you and the mortgagee Or lien holder at the last mailing address linown by us at least 30 days before the expiration dale of the policy. Proof of mailing will be sufficient proof of notice.

We will also mail a copy of our notice to your agent of record at their last known addresses.

Our notice of non-renewal will provide a specific explanation of the reason for non-renewal. No notice is required if we have manifested our w~~llingness to renew directly to you;

b. if this policy has been effective with us or renewed by us for five or more years, we may non-renew only if:

(1) the policy was obtained by misrepresentatian or fraud;

(2) the risk originally accepted has materially increased; ar

(3) the insured has received at least 60 days n o t i e of our intention not to renew this pol- ICY.

THE FOLLCIW ING ADDITIONAL PROVISIONS ARE APPLICABLE TO POLICIES INSURING CONDOMINIUMS:

SECTION 11 DESlGNATlO N OF fNSURED

The following Is added to WHO IS AN INSURED:

Each of'the following is also an insured:

a. the developer in the developer's capacity as a unlit-owner, but only with respect to the developer's liability arising out of

the o\vnership, maintenance or repair of that portion of the premises which is not owned solely by the developer. HOW- ever, the insurance afforded with respect to the developer does not apply to liability f~or acts or omissions as a developer;

each other ~lnit-owner of the described condominium, but only with respect to liability arising out of the ownership, maintenance or repair of that portion of the prernises which is not owned solely by the unit-owner;

any employee or agent of yours and any employee or agent of the management agent, \ ~h i l e acting within the scope of such d~lties for you. However, the insur- ancie afforded to any employee does not apply to:

(1 ) boldily injury to:

(a) a fellow-employee arising out of or in the course of his or her employment; or

(b) an employer, or if the employer is a partnership or joint venture, any partner or mern- ber {:hereof;

(2) property damage to property owned or occupied by or rented or loaned to an employee, any of your other employees, or any of your partners or members (if you are a partnership or joint venture).

SECTION I AND SECTION II COMMON C;ONOITIONS .

The following is added to item b. of Transfer of Rights of Recovery Against Others t o Us:

We waive our right OF recovery against any person or organization included under the WHO IS AN INSURED provision of SEC- TION li DESIGNATION OF INSURED.

POLICY ENDORSEMENT (Comdominium/Assor:iatiorr)

SECTION I PROPERTY COVERAG%!S

In all policies, under COVERAGE A - BUILDINGS, item 5. is replaced by the following:

5 , any of the following types of property contained within a unit, regardless of ownership:

a. fixtures, improvements a.nd alterations that are a part of the building or structure; and

b. appliances, s u c h as those used for refrigerating, ventilating, cooking, dishnrashing, laundering, security or housekeeping;

In all policies, uncler PROPERTY NOT COV- ERED, item '1 1. is replaced by the following:

1 1. trees, pla~its, lawns and shrubs other tham those you own as merchandise held in storage or for sale, except as prcwided in the Extensions of Coverage;

In SPECIAL FORM 3 policies only, uncler PROP- ERTY SUBJECT TO LIMITATIONS, item 10. is deleted and item 3.d. is replaced by the following:

d. $2.50 for :stamps, tickets and letters of credit, except as provided in the Money a.nd Securities Optional Coverage;

SECTION I LOSSES lN!SUREOi AND LOSSES NOT INSURED

In SPECIAL FORM :3 policies only, under LOSSES NOT INSURED, the following is added to item 1 .d.:

(4) water that backs up from a sewer or drain or enters into and ovetflows from within a sump pump, sump pump well or

any other system designed to remove subsurface water drained from the foundation area, except as provided in the Back-up of Sewer or Drain Extension of Coverage. -

SECTION I EXTENSlOPllS CIF COVERAGE,

In SPECIAL FORM 3 policies only, under EXTEN- SIONS OF COVERAGE, item 24. is replaced by the following:

24. Back-up of Sewer or Drain.We will pay for any accidental direct physical loss ca.use~cl by water that backs up from a sewer or drain or enters into and over- flc~ws from within a sump pump, sump pump well or any other system designed to rernove subsurface wafer drained from the foundation area.

This coverage does not apply if the loss is caused by your negligence. ---

SECTION I OPTOONAL COVERAGIES

In all policies, the following is added to OP- TION ED - IEmplayee Dishanesty:

10. When used in the provisions of this Op- tion ED, "employee" means any natural person who receives compensation for working in your regular service in the ordinary course of your business as well as your directors and officers whether compensated or not, except while performing outside the scope of the normal d~uties of such directors and officers. But this does not include any broker, con- signee, contractor or other agent or rep- resentat ive of the same general character.

