RPS, INC. B&M PROGRAM...Extended Period of Restoration 365 Days Newly Acquired Locations 365 Days Business Income Coinsurance Waived Until 07/01/2019 Notice of Cancel. other than non-payment

The Hartford Steam BoilerInspection and Insurance Company

TEC RENEWAL 11/2015 Page 1 of 2

RPS, INC. B&M PROGRAMCommon Policy Renewal Declarations

Presented by: Risk Placement Svcs (Florida)

To report a claim - Call 1-888-HSB-LOSS (472-5677); Fax 1-888-329-5677.For questions and information about your policy – Call 1-800-472-1866.

Issue Date.......... 07/25/2018

Policy Number FBP2253273...........................

Named Insured:Montana Association of Counties Property & Casualty Trust

Mailing Address 2715 Skyway Dr.........................Helena, MT 59602

Policy Period 07/01/2018 to 07/01/2019 at 12:01 A.M...............................Standard Time at the above Mailing Address

Annual Premium $117,269.00.................................................................

Notices: Your policy may contain a Notice to Policyholders. State-specific notices arecontained in the applicable `State Changes' documents, attached at the end ofyour policy. Other notices may appear at the beginning of your policy.

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RPSCHP/SC/2018.08.03

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To Report a Loss • Dial toll-free #1 (844)777-8323 or visit our • Website: https://my.rpsins.com/claimsfnol • Contact Insurer directly (see policy section)

Common Policy Renewal DeclarationsNamed Insured:Montana Association of Counties Property & Casualty Trust

Policy Number FBP2253273...............

Effective Date 07/01/2018................Issue Date 07/25/2018.......................

TEC RENEWAL 11/2015 Page 2 of 2

This policy is made up of these Declarations and the following forms:

Description Form No.

Equipment Breakdown Coverage Part Declarations No. 1 TEC EBCDEC 07/2015Equipment Breakdown Coverage Part Declarations No. 2 TEC EBCDEC 07/2015Agreement and Conditions 6670 07/2015HSB TechAdvantageTM Equipment Breakdown Coverage Form TEC150 07/2015Deductibles Endorsement EFB DEDUCT 07/2015Deductibles Endorsement EFB DEDUCT 07/2015Omnibus Location Description EFB OMNIBUS3 10/2002Special Endorsement END SPECIAL 09/2005Terrorism Risk Insurance Act Disclosure END EBTRIA 01/2015Montana Changes FBP MT 09/2014

Equipment Breakdown Coverage Part Declarations No. 1Named Insured:Montana Association of Counties Property & Casualty Trust



TEC EBCDEC 07/2015 Page 1 of 2

These coverages apply to any location listed on the Schedule of Locations for Equipment BreakdownCoverage Part Declarations No. 1.

Covered Cause of Loss

Accident………………………………………… IncludedElectronic Circuitry Impairment………………... Included

The Covered Cause of Loss for this Equipment Breakdown Coverage always includes “accident.”If indicated as Included above, the Covered Cause of Loss for this Equipment Breakdown Coverage alsoincludes “electronic circuitry impairment.”

Coverages Limits

Equipment Breakdown Limit............................................. $100,000,000

Property Damage........................................................... IncludedBusiness Income............................................................ IncludedExtra Expense................................................................ Included

Civil Authority……........................................................ IncludedContingent Business Income......................................... $2,500,000Data Restoration............................................................ $2,500,000Demolition..................................................................... $2,500,000Expediting Expense...................................................... IncludedGreen……...................................................................... $25,000Hazardous Substances................................................... $2,500,000Mold.……...................................................................... $25,000Newly Acquired Locations............................................ IncludedOff Premise Equipment Breakdown............................... $2,500,000Ordinance or Law.......................................................... $2,500,000Perishable Goods........................................................... IncludedPublic Relations…......................................................... $5,000Service Interruption....................................................... Included





Deductibles

Combined........................................................................... $50,000.00

Other Conditions

Interruption of Service Waiting Period: 4 HoursExtended Period of Restoration 365 DaysNewly Acquired Locations 365 DaysBusiness Income Coinsurance Waived Until 07/01/2019Notice of Cancel. other than non-payment 90 DaysOmnibus Location Wording - See EndorsementSee Special Endorsement Attached.Deductible Exceptions - See Endorsement.The words 'on the same site' are deleted from Valuationa.(2).Miscellaneous Unnamed Locations Limit (Applies tolocations you own or lease that are not listed on theSchedule of Locations.)

$1,000,000

Covered Services as defined under "interruption ofservice" includes "cloud computing service".





These coverages apply to any location listed on the Schedule of Locations for Equipment BreakdownCoverage Part Declarations No. 2.

Covered Cause of Loss

Accident………………………………………… IncludedElectronic Circuitry Impairment………………... Included

The Covered Cause of Loss for this Equipment Breakdown Coverage always includes “accident.”If indicated as Included above, the Covered Cause of Loss for this Equipment Breakdown Coverage alsoincludes “electronic circuitry impairment.”

Coverages Limits

Equipment Breakdown Limit............................................. $1,000,000

Property Damage........................................................... IncludedBusiness Income............................................................ ExcludedExtra Expense................................................................ Excluded

Civil Authority……........................................................ ExcludedContingent Business Income......................................... ExcludedData Restoration............................................................ ExcludedDemolition..................................................................... $1,000,000Expediting Expense...................................................... ExcludedGreen……...................................................................... $25,000Hazardous Substances................................................... $100,000Mold.……...................................................................... $25,000Newly Acquired Locations............................................ $1,000,000Off Premise Equipment Breakdown................................ ExcludedOrdinance or Law.......................................................... $1,000,000Perishable Goods........................................................... ExcludedPublic Relations……....................................................... ExcludedService Interruption....................................................... Excluded





Deductibles

Direct.................................................................................. $50,000.00

Other Conditions

Newly Acquired Locations 90 DaysBusiness Income Coinsurance Waived Until 07/01/2019Notice of Cancel. other than non-payment 90 DaysSee Special Endorsement Attached.Exclusions B.2.g. and B.2.h. are deleted.Covered Services as defined under "interruption ofservice" includes "cloud computing service".Deductible Exceptions - See Endorsement.


6670 07/2015 Page 1 of 4©2015, The Hartford Steam Boiler Inspection and Insurance Company

Includes copyrighted material of Insurance Services Office, Inc., with its permission

Agreement and Conditions


One State StreetHartford, Connecticut 06102-5024

Claims Telephone Number: 1-888-472-5677Claims Fax Number: 1-888-329-5677Claims Email: [email protected]

Inspection Service Telephone Number: 1-800-333-4677Inspection Service Email: [email protected]

Insuring Agreement

In return for payment of the premium and subject to all terms of the policy, we agree with you to providethe insurance as stated in this policy.

In Witness Whereof, the Company identified on the Declarations has caused this policy to be signed by itsPresident and Corporate Secretary at Hartford, Connecticut.

Greg BaratsPresident and Chief Executive Officer

Nancy C. OnkenCorporate Secretary



General Conditions

I. COMMON POLICY CONDITIONS

A. CANCELLATION

1. The first Named Insured shown in theDeclarations may cancel this policy bymailing or delivering to us advance writtennotice of cancellation.

2. We may cancel this policy by mailing ordelivering to the first Named Insuredwritten notice of cancellation at least:

a. 10 days before the effective date ofcancellation if we cancel fornonpayment of premium; or

b. 30 days before the effective date ofcancellation if we cancel for any otherreason.

3. We will mail or deliver our notice to the firstNamed Insured's last mailing address knownto us.

4. Notice of cancellation will state the effectivedate of cancellation. The policy period willend on that date.

5. If this policy is canceled, we will send the firstNamed Insured any premium refund due. If wecancel, the refund will be pro rata. If the firstNamed Insured cancels, the refund may be lessthan pro rata. The cancellation will beeffective even if we have not made or offereda refund.

6. If notice is mailed, proof of mailing will besufficient proof of notice.

B. CHANGES

This policy contains all the agreements betweenyou and us concerning the insurance afforded. Thefirst Named Insured shown in the Declarations isauthorized to make changes in the terms of thispolicy with our consent. This policy's terms can beamended or waived only by endorsement issued byus and made a part of this policy.

C. EXAMINATION OF YOUR BOOKS ANDRECORDS

We may examine and audit your books andrecords as they relate to this policy at any timeduring the policy period and up to three yearsafterward.

D. INSPECTIONS AND SURVEYS

1. We have the right to:a. Make inspections and surveys at any

time;

b. Give you reports on the conditions wefind; and

c. Recommend changes.

2. We are not obligated to make anyinspections, surveys, reports orrecommendations and any such actionsrelate only to insurability and the premiumsto be charged. We do not make safetyinspections. We do not undertake to performthe duty of any person or organization toprovide for the health or safety of workers orthe public. And we do not warrant thatconditions:

a. Are safe or healthful; or

b. Comply with laws, regulations, codesor standards.

3. Paragraphs 1. and 2. of this condition applynot only to us, but also to any rating,advisory, rate service or similar organizationwhich makes insurance inspections, surveys,reports or recommendations.

E. PREMIUMS

The first Named Insured shown in theDeclarations:

1. Is responsible for the payment of allpremiums; and

2. Will be the payee for any return premiumswe pay.

F. TRANSFER OF YOUR RIGHTS ANDDUTIES UNDER THIS POLICY

Your rights and duties under this policy may notbe transferred without our written consent exceptin the case of death of an individual NamedInsured.

If you die, your rights and duties will betransferred to your legal representative but onlywhile acting within the scope of duties as yourlegal representative. Until your legalrepresentative is appointed, anyone havingproper temporary custody of your property willhave your rights and duties but only with respectto that property.

II. CALCULATION OF PREMIUMThe premium shown in the Declarations was computedbased on rates in effect at the time the policy wasissued. On each renewal, continuation, or anniversaryof the effective date of this policy, we will compute thepremium in accordance with our rates and rules then ineffect.



III. REPORT OF VALUESYou must report insurable values to us at least once ayear.

IV. ADJUSTMENT OF PREMIUMA. The premium charged at the inception of each

policy year is an advance premium. When wereceive updated insurable values from you orwhen we determine updated insurable valuesthrough an audit or claim adjustment, we willdetermine an adjusted premium for thisinsurance.

B. If the adjusted premium is less than the advancepremium, we will return the excess premium toyou. Such excess premium will not exceed 75% ofthe advance premium.

C. If the adjusted premium is greater than theadvance premium, we will charge the additionalpremium based on your reports of value.

