SCHEDULE26 REQUIRED INSURANCE - Cornwall Council€¦ · Contractors' All Risks Insurance. Coverage "All Risks" of physical loss, destruction or damage to the Insured Property from

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SCHEDULE26

REQUIRED INSURANCE

Part 1: -Operational Insurance Programme

Part 2: -Construction Insurance Programme

Part 3: - Broker's Letter of Undertaking

Part 4: - Endorsements

Part 5: - Not used

Part 6 - Definitions

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PART 1 -OPERATIONAL INSURANCE PROGRAMME

1. Property Damage Insurance

Insured Parties

a) The Authority;

b) The Contractor;

c) The Finance Parties;

d) The Subcontractors.

as eo-insured and each for their respective rights and interests in the Project.

Insured Property

Any real and personal property of whatsoever nature or description which is the subject

matter of the Project and which is the property of the Insured Parties or for which the

Insured Parties may be responsible, unless more specifically insured under the

Contractors' All Risks Insurance.

Coverage

"All Risks" of physical loss, destruction or damage to the Insured Property from any cause

not excluded including Machinery Breakdown in respect of the RWTP.

Sum Insured

An amount not less than the full reinstatement or replacement value of the Insured

Property plus an amount sufficient to cater for the requirements of the principal

extensions.

Territorial Limits

Anywhere in the United Kingdom

Period of Insurance

From the Service Commencement Date, or in the case of the Works from the date when

the interest insured transfers from the Construction Insurance Programme, until the

earlier of the Contract Expiry Date and the Termination Date.

Cover Features & Extensions

a) Terrorism cover.

b) Automatic reinstatement of sum insured.

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c) Capital additions clause.

d) Debris removal clause.

e) 72 hour clause (earthquake and weather).

f) Professional fees.

g) European authority clause.

h) Repair/reinstatement basis of claims settlement with cash option for non

reinstatement.

i) Expediting Expenses

j) Temporary offsite storage

k) Strikes, riot and civil commotion

I) Plans and documents

m) Professional Fees

n) Payments on account

o) Computer data reinstatement

p) Engineering breakdown

q) Temporary Repairs

Principal Exclusions

a) War and related perils (UK market agreed wording).

b) Nuclear/radioactive risks (UK market agreed wording).

c) Pressure waves caused by aircraft and other aerial devices travelling at sonic or

supersonic speeds.

d) Wear, tear and gradual deterioration, latent defect, defective design, materials or

workmanship, however not excluding consequential damage.

e) Unexplained shortages.

f) Pollution and contamination to the insured property unless arising from an event

which itself is not otherwise excluded

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g) Waste fuel quality clause

h) Re'fractory linings clause

i) Consequential financial losses.

j) Cyber risks.

k) Latent defects, but not consequential damage which is otherwise insured.

Maximum Deductible

Not to exceed

a) £50,000 each loss in respect of non-RWTP facilities

b) £250,000 each loss in respect of the RWTP for fire and explosion only, £50,000 all

other perils


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2. Business Interruption Insurance

2.1 Insured Parties

a) The Contractor;

b) The Finance Parties

c) The Operating Subcontractor

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2.2 Indemnity

In respect of:

1. loss of anticipated Revenue during at least the Minimum Indemnity Period arising

from an interruption or interference in the operation of the Project as a result of

loss or damage covered under Property Damage Insurance effected in

accordance with Item 1 of Part 1 of this Schedule including physical loss or

damage which would be indemnifiable but for the application of any deductible;

2. the economic additional expenditure/increased cost of working necessarily and

reasonably incurred for the purpose of avoiding or reducing the loss of Revenue of

the Contractor which without such expenditure would have taken place, during the

Minimum Indemnity Period .

2.3 Sum Insured

An amount sufficient to cover the sums the subject of the Indemnity, for the Minimum

Indemnity Period, including in respect of additional increased cost of working.

2.4 Maximum Deductible

a) £50,000 each loss in respect of non-RWTP facilities

b) 60 days in respect of the RWTP

2.5 Minimum Indemnity Period

12 months for non-RWTP facilities


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42 months for the RWTP

18 months in respect of machinery breakdown (RWrP only)

2.6 Period of Insurance

From the Service Commencement Date, or in the case of the Works from the date when the

interest insured transfers from the Construction Insurance Programme, until the earlier of

the Contract Expiry Date and the Termination Date.

2.7 Cover Features & Extensions

a) Denial of access.

b) Terrorism cover.

c) Engineering breakdown

d) Utilities.

e) Accountants clause.

f) Automatic re·instatement of the sum insured subject to the payment of any additional

premium requirement

g) Payments on account

h) Suppliers extension.

i) Additional Increased Cost of Working .

2.8 Principal Exclusions

a) Exclusions under the Property Damage Insurance, other than for consequential financial

losses as insured hereunder.

b) Delayed response by a public body or state authority.

3. Third Party Public and Products Liability Insurance

Insured Parties

a) The Authority;

b) The Contractor;

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d) The Subcontractors (i.e. the Contractor's counterparties to the project documents) as

eo-insured and each for their respective rights and interests in the Project.