In all policies, the following is added to OP- TION MO - M'oney a n d Securities:

6. When used in the provisions of this Op- tion Ma:

a. "rnont~y" means:

(1 ) currency, coins a n d bank notes in current use and having a face value;

(2) travelers checks, register checks and money crders held for sale to the public;

b. "securities" means negotiable and nonnegotiable instruments or con-

tracts representing either 'money" or other prcperty and includes:

I ) tokens, tickets, revenue and other stamps in current use represented by either actual stamps or unused value in a meter;

(2) evidences of debt issued in connection with credit or charge cards which are not issued by you;

b l~ t does not include "money".

All otlier policy provisions apply.

In accordance with the Terrorism Risk Insurance Act of 2002, this disclosure is part of your policy.

Policyholder Disclosure Notice of Terlrorisrrt Insurance Coverage

Coverage for acts of terrorism is already included in your current policy. You shoujd know that, effective November 2Ei,2002, under your existing coverage any losses caused k~y certified acts of terrorism would be partially reimbursed by the United States under a formula established by .federal law. Under this formula, the United States pays 90% of covered terrorism losses exceeding the statutorily established deductible paid by the insurance company providing the coverage.

This policy does no1 exclude coverage for "insured losses" that result from acts of terrorism, as defined in the new law, There is no separate premium charged to cover insured losses caused by terrorism. Your insurance policy establishes the coverage that exists for insured losses, This notice does not expand coverage beyond l.hat described in your policy,

Please contact your agent if you have questions about the new law.

(CONIN UED)

FIJNGUS {lNCLUDING MOLD) EXCLLJSlOlN ENDORSEMENT

SECTION I LOSSES INSURED A ~ N D LOSSES NOT INSURED

In SPECIAL FORM 3 and BUILDERS' RISK policies only, under LOSSES NOT INSURED, items 2.d. and 2.k. are repl'aced by the following:

d, smog, wear, tear, rust, corrosion, decay, detcxioration, hidden or Iatent defect or any quality in property that causes it to damage or destroy itself,

But if accildental direct physical loss by any of the "Specified Causes of Loss" or by building glass breakage results, we will pay for that resultirig loss;

k. repeated discharge or continuous or repeated sleepage or leakage of water, or the presence or condensation of humidity, moisture or vapor, that occurs over a period of time;

In all policies, the following is added to item 1. under LOSSES NOT INSURED:

i . growth, proliferation, spread or presence of "liungus", including:

(1) any loss of use or delay in rebuilding, repairing or replacing covered property, including any associated cost or expense, due to interfererice at the described premises or location of the rebuilding, repair or replacement of that property, by "fungus";

(2) any remediation of "funy us", including the cost or expense to:

(a) remove the "fungus" from covered property or to repair, restore or replace that property;

(b) tear ou-t and replace any part of the building or other property as needed to gain access to the "fungus"; or

(c) contain, treat, detoxify, neutralize or dispose of or in any way respond to or assess the effects of the "fungus";

(:3) the cos8t of any testing or monitoring (of air or property to confirm the type, ,absence, presence or level of "fungus", ~ ~ h e t h e r performed prior to, $during or after removal, repair, res- toration or replacement of covered property.

This exclusion does not apply if "fungus" rlesul.ts from an accidental direct physical loss caused by fire or lightning.

"Fungus" means any type or form of fungi, including mold or mildew, and any mycotoxins, spores, scents or byproducts produced or released by fungi.

In BASIC FORM 1 policies only, the following is added to item 2. under LOSSES NOT INSURED:

g. repeated discharge or continuous or repeated seepage or leakage of water, or the presence or condensation of humidity, rrioisture or vapor, that occurs over a period of time;

--- SECTION II CDMPRE I-IEMSBVE BUSINESS LL4BILITY

In ail policies, the following exclusion is added under BUSINE:SS LIABILITY EXCLUSIONS:

to any:

a, bodily injury, property damage, personal injury or advertising injury arising out of the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or presence of any fungus;

(1) at or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any insured; or

(12) t i t or from any premises, site or Ioca- tion 011 which any insured or any contractor or subcorltractor working directly or indirectly on behalf of any insured is or was at any time performing operations;

CONTINUED

b, loss, cost 01. expense arising out of any: responding to or assessing the - effects of fungus.