V. JOINT OR DISPUTED LOSS AGREEMENTA. This condition is intended to facilitate payment of

insurance proceeds when:

1. Both a commercial property policy and thisequipment breakdown policy are in effect;

2. Damage occurs to Covered Property that isinsured by the commercial property policyand this equipment breakdown policy; and

3. There is disagreement between the insurers asto whether there is coverage or as to theamount of the loss to be paid, if any, by eachinsurer under its own policies.

B. The provisions of this condition apply only if all ofthe following requirements are met:

1. The commercial property policy carried by theNamed Insured, insuring the CoveredProperty, contains a similar provision at thetime of the loss or damage, with substantiallythe same requirements, procedures andconditions as contained in this condition;

2. There is a Joint Loss or Disputed Loss asdefined below; and

3. The total amount of the loss is agreed to byyou, the commercial property insurer(s) andus.

C. Joint Loss and Disputed Loss are defined asfollows:

1. Joint Loss means that there is damage to

property that is Covered Property underboth the commercial property policy andthis policy and both the commercialproperty insurer(s) and we admit to someliability for payment under the respectivepolicies.

2. Disputed Loss means that there is damage toproperty that is Covered Property under boththe commercial property policy and thispolicy and the commercial propertyinsurer(s) and we agree that there is someliability under one policy or the other, butdisagree about which policy is liable for theloss.

D. If the requirements listed in paragraph B. aboveare satisfied, we and the commercial propertyinsurer(s) will make payments to the extent, andin the manner, described as follows:

1. We will pay, after your written request, theentire amount of loss that we have agreed asbeing covered, if any, by this equipmentbreakdown policy and one-half (1/2) theamount of the loss that is in disagreement.

2. The commercial property insurer(s) willpay, after your written request, the entireamount of loss that they have agreed asbeing covered, if any, by the commercialproperty policy and one-half (1/2) theamount of loss that is in disagreement.

3. Payments by the insurers of the amountsthat are in disagreement, as described inparagraphs 1. and 2., do not alter, waive orsurrender any rights of any insurer againstany other with regard to the portion of theloss for which each insurer is liable.

4. The amount in disagreement to be paid byus under this condition shall not exceed theamount payable under the equivalent lossagreement(s) of the commercial propertypolicy.

5. The amount to be paid under this conditionshall not exceed the amount we would havepaid had no commercial property policy beenin effect at the time of loss. In no event willwe pay more than the applicable EquipmentBreakdown Limit shown in the Declarations.

6. Acceptance by you of sums paid under thiscondition does not alter, waive or surrenderany other rights against us.



E. Arbitration

1. The commercial property insurer(s) and weagree to submit our differences to arbitrationwithin 90 days after payment of the lossunder the terms of this condition.

2. You agree to cooperate with anyarbitration procedures.

3. There will be three arbitrators: one will beappointed by us, and another will beappointed by the commercial propertyinsurer(s). The two arbitrators will select athird arbitrator. If they cannot agree, eithermay request that selection be made by ajudge of a court having jurisdiction. Adecision agreed to by two of the threearbitrators will be binding on both parties.Judgment on any award can be entered in anycourt that has jurisdiction.

F. Final Settlement Between Insurers

The insurer(s) found responsible for the greaterpercentage of the ultimate loss must return theexcess contribution to the other insurer(s). Inaddition, the insurer(s) found responsible forthe greater portion of the loss must payliquidated damages to the other insurer(s) on theamount of the excess contribution of the otherinsurer(s). Liquidated damages are defined asinterest from the date the insured invokes thisagreement to the date the insurer(s) thatcontributed the excess amount is reimbursed.The interest is calculated at 1.5 times the highestprime rate from the money rates column of theWall Street Journal during the period of theliquidated damages. Arbitration expenses are nota part of the excess contribution for whichliquidated damages are calculated. Arbitrationexpenses will be apportioned between insurerson the same basis that the ultimate loss isapportioned.

HSB TechAdvantageTM

Equipment Breakdown Coverage FormVarious provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties, and what is andis not covered.

Throughout this policy, the words “you” and “your” refer to the Named Insured shown in the Declarations. The words “we,”“us” and “our” refer to the Company providing this Insurance. Other words and phrases that appear in quotation marks havespecial meaning. Refer to Section G - DEFINITIONS. Examples are shown for illustrative purposes only and do not representpredicted or expected outcomes.

TEC150 07/2015 Page 1 of 21© 2015, The Hartford Steam Boiler Inspection and Insurance Company

Includes copyright material of Insurance Services Office, Inc. with its permission.

A. COVERAGE

This Equipment Breakdown Coverage providesinsurance for a Covered Cause of Loss as defined inA.1. below. In the event of a Covered Cause of Loss,we will pay for loss as described in A.2. below.

1. Covered Cause of Loss

a. “Accident” and “Electronic CircuitryImpairment”

The following applies when ElectronicCircuitry Impairment is shown as Includedin the Declarations:

The Covered Cause of Loss for thisEquipment Breakdown Coverage is an“accident” or “electronic circuitryimpairment.” Without an “accident” or“electronic circuitry impairment” there isno Equipment Breakdown Coverage.

b. “Accident” Only

The following applies when ElectronicCircuitry Impairment is shown as NotIncluded in the Declarations:

The Covered Cause of Loss for thisEquipment Breakdown Coverage is an“accident.” Without an “accident,” there isno Equipment Breakdown Coverage.

2. Coverages Provided

This section lists the coverages that may applyin the event of a Covered Cause of Loss. Eachcoverage is subject to a specific limit as shownin the Declarations. See paragraph C.2. fordetails.

These coverages apply only to the direct resultof a Covered Cause of Loss. For each coverage,we will pay only for that portion of the loss,damage or expense that is solely attributable tothe Covered Cause of Loss.

a. Property Damage

We will pay for physical damage to“covered property” that is at a location

indicated in the Declarations at the time ofthe Covered Cause of Loss. WhenElectronic Circuitry Impairment is shownas Included in the Declarations, we willconsider “electronic circuitry impairment”to be physical damage to “coveredequipment.”

b. Business Income

(1) We will pay your actual loss of“business income” during the“period of restoration” that resultsdirectly from the necessary total orpartial interruption of your business.

(2) We will also pay any necessaryexpenses you incur during the“period of restoration” to reduce theamount of loss under this coverage.We will pay for such expenses to theextent that they do not exceed theamount of loss that otherwise wouldhave been payable under thiscoverage.

(3) We will consider the actualexperience of your business beforethe Covered Cause of Loss and theprobable experience you would havehad without the Covered Cause ofLoss in determining the amount ofour payment.

c. Extra Expense

We will pay the reasonable and necessary“extra expense” to operate your businessduring the “period of restoration.”

d. Civil Authority

We will pay for your loss and expense asdefined under Business Income and ExtraExpense coverages that results from a civilauthority prohibiting access to a locationindicated in the Declarations due solely to aCovered Cause of Loss that causes damageto property within one mile of such



location, provided that such action is takenin response to dangerous physicalconditions resulting from the CoveredCause of Loss, or to enable a civil authorityto have unimpeded access to the damagedproperty.

e. Contingent Business Income

We will pay for your loss and expense asdefined under Business Income and ExtraExpense coverages that results from:

(1) An “interruption of supply”; or

(2) An “accident” at an “anchorlocation” that has been open forbusiness for at least six months priorto the “accident” and is locatedwithin one mile of your scheduledlocation.

f. Course of Construction

This coverage is automatically included anddoes not need to be indicated in theDeclarations.

(1) You will notify us promptly of anyexpansion or rehabilitation of anylocation indicated in theDeclarations.

(2) All coverages applicable to anylocation indicated in theDeclarations are extended to anexpansion or rehabilitation of thatlocation.

(3) This coverage begins at the time youbegin the expansion or rehabilitationproject.

(4) We will charge you additionalpremium for newly acquiredequipment from the date theequipment is installed.

g. Data Restoration

(1) We will pay for your reasonable andnecessary cost to research, replaceor restore lost “data.”

(2) We will pay for your reasonable andnecessary cost to research, replaceor restore “data” that is lost as theresult of an “interruption of service.”

(3) Coverage under g.(2) above appliesto “data” stored in “coveredequipment.”

(4) If “cloud computing services” isindicated in the Declarations as aCovered Service, coverage under

g.(2) above also applies to “data”stored in the equipment of a “cloudcomputing services” provider withwhom you have a contract.

(5) We will also pay for your loss andexpense as defined under BusinessIncome coverage and Extra Expensecoverage that is the result of g.(1)and g.(2) above, if such coverage isotherwise applicable under thispolicy. This coverage is includedwithin and subject to your DataRestoration limit.

h. Demolition

(1) This coverage applies if a CoveredCause of Loss damages a buildingthat is “covered property” and theloss is increased by an ordinance orlaw that:

(a) Requires the demolition of abuilding that is otherwisereparable;

(b) Is in force at the time of theCovered Cause of Loss; and

(c) Is not addressed underHazardous Substances coverageor Mold coverage.

(2) We will pay for the followingadditional costs to comply with suchordinance or law:

(a) Your actual and necessary costto demolish and clear the site ofthe undamaged parts of thebuilding; and

(b) Your actual and necessary costto reconstruct the undamagedparts of the building.

(3) As used in this coverage, additionalcosts mean those beyond whatwould have been payable under thisEquipment Breakdown Coveragehad no such ordinance or law beenin force at the time of the CoveredCause of Loss.

(4) We will also pay for your loss andexpense as defined under BusinessIncome coverage and Extra Expensecoverage that is the result of h.(1)above, if such coverage is otherwiseapplicable under this policy. Thiscoverage is included within andsubject to your Demolition limit.



i. Expediting Expenses

With respect to your damaged “coveredproperty,” we will pay the reasonable extracost to:

(1) Make temporary repairs; and

(2) Expedite permanent repairs orpermanent replacement.

j. Green

(1) With respect to “covered property,”we will pay for additional costs youincur:

(a) To repair damaged propertyusing equipment, materials andservice firms required orrecommended by a RecognizedEnvironmental StandardsProgram, if repair is the leastexpensive option as describedin Section E. LOSSCONDITIONS, 10. Valuation,paragraph a.;

(b) To replace damaged propertyusing equipment, materials andservice firms required orrecommended by a RecognizedEnvironmental StandardsProgram, if replacement is theleast expensive option asdescribed in Section E. LOSSCONDITIONS, 10. Valuation,paragraph a.;

(c) To dispose of damagedproperty or equipment, ifpracticable, through a recyclingprocess; and

(d) To flush out reconstructedspace with up to 100% outsideair using new filtration media.

As used in this coverage, additionalcosts mean those beyond whatwould have been payable under thisEquipment Breakdown Coverage inthe absence of this Green coverage.

(2) With respect to any building that is“covered property” which, at thetime of the Covered Cause of Losswas certified by a RecognizedEnvironmental Standards Program,we will pay for costs you incur:

(a) To prevent a lapse of suchcertification;

(b) To reinstate the certification or

replace it with an equivalentcertification;

(c) For an engineer authorized by aRecognized EnvironmentalStandards Program to overseethe repair or replacement of thedamaged “covered property”;and

(d) For a Professional Engineer tocommission or recommissionyour damaged mechanical,electrical, or electronic buildingsystems.

(3) We will also pay for your loss andexpense as defined under BusinessIncome coverage and Extra Expensecoverage that is the result of j.(1)and (2) above, if such coverage isotherwise applicable under thispolicy. This coverage is includedwithin and subject to your Greenlimit.

(4) This Green coverage is subject tothe following provisions:

(a) This coverage applies inaddition to any coverage thatmay apply under Section E.LOSS CONDITIONS, 10.Valuation, paragraph d.Environmental, Safety andEfficiency Improvements, orany other applicable coverage.

(b) This coverage only applies to“covered property” that must berepaired or replaced as a directresult of a Covered Cause ofLoss.

(c) This coverage does not apply toany property or equipment thatis valued on an Actual CashValue basis under this policy.

(5) As used in this Green coverage,Recognized EnvironmentalStandards Program means one of thefollowing:

(a) The United StatesEnvironmental ProtectionAgency ENERGY STAR®program;

(b) The U.S. Green BuildingCouncil LEED® program;

(c) The Green Building Initiative



GREEN GLOBES® program;or

(d) Any nationally orinternationally recognizedenvironmental standardsprogram that is designed toachieve energy savings andrelated objectives of the typeincluded in the programs listedabove.

k. Hazardous Substances

(1) We will pay for the additional costto repair or replace “coveredproperty” because of contaminationby a “hazardous substance.” Thisincludes the additional expenses toclean up or dispose of such property.This does not include contaminationof “perishable goods” by refrigerant,including but not limited toammonia, which is addressed inPerishable Goods, A.2.p.(3).

(2) As used in this coverage, additionalcosts mean those beyond whatwould have been payable under thisEquipment Breakdown Coveragehad no “hazardous substance” beeninvolved.

(3) We will also pay for your loss andexpense as defined under BusinessIncome coverage and Extra Expensecoverage that is the result of k.(1)above, if such coverage is otherwiseapplicable under this policy. Thiscoverage is included within andsubject to your HazardousSubstances limit.

l. Mold

(1) We will pay for the additional costto repair or replace “coveredproperty” because of contaminationby mold, fungus, mildew or yeast,including any spores or toxinscreated or produced by or emanatingfrom such mold, fungus, mildew oryeast, resulting from a CoveredCause of Loss. This includes theadditional costs to clean up ordispose of such property. This doesnot include “spoilage” of personalproperty that is “perishable goods”to the extent that such “spoilage” iscovered under Perishable Goodscoverage.

(2) As used in this Mold coverage,additional costs mean those beyondwhat would have been payable underthis Equipment BreakdownCoverage had no mold, fungus,mildew, yeast, spores or toxins beeninvolved.

(3) We will also pay for your loss andexpense as defined under BusinessIncome coverage and Extra Expensecoverage that is the result of l.(1)above, if such coverage is otherwiseapplicable under this policy. Thiscoverage is included within andsubject to your Mold limit.

(4) We will also pay the cost of testingperformed after repair orreplacement of the damaged“covered property” is completedonly to the extent that there is reasonto believe there is the presence ofmold, fungus, mildew, yeast, sporesor toxins.

m. Newly Acquired Locations

(1) You will notify us promptly of anynewly acquired location that youhave purchased or leased during thePolicy Period.

(2) All coverages applicable to anyscheduled location under thisEquipment Breakdown Coverage areextended to a newly acquiredlocation that you have purchased orleased during the Policy Period.

(3) This coverage begins at the time youacquire the property. As respectsnewly constructed properties, wewill only consider them to beacquired by you when you have fullyaccepted the completed project.

(4) This coverage ends when any of thefollowing first occurs:

(a) This Policy expires;

(b) The number of days specified inthe Declarations for thiscoverage expires after youacquire the location;

(c) The location is incorporated intothe regular coverage of thispolicy; or

(d) The location is incorporated intothe regular coverage of another



Equipment Breakdown policyyou have.

(5) If limits or deductibles vary bylocation, the highest limits anddeductibles will apply to newlyacquired locations. However, themost we will pay for loss, damage orexpense arising from any “oneequipment breakdown” is theamount shown as the NewlyAcquired Locations limit in theDeclarations.

(6) We will charge you additionalpremium for newly acquiredlocations from the date you acquirethe property.

n. Off Premises Equipment Breakdown

(1) We will pay for physical damage totransportable “covered equipment”that, at the time of the CoveredCause of Loss, is not at a locationindicated in the Declarations.

(2) We will also pay for your loss andexpense as defined under BusinessIncome coverage and Extra Expensecoverage that is the result of n.(1)above, if such coverage is otherwiseapplicable under this policy. Thiscoverage is included within andsubject to your Off PremisesEquipment Breakdown limit.

(3) We will also pay for your loss andexpense as defined under DataRestoration coverage that is theresult of n.(1) above, if suchcoverage is otherwise applicableunder this policy. This coverage isincluded within and subject to yourOff Premises Equipment Breakdownlimit.

o. Ordinance or Law

(1) This coverage applies if a CoveredCause of Loss damages a buildingthat is “covered property” and theloss is increased by an ordinance orlaw that:

(a) Regulates the construction orrepair of buildings, including“building utilities”;

(b) Is in force at the time of theCovered Cause of Loss; and

(c) Is not addressed under

Demolition coverage,Hazardous Substancescoverage, or Mold coverage.

(2) We will pay for the followingadditional costs to comply with suchordinance or law:

(a) Your actual and necessary costto repair the damaged portionsof the building;

(b) Your actual and necessary costto reconstruct the damagedportions of the building; and

(c) Your actual and necessary costto bring undamaged portions ofthe building into compliancewith the ordinance or law.

(3) As used in this coverage, additionalcosts mean those beyond whatwould have been payable under thisEquipment Breakdown Coveragehad no such ordinance or law beenin force at the time of the CoveredCause of Loss.

(4) We will also pay for your loss andexpense as defined under BusinessIncome coverage and Extra Expensecoverage that is the result of o.(1)above, if such coverage is otherwiseapplicable under this policy. Thiscoverage is included within andsubject to your Ordinance or Lawlimit.

p. Perishable Goods

(1) We will pay for physical damage to“perishable goods” due to“spoilage.”

(2) We will also pay for physicaldamage to “perishable goods” due to“spoilage” that is the result of an“interruption of service.”

(3) We will also pay for physicaldamage to “perishable goods” due tocontamination from the release ofrefrigerant, including but not limitedto ammonia.

(4) We will also pay any necessaryexpenses you incur during the“period of restoration” to reduce theamount of loss under this coverage.We will pay for such expenses to theextent that they do not exceed theamount of loss that otherwise would



have been payable under thisPerishable Goods coverage.

q. Public Relations

(1) This coverage only applies if youhave sustained an actual loss of“business income” covered underthis policy.

(2) We will pay for your reasonablecosts for professional services tocreate and disseminatecommunications, when the need forsuch communications arises directlyfrom the interruption of yourbusiness. This communication mustbe directed to one or more of thefollowing:

(a) The media;

(b) The public; or

(c) Your customers, clients ormembers.

(3) Such costs must be incurred duringthe “period of restoration” or up to30 days after the “period ofrestoration” has ended.

r. Service Interruption

We will pay for your loss and expense asdefined under Business Income coverageand Extra Expense coverage that is theresult of an “interruption of service.”

B. EXCLUSIONS

We will not pay for any excluded loss, damage orexpense, even though any other cause or eventcontributes concurrently or in any sequence to theloss, damage or expense.

1. We will not pay for loss, damage or expensecaused directly or indirectly by any of thefollowing, whether or not caused by or resultingfrom a Covered Cause of Loss.

a. Fire and Explosion

(1) Fire, including smoke from a fire.

(2) Combustion explosion. This includes,but is not limited to, a combustionexplosion of any steam boiler orother fired vessel.

(3) Any other explosion, except asspecifically provided in the definitionof “accident.”

b. Ordinance or Law

The enforcement of, or change in, anyordinance, law, regulation, rule or ruling

regulating or restricting repair,replacement, alteration, use, operation,construction or installation, except asspecifically provided in A.2.h., k., l. and o.(Demolition, Hazardous Substances, Moldand Ordinance or Law coverages).

c. Earth Movement

Earth movement, whether natural orhuman-made, including but not limited toearthquake, shock, tremor, subsidence,landslide, rock fall, earth sinking, sinkholecollapse or tsunami.

d. Nuclear Hazard

Nuclear reaction, detonation or radiation,or radioactive contamination, howevercaused.

e. War and Military Action

(1) War, including undeclared or civilwar;

(2) Warlike action by a military force,including action in hindering ordefending against an actual orexpected attack, by any government,sovereign or other authority usingmilitary personnel or other agents; or

(3) Insurrection, rebellion, revolution,usurped power, political violence oraction taken by governmentalauthority in hindering or defendingagainst any of these.

f. Water

(1) Flood, surface water, waves, tides,tidal waves, overflow of any body ofwater, or their spray, all whetherdriven by wind or not;

(2) Mudslide or mudflow; or

(3) Water that backs up or overflowsfrom a sewer, drain or sump.

However, if electrical “covered equipment”requires drying out because of the above,we will pay for the amount you actuallyexpend to dry out such equipment, subjectto the applicable Property Damage limitand Direct Coverage deductible. We willnot pay more than the Actual Cash Value ofthe affected electrical “covered equipment.”We will not pay to replace such equipmentor for any other loss, damage or expense.

g. Failure to Protect Property

Your failure to use all reasonable means toprotect “covered property” from damage



following a Covered Cause of Loss.

h. Fines

Fine, penalty or punitive damage.

i. Mold

Mold, fungus, mildew or yeast, includingany spores or toxins created or produced byor emanating from such mold, fungus,mildew or yeast. This includes, but is notlimited to, costs arising from clean-up,remediation, containment, removal orabatement of such mold, fungus, mildew,yeast, spores or toxins, except asspecifically covered under Mold coverage.However, this exclusion does not apply to“spoilage” of personal property that is“perishable goods” to the extent that such“spoilage” is covered under PerishableGoods coverage.

j. Vandalism

Vandalism, meaning a willful andmalicious act that causes damage ordestruction.