( 1 ) request, demand or order that any insured or o th~ rs test for, monitcr, SECTION II clean up, remove, contain, treat, DEFINITIONS detoxify, neutralize, remediate or In all policies, the following definition is added dispose of or in any way respond to under DEFINITIONS~ or assess the effects of fungus; or

-

(2) claim or suit for damages because fungus means any type or form of fungi,

of testing for, monitoring, cleaning including rriold or mildew, and any mycotoxins, spores, scents or byproducts produced or up, removing, containing, treating,

detoxifying, neutralizing, remediat- released by fungi.

ing or disposing of, or in any waj, All other policy provisions apply.

INTERIOR BUILDING DAMAGE IENDORSEMENT (Form 3 Only)

For an additional premium, the following is deleted From SECTION I - PROPERTY SUBJECT TO LIMITATIONS:

6. to the interior of any building or structure, or the property inside any building or structure, caused by rain, snow, sleet, ice, sand or dust, whether driven bywintl or not, unless:

a. the building or structure first sustains damage by an insured loss to its roof or walls through which the rain, snow, sleet, ice, sand or dust enters; or

b. the Ictss is caused by thawing of snow, sleet or ice cm the building or structure;

All other provisions 13; the policy apply.

(CONTINUED)

POLICY ENDORSEMENT' (Condom iniumlAssociation)

SECTION I PROPERTY COVERAGES

Under Coverage B - BtlSlNESS PERSONAL PROPERTY, items I . , and 2 , are replaced by the following:

1. property that you own, lease from others or rent from others, or that is loaned to you ;

2 . property of others that is in your care, custody or control, unless provided for in item 1 , , immediately above; and

SECTION I OPTIONAL COVERAGES;

OPTION ME -, Mechanical Breakdown is deleted.

SECTION I DEDUCTIBI-EES

Under DEDUCTIBLE:S, the following is deleted:

3. $250 from the arnount of all loss in any one occurrence under the Mechanical Breakdown optional coverage when Option MB is designated in the Declara- tions;

-- SECTION I CONDITIONS

Under CONDITIONS, paragraph b. in item 2. Valu- ation is replazed by the following (NOT APPLICA- BLE if ACTUAL CASH VALUE - CONTENTS is shown in the Declarations):

b. actual cash value as of the time of loss to the following cove red property:

(1) used or second-hand merchandise held in stora.ge or for sale;

(3) works of art, antiques or rare articles, including etchings, pictures, statuary, marbles, bronzes, porcelains and bric-a-brac;

(4.) property of others that is in your care, custody or control, plus the c:ost of labor, materials, or services furnished or arranged by you on such property.

1he following items apply only to property not includecl in items ( I ) , (2) or (3), immediately above:

(a) If you are legally responsible by written contract for an amount that exceeds the actual cash value of property of others in your care, custody or control, valuation will be determined at the amount fixed by such written contract, but not at more than the replacement cost of the property as of the time of loss, without deduction for depreciation.

(b) Under the Property of Others Extension of Coverage, the value of covered property will be determined in accordance with paragraph a. of this Valua- tion Condition.

(c) The value of property that you lease from others or rent from others, or that is loaned to you, will be determined in accordance with paragraph a, of this Valuation Condition.

\Ne wili not pay more for ioss in any one occurrence than the applicable limit of insurance.

All other policy provisions apply.

(CONTINU ED)

INCREASED COST AN13 DEMOLITION COVERAGE END43RSEMENT

1. In the event a building covered under- Cover- age A sustains an insured loss, we will pay for:

a. the increased cost to repair or rebuild the building caused by enforcement of a building, zoning ar land use ordinance or law if the enforcement is directly caused by the same insured loss and the requirement is in effect at the time the insured loss occurs. If the building is repaired or rebuilt, it must be intlended for similar occuparlcy as the current building unless otherwise required by zoning or land use ordinance or law; and

b. the cost to demolish and clear the site of undamaged portions of the building caused by enforcement of a building, zoning or land use ordinance or law if the enforcement is directly caused by the same insured loss and the requirement is in effect at the time the insured loss occurs.

this period in writing during the two years.