2. We will not pay for a Covered Cause of Losscaused by or resulting from any of the followingcauses of loss:

a. Lightning.

b. Windstorm or Hail. However, thisexclusion does not apply when:

(1) “Covered equipment” located withina building or structure suffers aCovered Cause of Loss that resultsfrom wind-blown rain, snow, sand ordust; and

(2) The building or structure did not firstsustain wind or hail damage to itsroof or walls through which the rain,snow, sand or dust entered.

c. Collision or any physical contact caused bya “vehicle.” This includes damage byobjects falling from aircraft. However, thisexclusion does not apply to any unlicensed“vehicles” which you own or which areoperated in the course of your business.

d. Riot or Civil Commotion.

e. Leakage or discharge of any substancefrom an automatic sprinkler system,including collapse of a tank that is part ofthe system.

f. Volcanic Action.

g. An electrical insulation breakdown test.

h. A hydrostatic, pneumatic or gas pressuretest.

i. Water or other means intended toextinguish a fire, even when such anattempt is unsuccessful.

j. Elevator collision.

3. We will not pay for a Covered Cause of Losscaused by or resulting from any of the followingperils, if such peril is a covered cause of lossunder another coverage part or policy ofinsurance you have, whether collectible or not,and without regard to whether or not the othercoverage part or policy of insurance providesthe same coverage or scope of coverage as thispolicy.

a. Falling Objects.

b. Weight of Snow, Ice or Sleet.

c. Water Damage, meaning discharge orleakage of water or steam as the directresult of the breaking apart or cracking ofany part of a system or appliancecontaining water or steam.

d. Collapse.

e. Breakage of Glass.

f. Freezing caused by cold weather.

g. Discharge of molten material fromequipment, including the heat from suchdischarged material.

4. Exclusions 2. and 3. do not apply if all of thefollowing are true:

a. The excluded peril occurs away from anylocation indicated in the Declarations andcauses an electrical surge or other electricaldisturbance;

b. Such surge or disturbance is transmittedthrough utility service transmission lines toan indicated location;

c. At the indicated location, the surge ordisturbance results in a Covered Cause ofLoss to “covered equipment” that is ownedor operated under the control of you oryour landlord; and

d. The loss, damage or expense caused bysuch surge or disturbance is not a coveredcause of loss under another coverage partor policy of insurance you have, whethercollectible or not, and without regard towhether or not the other coverage part orpolicy of insurance provides the samecoverage or scope of coverage as thispolicy.



5. With respect to Business Income, Extra Expenseand Service Interruption, we will also not payfor:

a. Loss associated with business that wouldnot or could not have been carried on if theCovered Cause of Loss had not occurred;

b. Loss caused by your failure to use duediligence and dispatch and all reasonablemeans to resume business;

c. That part of any loss that extends beyond oroccurs after the “period of restoration.”This includes, but is not limited to:

(1) “Business income” that would havebeen earned after the “period ofrestoration,” even if such loss is thedirect result of the suspension, lapseor cancellation of a contract duringthe “period of restoration”; and

(2) “Extra expense” to operate yourbusiness after the “period ofrestoration,” even if such loss iscontracted for and paid during the“period of restoration.”

d. Any increase in loss resulting from anagreement between you and your customeror supplier. This includes, but is not limitedto, contingent bonuses or penalties, latefees, demand charges, demurrage chargesand liquidated damages.

6. With respect to Civil Authority, ContingentBusiness Income, Off Premises EquipmentBreakdown, Service Interruption, paragraph (2)of Data Restoration and paragraph (2) ofPerishable Goods, we will also not pay for aCovered Cause of Loss caused by or resultingfrom any of the perils listed in Exclusion 3.above, whether or not such peril is a coveredcause of loss under another coverage part orpolicy of insurance you have.

7. With respect to Data Restoration coverage, wewill also not pay to reproduce:

a. Software programs or operating systemsthat are not commercially available; or

b. “Data” that is obsolete, unnecessary oruseless to you.

8. With respect to Demolition and Ordinance orLaw coverages, we will also not pay for:

a. Increased demolition or reconstructioncosts until they are actually incurred; or

b. Loss due to any ordinance or law that:

(1) You were required to comply with

before the loss, even if the buildingwas undamaged; and

(2) You failed to comply with;

whether or not you were aware of suchnon-compliance.

C. LIMITS OF INSURANCE

Any payment made under this Equipment BreakdownCoverage will not be increased if more than oneinsured is shown in the Declarations or if you arecomprised of more than one legal entity.

1. Equipment Breakdown Limit

The most we will pay for loss, damage orexpense arising from any “one equipmentbreakdown” is the amount shown as theEquipment Breakdown Limit in theDeclarations.

2. Coverage Limits

a. The limit of your insurance under each ofthe coverages listed in A.2. from loss,damage or expense arising from any “oneequipment breakdown” is the amountindicated for that coverage in theDeclarations. These limits are a part of, andnot in addition to, the EquipmentBreakdown Limit. If an amount of time isshown, coverage will continue for no morethan that amount of time immediatelyfollowing the Covered Cause of Loss. If acoverage is shown as “Included,” thatcoverage is provided up to the remainingamount of the Equipment BreakdownLimit. If no limit is shown in theDeclarations for a coverage, or if acoverage is shown as Excluded in theDeclarations, that coverage will beconsidered to have a limit of $0.

b. Loss arising from any “one equipmentbreakdown” may continue to be present orrecur in a later policy period. This includes,but is not limited to, loss arising frommold, fungus, mildew or yeast as coveredunder Mold coverage. In such a case, themost we will pay for all loss, damage orexpense arising out of any “one equipmentbreakdown” is the coverage limitapplicable at the time of the Covered Causeof Loss.

c. If two or more coverage limits apply to thesame loss or portion of a loss, we will payonly the smallest of the applicable limitsfor that loss or portion of the loss. Thismeans that if:



(1) You have a loss under one of thecoverages listed in A.2.; and

(2) All or part of the loss is not coveredbecause the applicable coverage isExcluded or has a limit that is lessthan the amount of your loss,

we will not pay the remaining amount ofsuch loss under any other coverage.

EXAMPLE 1

Property Damage Limit: $7,000,000

Business Income Limit: $1,000,000

Newly Acquired Locations Limit: $500,000

There is a Covered Cause of Loss at a newly acquiredlocation that results in a Property Damage loss of$200,000 and a Business Income loss of $800,000.

We will pay $500,000, because the entire loss issubject to the Newly Acquired Locations Limit of$500,000.

EXAMPLE 2

Property Damage Limit: $7,000,000

Business Income Limit: $500,000

Hazardous Substances Limit: $25,000

There is a Covered Cause of Loss that results in aloss of $100,000. If no “hazardous substance” hadbeen involved, the property damage loss would havebeen $10,000 and the business income loss wouldhave been $20,000. The presence of the “hazardoussubstance” increased the loss by $70,000 (increasingthe clean up and repair costs by $30,000 andincreasing the business income loss by $40,000).

We will pay $55,000 ($10,000 property damage plus$20,000 business income plus $25,000 hazardoussubstances).

D. DEDUCTIBLES

1. Deductibles for Each Coverage

a. Unless the Declarations indicate that yourdeductible is combined for all coverages,multiple deductibles may apply to any “oneequipment breakdown.”

b. We will not pay for loss, damage orexpense under any coverage until theamount of the covered loss or damageexceeds the deductible amount indicated forthat coverage in the Declarations. We willthen pay the amount of loss, damage orexpense in excess of the applicabledeductible amount, subject to the applicablelimit indicated in the Declarations.

c. If deductibles vary by type of “coveredequipment” and more than one type of

“covered equipment” is involved in any“one equipment breakdown,” only thehighest deductible for each coverage willapply.

d. The following applies when a deductible isexpressed as a function of the horsepowerrating of a refrigerating or air conditioningsystem. If more than one compressor is usedwith a single system, the horsepower ratingof the largest motor or compressor willdetermine the horsepower rating of thesystem.

2. Direct and Indirect Coverages

a. Direct Coverages Deductibles and IndirectCoverages Deductibles may be indicated inthe Declarations.

b. Unless more specifically indicated in theDeclarations:

(1) Indirect Coverages Deductiblesapply to Business Income and ExtraExpense loss, regardless of wheresuch coverage is provided in thisEquipment Breakdown Coverage;and

(2) Direct Coverages Deductibles applyto all remaining loss, damage orexpense covered by this EquipmentBreakdown Coverage.

EXAMPLE

A Covered Cause of Loss results in coveredlosses as follows:

$100,000 Total Loss (all applicablecoverages)

$ 35,000 Business Income Loss (including$2,000 of business income loss payableunder Data Restoration coverage)

$ 5,000 Extra Expense Loss

In this case, the Indirect coverages losstotals $40,000 before application of theIndirect Coverage Deductible. The Directcoverages loss totals the remaining $60,000before application of the Direct CoverageDeductible.

3. Application of Deductibles

a. Dollar Deductibles

We will not pay for loss, damage orexpense resulting from any “one equipmentbreakdown” until the amount of loss,damage or expense exceeds the applicabledeductible or deductibles shown in theDeclarations. We will then pay the amount



of loss, damage or expense in excess of theapplicable deductible or deductibles,subject to the applicable limits shown in theDeclarations.

b. Time Deductibles

If a time deductible is shown in theDeclarations, we will not be liable for anyloss occurring during the specified numberof hours or days immediately following theCovered Cause of Loss. If a timedeductible is expressed in days, each dayshall mean twenty-four consecutive hours.

c. Multiple of Average Daily Value (ADV)Deductibles

If a deductible is expressed as a numbertimes ADV, that amount will be calculatedas follows:

The ADV (Average Daily Value) will bethe “business income” that would havebeen earned during the period ofinterruption had no Covered Cause of Lossoccurred, divided by the number ofworking days in that period. The ADVapplies to the “business income” value ofthe entire location, whether or not the lossaffects the entire location. If more than onelocation is included in the valuation of theloss, the ADV will be the combined valueof all affected locations. For purposes ofthis calculation, the period of interruptionmay not extend beyond the “period ofrestoration.”

The number indicated in the Declarationswill be multiplied by the ADV asdetermined above. The result will be usedas the applicable deductible.

EXAMPLE

Business is interrupted, partially orcompletely, for 10 working days. If therehad been no Covered Cause of Loss, thetotal “business income” at the affectedlocation for those 10 working days wouldhave been $5,000. The Indirect CoveragesDeductible is 3 Times ADV.

$5,000 / 10 = $500 ADV

3 X $500 = $1,500 Indirect CoveragesDeductible

d. Percentage of Loss Deductibles

If a deductible is expressed as a percentageof loss, we will not be liable for theindicated percentage of the gross amount ofloss, damage or expense (prior to any

applicable deductible or coinsurance)insured under the applicable coverage. Ifthe dollar amount of such percentage is lessthan the indicated Minimum Deductible,the Minimum Deductible will be theapplicable deductible.

E. LOSS CONDITIONS

The following conditions apply in addition to theCommon Policy Conditions:

1. Abandonment

There can be no abandonment of any property tous.

2. Brands and Labels

a. If branded or labeled merchandise that is“covered property” is damaged by aCovered Cause of Loss, but retains asalvage value, you may:

(1) Stamp the word SALVAGE on themerchandise or its containers if thestamp will not physically damage themerchandise; or

(2) Remove the brands or labels, ifdoing so will not physically damagethe merchandise. You must re-labelthe merchandise or its containers tocomply with the law.

b. We will pay for any reduction in value ofthe salvage merchandise resulting fromeither of the two actions listed in 2.a.above, subject to all applicable limits.

c. We will also pay the reasonable andnecessary expenses you incur to performeither of the two actions described in 2.a.above. We will pay for such expenses tothe extent that they do not exceed theamount recoverable from salvage.

d. If a Brands and Labels Limit is shown onthe Declarations, we will not pay more thanthe indicated amount for coverage underthis Condition.

3. Coinsurance - Business Income Coverage

a. Unless otherwise shown in theDeclarations, Business Income coverage issubject to coinsurance. This means that wewill not pay the full amount of any“business income” loss if the “businessincome actual annual value” is greater thanthe “business income estimated annualvalue” at the affected location at the time ofthe Covered Cause of Loss. Instead, wewill determine the most we will pay usingthe following steps:



(1) Divide the “business incomeestimated annual value” by the“business income actual annualvalue” at the time of the CoveredCause of Loss;

(2) Multiply the total amount of thecovered loss of “business income”by the amount determined inparagraph (1) above;

(3) Subtract the applicable deductiblefrom the amount determined inparagraph (2) above;

The resulting amount, or the BusinessIncome Limit, whichever is less, is the mostwe will pay. For the remainder, you willeither have to rely on other insurance orabsorb the loss yourself.

b. Coinsurance applies separately to eachinsured location.

c. If you report a single “business incomeestimated annual value” for more than onelocation, without providing information onhow that amount should be distributedamong the locations, we will distribute theamount evenly among all applicablelocations.

EXAMPLE 1 (Underinsurance)

When:

The “business income actual annual value” atthe location of loss at the time of the CoveredCause of Loss is $200,000.

The “business income estimated annual value”shown in the Declarations for the location ofloss is $100,000.

The actual loss of “business income” resultingfrom the Covered Cause of Loss is $40,000.

The Business Income limit is $100,000.

The Business Income deductible is $5,000.

Step 1: $100,000 / $200,000 = .5

Step 2: $40,000 x .5 = $20,000

Step 3: $20,000 - $5,000 = $15,000

The total “business income” loss recovery, afterdeductible, would be $15,000. For theremainder, you will either have to rely on otherinsurance or absorb the loss yourself.

We will also charge you an additional premiumin recognition of the actual “business incomeannual value.”

EXAMPLE 2 (Adequate insurance)

When:

The “business income actual annual value” atthe location of loss at the time of the CoveredCause of Loss is $200,000.

The “business income estimated annual value”shown in the Declarations for the location ofloss is $200,000.

The actual loss of “business income” resultingfrom the Covered Cause of Loss is $40,000.

The Business Income limit is $100,000.

The Business Income deductible is $5,000.

Step 1: $200,000 / $200,000 = 1

Step 2: $40,000 x 1 = $40,000

Step 3: $40,000 - $5,000 = $35,000

The total “business income” loss recovery, afterdeductible, would be $35,000.

4. Coinsurance - Coverages other than BusinessIncome

Coverages other than Business Income may besubject to coinsurance if so indicated in theDeclarations. If a Coinsurance percentage isshown in the Declarations, the followingcondition applies.

a. We will not pay the full amount of any lossif the value of the property subject to thecoverage at the time of the Covered Causeof Loss times the Coinsurance percentageshown for it in the Declarations is greaterthan the applicable limit.

Instead, we will determine the most we willpay using the following steps:

(1) Multiply the value of the propertysubject to the coverage at the time ofthe Covered Cause of Loss by theCoinsurance percentage;

(2) Divide the applicable limit by theamount determined in step (1);

(3) Multiply the total amount of loss,before the application of anydeductible, by the amountdetermined in step (2); and

(4) Subtract the deductible from theamount determined in step (3).

We will pay the amount determined in step(4) or the applicable limit, whichever isless. For the remainder, you will either haveto rely on other insurance or absorb the lossyourself.



b. Coinsurance applies separately to eachinsured location.

EXAMPLE 1 (Underinsurance)

When:

The actual value of “perishable goods” at thelocation of loss at the time of the Covered Causeof Loss is $200,000.

The Perishable Goods limit is $100,000 @ 80%coinsurance.

The loss under Perishable Goods coverageresulting from the Covered Cause of Loss is$60,000.

The Perishable Goods deductible is $5,000.

Step 1: $200,000 x 80% = $160,000

Step 2: $100,000/$160,000 = .625

Step 3: $60,000 x .625 = $37,500

Step 4: $37,500 - $5,000 = $32,500

The total Perishable Goods loss recovery, afterdeductible, would be $32,500. For theremainder, you will either have to rely on otherinsurance or absorb the loss yourself.

EXAMPLE 2 (Adequate insurance)

When:

The actual value of “perishable goods” at thelocation of loss at the time of the Covered Causeof Loss is $100,000.

The Perishable Goods limit is $100,000 @ 80%coinsurance.

The loss under Perishable Goods coverageresulting from the Covered Cause of Loss is$60,000.

The Perishable Goods deductible is $5,000.

Step 1: $100,000 x 80% = $80,000

Step 2: $100,000/$80,000 = 1.25

Coinsurance does not apply.

Step 3: $60,000 - $5,000 = $55,000

The total Perishable Goods loss recovery, afterdeductible, would be $55,000.

5. Defense

We have the right, but are not obligated, todefend you against suits arising from claims ofowners of property in your care, custody orcontrol. When we do this, it will be at ourexpense.

6. Duties in the Event of Loss or Damage

You must see that the following are done in theevent of loss or damage:

a. Give us a prompt notice of the loss ordamage, including a description of theproperty involved.

b. You must reduce your loss, damage orexpense, if possible, by:

(1) Protecting property from furtherdamage. We will not pay for yourfailure to protect property, as statedin Exclusion B.1.g.;

(2) Resuming business, partially orcompletely at the location of loss orat another location;

(3) Making up lost business within areasonable amount of time. Thisincludes working extra time orovertime at the location of loss or atanother location. The reasonableamount of time does not necessarilyend when the operations areresumed;

(4) Using merchandise or other propertyavailable to you;

(5) Using the property or services ofothers; and

(6) Salvaging the damaged property.

c. Allow us a reasonable time and opportunityto examine the property and premisesbefore repair or replacement is undertakenor physical evidence of the Covered Causeof Loss is removed. But you must takewhatever measures are necessary forprotection from further damage.

d. Make no statement that will assume anyobligation or admit any liability, for anyloss, damage or expense for which we maybe liable, without our consent.

e. Promptly send us any legal papers ornotices received concerning the loss,damage or expense.

f. As often as may be reasonably required,permit us to inspect your property, premisesand records. Also permit us to take samplesof damaged and undamaged property forinspection, testing and analysis, and permitus to make copies from your books andrecords.

g. If requested, permit us to examine you andany of your agents, employees andrepresentatives under oath. We mayexamine any insured under oath while notin the presence of any other insured. Suchexamination:



(1) May be at any time reasonablyrequired;

(2) May be about any matter relating tothis insurance, your loss, damage orexpense, or your claim, including,but not limited to, your books andrecords; and

(3) May be recorded by us by anymethods we choose.

h. Send us a signed, sworn proof of losscontaining the information we request. Youmust do this within 60 days after ourrequest.

i. Cooperate with us in the investigation andsettlement of the claim.

7. Errors and Omissions

a. We will pay your loss covered by thisEquipment Breakdown coverage if suchloss is otherwise not payable solely becauseof any of the following:

(1) Any error or unintentional omissionin the description or location ofproperty as insured under thispolicy;

(2) Any failure through error to includeany premises owned or occupied byyou at the inception of this policy; or

(3) Any error or unintentional omissionby you that results in cancellation ofany premises insured under thispolicy.

b. No coverage is provided as a result of anyerror or unintentional omission by you inthe reporting of values or the coverage yourequested.

c. It is a condition of this coverage that sucherrors or unintentional omissions shall bereported and corrected when discovered. The policy premium will be adjustedaccordingly to reflect the date the premisesshould have been added had no error oromission occurred.

d. If an Errors and Omissions Limit isindicated in the Declarations, we will notpay more than the indicated amount forcoverage under this Condition.

8. Proving Your Loss

It is your responsibility, at your own expense, toprovide documentation to us:

a. Demonstrating that the loss, damage orexpense is the result of a Covered Cause of

Loss covered under this EquipmentBreakdown Coverage; and

b. Calculating the dollar amount of the loss,damage and expense that you claim iscovered.

Your responsibility in 8.a. above is withoutregard to whether or not the possible CoveredCause of Loss occurred at your premises orinvolved your equipment.

9. Salvage and Recoveries

When, in connection with any loss under thisEquipment Breakdown Coverage, any salvage orrecovery is received after the payment for suchloss, the amount of the loss shall be refigured onthe basis on which it would have been settledhad the amount of salvage or recovery beenknown at the time the loss was originallydetermined. Any amounts thus found to be dueeither party from the other shall be paidpromptly.