3. To the extent of any coverage provided under this endorsement, the following item 1.a. is deleted from LOSSES NOT lNSURED under SECTION I LOSSES INSURED AND LfDSSES NOT INSURED:

a. the enforcement of any c~rdinance or law:

(1) regulating the construction, use or repair of any property; or

(2) requiring the tearing down of any property, including the cost of removing its debris;

4. We will- not pay more for the increased cost to repair or rebuild the building at the same or another premises in the same general vicinity if relocation is required by ordinance or law, and the cost to demolish and clear the site of undamaged parts of the building caused by enforcement of building, zoning or land use ordinance or law than the lesser

2. We will not pay for: of:

a. the costs associated with the enforcement of any ordinance or law which relquires #any insured or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants, mea.ning any solid, liquid, gaseous or thermal irritant or contaminant, including vapor, soot, fumes, acids, alkalis, chemicals and waste;

b. any loss of value of the undamaged portion of the building caused by enforcement of any ordinance or law; or

c. any increased cost of construction under this endorsement:

(1) until the covered building is actually repaired or replaced at the same or a,nother premises in the same general vicinity; and

(:I) unless the repairs or replacement are made as soon as reasonably possible after the loss, not to exceed two years. We may extend

a, the amount you actually spend to dlemolish and clear the site of the undarnaged portion of the building plus the ir~creased cost to repair or rebuild the building but not for rnare than a building of the same height, floor area and style on the same premises as the covered building; or

b. 10% of the Coverage A limit of insurance on the building at the time of loss.

This coverage does not increase the limit of insurance applicable to the building.

The terms of this endorsement apply separately to each building to which the policy applies. However, if more than one building is insured under a single Coverage A limit of insurance shown in the Declarations, the most we will pay in any one occurrence, regardless of the number of buildings involved, is 10% of that single limit of Insur- ance.

All other policy provisions apply

(CQNTINIJ ED)

F E-6357.1 (1 2!89)

GUARANTEED REPLAC:EMENT COST COVERAGE ENDORSEMENT

The following is added to SECTION I PROPERTY COVERAGES:

GUARANTEE3 REPLACEMENT COST COVEIRAGE

We will settle covered losses to the buildings on the described premises under Coverage A - Build- ings, at replac.ement cost without regard to the limit of insurance, subject to the valuation provisions in SECTION 1 CONDITIONS.

Guaranteed Replacement Cost Coverage does not apply to the following property under Cover- age A:

1. swirnrnirlg pools and their related equipment, fences, retaining walls and other appurtenant structurets that are not buildings;

2. personal property that is used to maintain or service the buildings or the premises, including:

a. fire extinguishing equipment;

b. outdoor furniture or fixtures;

c. floor coverings; and

d. appliance:: used for rei?igeral:ing, ventilating, cooking, dishwashing or launder- I rig;

3. materiabs, equipment, supplies and temporary structures, on or within 100 feet of the described premises, used for making additions, alterations or repairs to the buildings or structures i f not covered by other insurance.

Report Increased Values.

You must notify us within 90 days of' the start of any additions to or remodeling of the buildings which increases the value of any one building by $10,000 or more and pay any additional premium due for the increase in value. I f you fail to notify us '

within 90 days, our payment will not exceed the limit of insurance applying to the damaged buildings. See SECTION 1 CONDITIONS, Valuation for additional prcwisions.

For purposes of this endorsement, the following provisions do no't apply:

1. SECTION \CONDITIONS, 2. Valuation, item a.(3)(a)l; a n d

2. !SECTION I EXTENSIONS OF COVERAGE, item 12. Rlewly Acquired Buildings and Business Personal Property.

All other prcwisions of the policy apply.

(CONTINU ED)

PGLICY ENDORSEMENT (Condom inium/Association)

SECTION I CONDITIONS

In all policies, under CONDITIONS, item i 0. Unit-Owner Mortgagee is deleted.

All other policy provisions apply

TREE DEBRIS REMOVAL ENBQRSEMlfNT

The following is added to SIXTION I EXTENSIONS OIF COVERAGE:

Tree Debris Removal. We will pay your expense to remove the debris of any broken or fallen tree if Coverage A property is damaged by the tree. TIE most we will pay in any one occurrence at each location under this Extension of Coverage is $500 as an additional amount of insurance.


F E-6538.1 (1 0195)

GLASS DEDUCTIBLE DELETION ENDOR!XMElJT

Under SECTION I DEB)UCTIBLES, the special $1 00 deductible amount applic;able to all glass losses is deleted and replaced by the Section I deductible otherwise included and shown in the Declarations of this policy.


Documents

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