10. Valuation

We will determine the value of “coveredproperty” as follows:

a. Except as specified otherwise, our paymentfor damaged “covered property” will be thesmallest of:

(1) The cost to repair the damagedproperty;

(2) The cost to replace the damagedproperty on the same site; or

(3) The amount you actually spend thatis necessary to repair or replace thedamaged property.

b. The amount of our payment will be basedon the most cost-effective means to replacethe function, capacity and remaining usefullife of the damaged property. This mayinclude the use of generic, used orreconditioned parts, equipment or property.

c. Except as described in d. below, you mustpay the extra cost of replacing damagedproperty with property of a better kind orquality or of a different size or capacity.

d. Environmental, Safety and EfficiencyImprovements

If “covered equipment” requiresreplacement due to a Covered Cause ofLoss, we will pay your additional cost toreplace with equipment that we agree isbetter for the environment, safer for peopleor more energy or water efficient than the



equipment being replaced, subject to thefollowing conditions:

(1) We will not pay more than 150% ofwhat the cost would have been toreplace with like kind and quality;

(2) We will not pay to increase the sizeor capacity of the equipment;

(3) This provision only applies toProperty Damage coverage;

(4) This provision does not increase anyof the applicable limits;

(5) This provision does not apply to anyproperty valued on an Actual CashValue basis; and

(6) This provision does not apply to thereplacement of component parts.

e. The following property will be valued onan Actual Cash Value basis:

(1) Any property that does not currentlyserve a useful or necessary functionfor you;

(2) Any “covered property” that you donot repair or replace within 24months after the date of the CoveredCause of Loss; and

(3) Any “covered property” for whichActual Cash Value coverage isspecified in the Declarations.

Actual Cash Value includes deductions fordepreciation.

f. If any one of the following conditions ismet, property held for sale by you will bevalued at the sales price as if no loss ordamage had occurred, less any discountsand expenses that otherwise would haveapplied:

(1) The property was manufactured byyou;

(2) The sales price of the property isless than the replacement cost of theproperty; or

(3) You are unable to replace theproperty before its anticipated sale.

g. Except as specifically provided for underData Restoration coverage, “data” and“media” will be valued on the followingbasis:

(1) For mass-produced andcommercially available software, atthe replacement cost.

(2) For all other “data” and “media,” atthe cost of blank “media” forreproducing the records. We will notpay for “data” representing financialrecords based on the face value ofsuch records.

h. Air conditioning or refrigeration equipmentthat utilizes a refrigerant containing CFC(chlorofluorocarbon) substances will bevalued at the cost to do the least expensiveof the following:

(1) Repair or replace the damagedproperty and replace any lost CFCrefrigerant;

(2) Repair the damaged property,retrofit the system to accept a non-CFC refrigerant and charge thesystem with a non-CFC refrigerant;or

(3) Replace the system with one using anon-CFC refrigerant.

In determining the least expensive option,we will include any associated BusinessIncome or Extra Expense loss. If option (2)or (3) is more expensive than (1), but youwish to retrofit or replace anyway, we willconsider this better for the environment andtherefore eligible for valuation underparagraph d., Environmental, Safety andEfficiency Improvements. In such case,10.d.(1) above is amended to read: “Wewill not pay more than 150% of what thecost would have been to repair or replacewith like kind and quality.”

F. ADDITIONAL CONDITIONS

The following conditions apply in addition to theCommon Policy Conditions:

1. Additional Insured

If a person or organization is designated in thisEquipment Breakdown Coverage as anadditional insured, we will consider them to bean insured under this Equipment BreakdownCoverage only to the extent of their interest inthe “covered property.”

2. Bankruptcy

The bankruptcy or insolvency of you or yourestate will not relieve you or us of anyobligation under this Equipment BreakdownCoverage.

3. Concealment, Misrepresentation or Fraud

We will not pay for any loss and coverage willbe void if you or any additional insured at any



time:

a. Intentionally cause or allow loss, damageor expense in order to collect on insurance;or

b. Intentionally conceal or misrepresent amaterial fact concerning:

(1) This Equipment BreakdownCoverage;

(2) The “covered property”;

(3) Your interest in the “coveredproperty”; or

(4) A claim under this EquipmentBreakdown Coverage.

4. Jurisdictional Inspections

It is your responsibility to comply with any stateor municipal boiler and pressure vesselregulations. If any “covered equipment” that is“covered property” requires inspection tocomply with such regulations, at your option weagree to perform such inspection.

5. Legal Action Against Us

No one may bring a legal action against usunder this Equipment Breakdown Coverageunless:

a. There has been full compliance with all theterms of this Equipment BreakdownCoverage; and

b. The action is brought within two years afterthe date of the Covered Cause of Loss; or

c. We agree in writing that you have anobligation to pay for damage to “coveredproperty” of others or until the amount ofthat obligation has been determined byfinal judgment or arbitration award. No onehas the right under this policy to bring usinto an action to determine your liability.

6. Liberalization

If we adopt any standard form revision forgeneral use that would broaden the coverageunder this Equipment Breakdown Coveragewithout additional premium, the broadenedcoverage will apply to this EquipmentBreakdown Coverage commencing on the datethat such revision becomes effective in thejurisdiction where the Covered Cause of Lossoccurs.

7. Loss Payable

a. We will pay you and the loss payee shownin the Declarations for loss covered by thisEquipment Breakdown Coverage, as

interests may appear. The insurance coversthe interest of the loss payee unless the lossresults from conversion, secretion orembezzlement on your part or on the partof the loss payee.

b. We may cancel the policy as allowed by theCancellation Condition. Cancellation endsthis agreement as to the loss payee'sinterest. If we cancel, we will mail you andthe loss payee the same advance notice.

c. If we make any payment to the loss payee,we will obtain their rights against any otherparty.

8. Maintaining Your Property and Equipment

It is your responsibility to appropriatelymaintain your property and equipment. We willnot pay your costs to maintain, operate, protector enhance your property or equipment, even ifsuch costs are to comply with ourrecommendations or prevent loss, damage orexpense that would be covered under thispolicy.

9. Mortgage Holders and Lender's LossPayable

a. We will pay for direct damage to “coveredproperty” due to a Covered Cause of Lossto “covered equipment” to you and eachMortgage Holder and Lender Loss Payeeshown in the Declarations in their order ofprecedence, as interests in the “coveredproperty” may appear.

b. The Mortgage Holder and Lender LossPayee have the right to receive losspayment even if they have startedforeclosure or similar action on the“covered property.”

c. If we deny your claim because of your actsor because you have failed to comply withthe terms of this Equipment BreakdownCoverage, the Mortgage Holder and LenderLoss Payee will still have the right toreceive loss payment, provided theMortgage Holder and Lender Loss Payeedoes all of the following:

(1) Pays any premium due under thisEquipment Breakdown Coverage atour request if you have failed to doso;

(2) Submits a signed, sworn proof of losswithin 60 days after receiving noticefrom us of your failure to do so;

(3) Has notified us of any change in



ownership or material change in riskknown to the mortgage holder; and

(4) Has complied with all other termsand conditions of this Policy.

All of the terms of this EquipmentBreakdown Coverage will then applydirectly to the Mortgage Holder and LenderLoss Payee.

d. If we pay the Mortgage Holder and LenderLoss Payee for any loss and deny paymentto you because of your acts or because youhave failed to comply with the terms of thisEquipment Breakdown Coverage:

(1) The rights of the Mortgage Holderand Lender Loss Payee will betransferred to us to the extent of theamount we pay; and

(2) The rights of the Mortgage Holderand Lender Loss Payee to recoverthe full amount of their claim willnot be impaired.

At our option, we may pay to the MortgageHolder and Lender Loss Payee the wholeprincipal on the debt plus any accruedinterest. In this event, the mortgage or debtwill be transferred to us and you will payyour remaining mortgage or debt to us.

e. If we cancel this policy, we will givewritten notice to the Mortgage Holder andLender Loss Payee at least:

(1) 10 days before the effective date ofcancellation if we cancel for yournonpayment of premium; or

(2) 30 days before the effective date ofcancellation if we cancel for anyother reason.

f. If we elect not to renew this policy, we willgive written notice to the Mortgage Holderand Lender Loss Payee at least 10 daysbefore the expiration date of this policy.

g. If we suspend coverage, it will also besuspended as respects the Mortgage Holderand Lender Loss Payee. We will givewritten notice of the suspension to theMortgage Holder and Lender Loss Payee.

10. Other Insurance

If there is other insurance that applies to thesame loss, damage or expense, this EquipmentBreakdown Coverage shall apply only as excessinsurance after all other applicable insurance hasbeen exhausted.

11. Policy Period, Coverage Territory

Under this Equipment Breakdown Coverage:

a. The Covered Cause of Loss must occurduring the Policy Period, but expiration ofthe policy does not limit our liability.

b. The Covered Cause of Loss must occurwithin the following Coverage Territory:

(1) The United States of America(including its territories andpossessions);

(2) Puerto Rico; and

(3) Canada.

c. As respects Off Premises EquipmentBreakdown coverage only, the CoveredCause of Loss may occur in any countryexcept one in which the United States hasimposed sanctions, embargoes or similarrestrictions on the provision of insurance.

12. Privilege to Adjust with Owner

In the event of loss, damage or expenseinvolving property of others in your care,custody or control, we have the right to settle theloss, damage or expense with respect to suchproperty with the owner of the property.Settlement with owners of that property willsatisfy any claim of yours.

13. Suspension

Whenever “covered equipment” is found to bein, or exposed to, a dangerous condition, any ofour representatives may immediately suspendthe insurance against loss from a Covered Causeof Loss to that “covered equipment.” This canbe done by delivering or mailing a written noticeof suspension to:

a. Your last known address; or

b. The address where the “coveredequipment” is located.

Once suspended in this way, your insurance canbe reinstated only by an endorsement for that“covered equipment.”

If we suspend your insurance, you will get a prorata refund of premium for that “coveredequipment” for the period of suspension. But thesuspension will be effective even if we have notyet made or offered a refund.

14. Transfer of Rights of Recovery AgainstOthers to Us

If any person or organization to or for whom wemake payment under this Equipment BreakdownCoverage has rights to recover damages from



another, those rights are transferred to us to theextent of our payment. That person ororganization must do everything necessary tosecure our rights and must do nothing after lossto impair them. But you may waive your rightsagainst another party in writing:

a. Prior to a Covered Cause of Loss.

b. After a Covered Cause of Loss only if, attime of the Covered Cause of Loss, thatparty is one of the following:

(1) Someone insured by this Policy; or

(2) A business firm:

(a) Owned or controlled by you; or

(b) That owns or controls you.

G. DEFINITIONS

1. “Accident”

a. “Accident” means a fortuitous event thatcauses direct physical damage to “coveredequipment.” The event must be one of thefollowing:

(1) Mechanical breakdown, includingrupture or bursting caused bycentrifugal force;

(2) Artificially generated electricalcurrent, including electrical arcing,that damages electrical devices,appliances or wires;

(3) Explosion, other than combustionexplosion, of steam boilers, steampiping, steam engines or steamturbines;

(4) An event inside steam boilers, steampipes, steam engines or steamturbines that damages suchequipment;

(5) An event inside hot water boilers orother water heating equipment thatdamages such equipment; or

(6) Bursting, cracking or splitting.

b. None of the following is an “accident,”however caused and without regard towhether such condition or event is normaland expected or unusual and unexpected.However, if an event as defined under 1.a.above results from any of the following, itwill be considered an “accident.”

(1) Depletion, deterioration, rust,corrosion, erosion, settling or wear andtear;

(2) Any gradually developing condition;

(3) Any defect, programming error,programming limitation, computervirus, malicious code, loss of “data,”loss of access, loss of use, loss offunctionality or other condition withinor involving “data” or “media” of anykind;

(4) Contamination by a “hazardoussubstance”; or

(5) Misalignment, miscalibration, trippingoff-line, or any condition which can becorrected by resetting, tightening,adjusting or cleaning, or by theperformance of maintenance.

2. “Anchor Location” means a location, operatedby others, upon which you depend to attractcustomers to your scheduled location.

3. “Boilers and Vessels” means:

a. Boilers;

b. Steam piping;

c. Piping that is part of a closed loop used toconduct heat from a boiler;

d. Condensate tanks; and

e. Unfired vessels which, during normalusage, operate under vacuum or pressure,other than the weight of contents.

This term does not appear elsewhere in thiscoverage form, but may appear in theDeclarations.

4. “Building Utilities” means “coveredequipment” permanently mounted on or in abuilding and used to provide any of thefollowing services within the building: heating,ventilating, air conditioning, electrical power,hot water, elevator or escalator services, centralvacuum, natural gas service or communications.“Building utilities” does not include personalproperty or equipment used in manufacturing orprocessing.

5. “Buried Vessels or Piping” means any pipingor vessel buried or encased in the earth, concreteor other material, whether above or below grade,or in an enclosure which does not allow accessfor inspection and repair.

6. “Business Income” means the sum of:

a. The Net Income (net profit or loss beforeincome taxes) that would have been earnedor incurred; and

b. Continuing normal and necessary operatingexpenses incurred, including employeepayroll.



7. “Business Income Actual Annual Value”means the “business income” for the currentfiscal year that would have been earned had noCovered Cause of Loss occurred.

In calculating the “business income actualannual value,” we will take into account theactual experience of your business before theCovered Cause of Loss and the probableexperience you would have had without theCovered Cause of Loss.

8. “Business Income Estimated Annual Value”means the anticipated “business income”reported to us and shown in the Declarations. Ifno value is shown in the Declarations, the“business income estimated annual value” willbe the most recent report of anticipated“business income” values on file with us.

9. “Cloud Computing Services” meansprofessional, on-demand, self-service datastorage or data processing services providedthrough the Internet or over telecommunicationslines. This includes services known as IaaS(infrastructure as a service), PaaS (platform as aservice), SaaS (software as a service) and NaaS(network as a service). This includes businessmodels known as public clouds, communityclouds and hybrid clouds. “Cloud computingservices” include private clouds if such servicesare owned and operated by a third party.

10. “Covered Equipment”

a. “Covered equipment” means the following:

(1) Unless specified otherwise in theDeclarations:

(a) Equipment that generates,transmits or utilizes energy,including electroniccommunications and dataprocessing equipment; or

(b) Equipment which, duringnormal usage, operates undervacuum or pressure, other thanthe weight of its contents.

“Covered equipment” may utilizeconventional design and technologyor new or newly commercializeddesign and technology.

(2) Except as specifically provided forunder Civil Authority, ContingentBusiness Income, Off PremisesEquipment Breakdown, ServiceInterruption, paragraph (2) of DataRestoration and paragraph (2) ofPerishable Goods, such equipment

must be at a location indicated in theDeclarations and must be owned orleased by you, or operated under yourcontrol.

b. None of the following is “coveredequipment”:

(1) Structure, including but not limited tothe structural portions of buildingsand towers and scaffolding;

(2) Foundation;

(3) Cabinet, compartment, conduit orductwork;

(4) Insulating or refractory material;

(5) “Buried vessels or piping”;

(6) Waste, drainage or sewer piping;

(7) Piping, valves or fittings forming apart of a sprinkler or fire suppressionsystem;

(8) Water piping that is not part of aclosed loop used to conduct heat orcooling from a boiler or arefrigeration or air conditioningsystem;

(9) “Vehicle” or any equipment mountedon a “vehicle”;

(10) Satellite, spacecraft or any equipmentmounted on a satellite or spacecraft;

(11) Dragline, excavation or constructionequipment;

(12) Equipment manufactured by you forsale; or

(13) “Data.”

11. “Covered Property”

a. “Covered Property” means property thatyou own or property that is in your care,custody or control and for which you arelegally liable. Such property must be at alocation indicated in the Declarationsexcept as provided under Off PremisesEquipment Breakdown coverage.

b. None of the following is “coveredproperty”:

(1) Accounts, bills, currency, deeds orother evidences of debt, money, notesor securities;

(2) Fine arts, jewelry, furs or preciousstones;

(3) Precious metal, unless forming a partof “covered equipment”;



(4) Animals;

(5) Contraband, or property in thecourse of illegal transportation ortrade;

(6) Land (including land on which theproperty is located), water, trees,growing crops or lawns; or

(7) Shrubs or plants, unless held indoorsfor retail sale.

12. “Data” means information or instructions storedin digital code capable of being processed bymachinery.

13. “Electrical Generating Equipment”

a. “Electrical Generating Equipment” meansequipment which converts any other formof energy into electricity. This includes, butis not limited to, the following:

(1) Boilers used primarily to providesteam for one or more turbine-generator units;

(2) Turbine-generators (including steam,gas, water or wind turbines);

(3) Engine-generators;

(4) Fuel cells or other alternativeelectrical generating equipment;

(5) Electrical transformers, switchgearand power lines used to convey thegenerated electricity; and

(6) Associated equipment necessary forthe operation of any of theequipment listed in (1) through (5)above.

b. “Electrical Generating Equipment” doesnot mean:

(1) Elevator or hoist motors thatgenerate electricity when releasingcable; or

(2) Equipment intended to generateelectricity solely on an emergency,back-up basis.


14. “Electronic circuitry” means microelectroniccomponents, including but not limited to circuitboards, integrated circuits, computer chips anddisk drives.

15. “Electronic Circuitry Impairment”

a. “Electronic circuitry impairment” means afortuitous event involving “electroniccircuitry” within “covered equipment” thatcauses the “covered equipment” tosuddenly lose its ability to function as ithad been functioning immediately beforesuch event. This definition is subject to theconditions specified in b., c., and d. below.

b. We shall determine that the reasonable andappropriate remedy to restore such“covered equipment's” ability to function isthe replacement of one or more “electroniccircuitry” components of the “coveredequipment.”

c. The “covered equipment” must be ownedor leased by you, or operated under yourcontrol.

d. None of the following is an “electroniccircuitry impairment”:

(1) Any condition that can bereasonably remedied by:

(a) Normal maintenance, includingbut not limited to replacingexpendable parts, rechargingbatteries or cleaning;

(b) Rebooting, reloading orupdating software or firmware;or

(c) Providing necessary power orsupply.

(2) Any condition caused by or relatedto:

(a) Incompatibility of the “coveredequipment” with any softwareor equipment installed,introduced or networked withinthe prior 30 days; or

(b) Insufficient size, capability orcapacity of the “coveredequipment.”

(3) Exposure to adverse environmentalconditions, including but not limitedto change in temperature orhumidity, unless such conditionsresult in an observable loss offunctionality. Loss of warranty shallnot be considered an observable lossof functionality.



16. “Extra Expense” means the additional cost youincur to operate your business over and abovethe cost that you normally would have incurredto operate your business during the same periodhad no Covered Cause of Loss occurred.

17. “Hazardous Substance” means any substancethat is hazardous to health or has been declaredto be hazardous to health by a governmentalagency.

18. “Interruption of Service”

a. “Interruption of service” means a failure ordisruption of the normal supply of any ofthe Covered Services listed in b. and c.below, when such failure or disruption iscaused by an “accident” to “coveredequipment,” subject to the conditions listedin d. through g. below. The failure ordisruption must arise from an “accident”even if the Covered Cause of Loss for thispolicy includes “electronic circuitryimpairment.”

b. Covered Services are electrical power,waste disposal, air conditioning,refrigeration, heating, natural gas,compressed air, water, steam, Internetaccess, telecommunications services, widearea networks and data transmission.

c. If indicated in the Declarations, CoveredServices also includes “cloud computingservices.”

d. The “covered equipment” must either be:

(1) Owned by a company with whom youhave a contract to supply you with oneof the Covered Services; or

(2) Used to supply you with one of theCovered Services and located withinone mile of a location indicated in theDeclarations.

e. If a Service Interruption DistanceLimitation is indicated in the Declarations,the “covered equipment” suffering the“accident” must be located within theindicated distance of any location indicatedin the Declarations.

f. If an Interruption of Service WaitingPeriod is indicated in the Declarations, nofailure or disruption of service will beconsidered to qualify as an “interruption ofservice” until the failure or disruptionexceeds the indicated number of hoursimmediately following the “accident.”

g. “Interruption of service” does not include

any failure or disruption, whether or notarising from or involving an “accident,” inwhich a supplier could have continued toprovide service to the location but chosefor any reason to reduce or discontinueservice.

19. “Interruption of Supply”

a. “Interruption of Supply” means a failure ordisruption of the normal supply of any ofthe Covered Contingencies listed below,when such failure or disruption is causedby an “accident” to “covered equipment”that is located at a Contingent BusinessIncome supplier or receiver locationindicated in the Declarations. If noContingent Business Income supplier orreceiver location is indicated in theDeclarations, the “covered equipment”must be owned by a supplier from whomyou have received the CoveredContingency for at least six months prior tothe “accident” or a receiver to whom youhave supplied the Covered Contingency forat least six months prior to the “accident.”

b. Covered Contingencies are raw materials,intermediate products, finished products,packaging materials and product processingservices.

20. “Media” means material on which “data” isrecorded, such as magnetic tapes, hard disks,optical disks or floppy disks.

21. “One Equipment Breakdown”

a. If Electronic Circuitry Impairment isindicated in the Declarations as Included,“one equipment breakdown” means all“accidents” or “electronic circuitryimpairments” occurring at the same timefrom the same event. If an “accident” or“electronic circuitry impairment” causesother “accidents” or “electronic circuitryimpairments,” all will be considered “oneequipment breakdown.”

b. If Electronic Circuitry Impairment isindicated in the Declarations as NotIncluded, “one equipment breakdown”means all “accidents” occurring at the sametime from the same event. If an “accident”causes other “accidents,” all will beconsidered “one equipment breakdown.”

22. “Ordinary Payroll” means the PayrollExpenses associated with all employees otherthan executives, department managers andemployees under contract.



As used above, Payroll Expenses means allpayroll, employee benefits directly related topayroll, FICA payments you pay, union duesyou pay and workers compensation premiums.

“Ordinary payroll” does not include pensions ordirectors fees.


23. “Period of Restoration”

a. Except as indicated in b. below, “period ofrestoration” means the period of time thatbegins at the time of the Covered Cause ofLoss and continues until the earlier of:

(1) The date the “covered equipment” isrepaired or replaced; or

(2) The date on which such equipmentcould have been repaired or replacedwith the exercise of due diligence anddispatch,

plus the number of days, if any, shown inthe Declarations for Extended Period ofRestoration.

b. Only as respects Civil Authority coverage,“period of restoration” means the period oftime that begins at the time access isprohibited by action of civil authority andcontinues until the earlier of:

(1) Twenty one (21) days thereafter; or

(2) The date access is restored.

24. “Perishable Goods” means any “coveredproperty” subject to deterioration or impairmentas a result of a change of conditions, includingbut not limited to temperature, humidity orpressure.

25. “Production Machinery” means any machineor apparatus that processes or produces aproduct intended for eventual sale. This includesall component parts of such machine orapparatus and any other equipment usedexclusively with such machine or apparatus.However, “production machinery” does notmean any boiler, or fired or unfired pressurevessel.


26. “Spoilage” means any detrimental change instate. This includes but is not limited to thawingof frozen goods, warming of refrigerated goods,freezing of fresh goods, solidification of liquid

or molten material and chemical reactions tomaterial in process.

27. “Vehicle” means any machine or apparatus thatis used for transportation or moves under itsown power. “Vehicle” includes, but is notlimited to, car, truck, bus, trailer, train, aircraft,watercraft, forklift, bulldozer, tractor orharvester.

However, any property that is stationary,permanently installed at a covered location andthat receives electrical power from an externalpower source will not be considered a “vehicle.”

Deductibles EndorsementNamed Insured:Montana Association of Counties Property & Casualty Trust



This endorsement changes the policy. Please read it carefully.

EFB DEDUCT 07/2015

This Endorsement applies to Declaration 1:

Combined Deductible: $100,000 applicable to Deep Well Pump Units BuffaloRapids Irrigation District.

Deductibles EndorsementNamed Insured:Montana Association of Counties Property & Casualty Trust




EFB DEDUCT 07/2015

This Endorsement applies to Declaration 2:

Combined Deductible: $100,000 applicable to Deep Well Pump Units BuffaloRapids Irrigation District.

Omnibus Location DescriptionNamed Insured:Montana Association of Counties Property & Casualty Trust




EFB OMNIBUS3 10/2002 Page 1 of 1

In consideration of the Report of Locations and Values, which is on file with us, the following is added tothe Schedule of Locations:

Any location within the “Coverage Territory” of this policy and which is:

a) Owned by you; or

b) Leased by and operated under your control and for which you are legally liable.

Newly acquired locations must be reported to us in accordance with the Newly Acquired LocationsCOVERAGE of this policy.

REPORT OF LOCATION AND VALUES

You shall prepare as of the date this Equipment Breakdown Coverage becomes effective, and as of each12 months thereafter, a Report of Locations and Values showing the following:

1) Each location owned by you, or leased and operated under your control on the date for which thereport is prepared;

2) The building and contents values of each location; and3) The Business Income values of each location, if Business Income coverage is applicable.

This Report shall be filed with us not later than 30 days prior to each anniversary date. We shall computethe policy premium as of the anniversary date based on the report as filed with us.

Special EndorsementNamed Insured:Montana Association of Counties Property & Casualty Trust




END SPECIAL 09/2005

Equipment Breakdown Coverage Part Declarations No. 2 applies to BuildersRisk locations only;Equipment Breakdown Coverage Part Declarations No. 1 applies to all otherlocations.

Terrorism Risk Insurance Act DisclosureNamed Insured:Montana Association of Counties Property & Casualty Trust



Includes copyrighted material of National Association of Insurance Commissioners with its permission.END EBTRIA 01/2015 Page 1 of 1

This endorsement is attached to and made part of your policy in response to the disclosure requirementsof the Terrorism Risk Insurance Act, as amended.

NOTICE OF TERRORISM INSURANCE COVERAGE

Applicable Premium

The portion of your annual premium that is attributable to coverage for acts of terrorism is $0, and doesnot include any charges for the portion of losses covered by the United States government under the Act.

Informational Notice

The following notice does not change your coverage under this policy, but is provided for yourinformation in compliance with the Terrorism Risk Insurance Act, as amended.

Coverage for acts of terrorism is included in your policy. You are hereby notified that under theTerrorism Risk Insurance Act, as amended in 2015, the definition of act of terrorism haschanged. As defined in Section 102(1) of the Act: The term “act of terrorism” means any act oracts that are certified by the Secretary of the Treasury—in consultation with the Secretary ofHomeland Security, and the Attorney General of the United States—to be an act of terrorism; tobe a violent act or an act that is dangerous to human life, property, or infrastructure; to haveresulted in damage within the United States, or outside the United States in the case of certain aircarriers or vessels or the premises of a United States mission; and to have been committed by anindividual or individuals as part of an effort to coerce the civilian population of the United Statesor to influence the policy or affect the conduct of the United States Government by coercion.Under your coverage, any losses resulting from certified acts of terrorism may be partiallyreimbursed by the United States Government under a formula established by the Terrorism RiskInsurance Act, as amended. However, your policy may contain other exclusions which mightaffect your coverage, such as an exclusion for nuclear events. Under the formula, the UnitedStates Government generally reimburses 85% through 2015; 84% beginning on January 1, 2016;83% beginning on January 1, 2017; 82% beginning on January 1, 2018; 81% beginning onJanuary 1, 2019 and 80% beginning on January 1, 2020, of covered terrorism losses exceedingthe statutorily established deductible paid by the insurance company providing the coverage. TheTerrorism Risk Insurance Act, as amended, contains a $100 billion cap that limits U.S.Government reimbursement as well as insurers' liability for losses resulting from certified acts ofterrorism when the amount of such losses exceeds $100 billion in any one calendar year. If theaggregate insured losses for all insurers exceed $100 billion, your coverage may be reduced.

Montana Changes

Amendatory Endorsement

This endorsement changes the policy. Please read it carefully.These changes apply only to locations covered by the policy that are in the State of Montana.

FBP MT 09/2014 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 1 of 2

I. The following modifies the AGREEMENT ANDCONDITIONS:

A. Section I. COMMON POLICYCONDITIONS, A. CANCELLATION,Paragraphs 2. and 5. are deleted andreplaced with the following:

2. a. Midterm CancellationWe may cancel this policy based onthe provisions below, by mailing ordelivering written notice to the firstNamed Insured at least 10 daysbefore the effective date ofcancellation:(1) If this policy has been in effect

for less than 60 days, except asprovided in 2.a.(3) below, wemay cancel for any reason.

(2) If this policy has been in effectfor 60 days or more, we maycancel this policy prior to theexpiration of the agreed term orprior to one year from theeffective date of the policy orrenewal, whichever is less, onlyfor one or more of the followingreasons:(a) Failure to pay a premium

when due;(b) Material misrepresentation;(c) Substantial change in the

risk assumed, except to theextent that we shouldreasonably have foreseenthe change or contemplatedthe risk in writing thecontract;

(d) Substantial breaches ofcontractual duties,conditions or warranties;

(e) Determination by theCommissioner of Insurancethat continuation of thepolicy would place us inviolation of the MontanaInsurance Code;

(f) Financial impairment of us;or

(g) Such other reasons that areapproved by theCommissioner of Insurance.

(3) If this policy has been issued fora term longer than 1 year, and ifeither the premium is prepaid oran agreed term is guaranteedfor additional premiumconsideration, we may cancelthis policy only for one or moreof the reasons stated in 2.a.(2)above.

b. Anniversary CancellationWe may cancel any policy with aterm of more than 1 year by mailingor delivering to the first NamedInsured written notice of cancellationat least 45 days before theanniversary date of the policy. Suchcancellation will be effective on thepolicy's anniversary date.

5. If this policy is cancelled, we will sendthe first Named Insured any premiumrefund due. If we cancel, the refund willbe pro rata. If the first Named Insuredcancels, the refund may be less than prorata. The cancellation will be effectiveeven if we have not made or offered arefund.However, when a financed insurancepolicy is cancelled, we will send anyrefund due to the premium financecompany on a pro rata basis.

B. The following are added to Section I.COMMON POLICY CONDITIONS:

A. NONRENEWAL

1. If we elect not to renew thisEquipment Breakdown Coverage,we will mail or deliver to the firstNamed Insured shown in theDeclarations and agent, if any, anotice of intention not to renew atleast 45 days before the agreedexpiration date.

2. We need not mail or deliver thisnotice if:

Montana Changes, continued

FBP MT 09/2014 Includes copyrighted material of Insurance Services Office, Inc., with its permission. Page 2 of 2

a. You have purchased insuranceelsewhere;

b. You have accepted replacementcoverage;

c. You have requested or agreedto nonrenewal; or

d. This policy is expresslydesignated as nonrenewable.

B. If you request in writing within 60business days of the mailing of thenotice of cancellation or nonrenewal theinformation that we or the insuranceproducer used to make its decision, wemust send such information within 21days of receiving such written request.This requirement does not apply if theground for cancellation or nonrenewal isnonpayment of premium and the reasonis stated in the notice.

II. The following modifies the EQUIPMENTBREAKDOWN COVERAGE FORM:

A. Section F. ADDITIONAL CONDITIONS,Paragraph 3. Concealment,Misrepresentation or Fraud is deleted and

replaced with the following:3. Concealment, Misrepresentation or

Fraud

We will not pay for loss or damage in acase of:a. Concealment or misrepresentation

of a material fact; orb. Fraudcommitted by you or any other insuredwhether before or after the loss andrelating to coverage of the loss underthis policy or in the application for thispolicy.

B. The following is added to Section F.ADDITIONAL CONDITIONS:

Conformity with Montana statutes.

The provisions of this policy conform to theminimum requirements of Montana law andcontrol over any conflicting statutes of anystate in which the insured resides on or afterthe effective date of this policy.

Documents

RPS, INC. B&M PROGRAM...Extended Period of Restoration 365 Days Newly Acquired Locations 365 Days Business Income Coinsurance Waived Until 07/01/2019 Notice of Cancel. other than non-payment