Interest

Legal liability of the Insured Parties to pay damages (including claimants' costs and

expenses) in respect of or consequent upon accidental:

a) death or bodily injury to or sickness, loss of sight, anguish or shock whether mental or

otherwise, or illness or disease contracted by any person;

b) loss or damage to property;

c) interference to property or any easement, right or air, light, water or way of the

enjoyment or use thereof by obstruction, trespass, loss of amenities, nuisance or any

like cause

happening during the Period of Insurance and arising out of or in connection with the

Project.

Limit of Indemnity

Not less than £25,000,000 in respect of any one occurrence, the number of occurrences

being unlimited, but £25,000,000 in the aggregate in respect of products liability and

pollution liability.

With effect from the RWTP Operational Commencement Date the limit shall be not less

than £50,000,000 in respect of any one occurrence, the number of occurrences being

unlimited, but £50,000,000 in the aggregate in respect of products liability and pollution

liability.

Territorial Limits

Worldwide excluding USA/Canada other than non-manual visits.

Jurisdiction

Worldwide (excluding USA and Canada).

Period of Insurance

From the Service Commencement Date, or in the case of the Works from the date when

the interest insured transfers from the Construction Insurance Programme, until the

earlier of the Expiry Date and the Termination Date.



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a) Contractualliability.

b) Health & Safety at Work Act(s) clause.

c) Defective Premises Act clause.

d) Data Protection Act clause.

e) Cross liability clause.

f) Motor contingent liability.

g) Costs in addition to the limit (other than USA/Canada).

h) Contingent liability of the Insured Parties for the acts of their sub-contractors .

i) Insured to include directors, officers, and employees of the insured parties.

j) Consumer Protection Act 1987.

k) Libel and slander.

I) Social functions and activities.

m) Infringement of privacy and wrongful arrest.

Principle Exclusions

a) Liability for death, illness, disease or bodily injury sustained by employees of the

insured during the course of their employment i.e. Employers' Liability .

b) Liability arising out of the use of mechanically propelled vehicles whilst required to be

compulsorily insured by legislation in respect of such vehicles.

c) Liability in respect of predetermined penalties or liquidated damages imposed under

any contract entered into by the Insured Parties.

d) Liability in respect of loss or damage to property in the care, custody and control of

the Insured Parties but this exclusion is not to apply to all property belonging to the

Authority.

e) Liability arising out of technical or professional advice other than in respect of death or

bodily injury to persons or damage to third party property.

f) Liability arising from the ownership, possession or use of any aircraft or marine

vessel.


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g) Liability arising from seepage and pollution unless caused by a sudden, unintended

and unexpected occurrence.

h) War and related perils (UK market agreed wording).

i) Nuclear/radioactive risks (UK market agreed wording).

j) Liability arising from toxic mould.

k) Liability arising from asbestos.

I) Cyber risks.

Maximum Deductible

Not to exceed £50,000 each occurrence in respect of loss or damage to third party

property. (escalated periodically as appropriate)

Environmental Impairment Liability

Insured Parties

a) The Authority;

b) The Contractor;


d) The Subcontractors (i.e. the Contractor's counterparties to the project documents)


Interest

To indemnify the Insured Parties in respect of all sums that they may become legally

liable to pay consequent to a pollution incident and/or action by a relevant authority (e.g.

Local Authority or Environment Agency or a judicial authority) or a third party and

resulting in a claim or claims first made against the Insured Parties and reported to the

Insurer during the policy period. A pollution incident relates to either pre-existing pollution

or pollution subsequently caused by the Contractor in connection with the Project and the

provision of the Services.

Limit of Indemnity

Not less than £5,000,000 in respect of any one pollution incident loss, the number of pollution

incident losses being unlimited and not less than £15,000,000 in the aggregate for the Existing

Landfills and not less than £10,000,000 in the aggregate for non-landfill sites, in respect of

seepage, pollution and liability for a maximum period of 5 years.

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Territorial Limits

United Kingdom.

Period of Insurance

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From the Service Commencement Date until the earlier of the Expiry Date and the

Termination Date.


a) Regulatory or third party claims for on site clean-up of pre-existing and new conditions

where otherwise not excluded.

b) Regulatory or third party claims for off-site clean-up of pre-existing and new

conditions where otherwise not excluded.

c) Third party claims for on-site and off-site property damage from pre-existing and new

conditions.

d) Third party claims for on-site and off-site bodily injury from pre-existing and new

conditions.

e) Legal costs.

f) No retroactive date.

g) Emergency costs to prevent a claim.

h) The Integrated Waste Management PFI Contract to be an insured contract.



b) Terrorism.

c) Nuclear/radioactive risks (UK market agreed wording).

d) Asbestos and lead (this exclusion shall not extend to remediation costs with respect

to soil and groundwater).

e) Intentional, wilful or deliberate non-compliance with any EU, Authority decision or any

UK or EU regulation.


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f) Pre-existing conditions related to an old landfill (closed landfill site). This exclusion

shall not apply to the Old Connon Bridge Landfill Site in relation to which the

Contractor shall seek as wide additional cover as possible from the insurer which

insures the first Environmental Impairment Liability policy with effect from16 October

2006. The extent of such additional insurance cover is to be agreed between the

Contractor and the Authority before the date 3 months following 16 October 2006, and

the additional premium relating thereto shall be reimbursed to the Contractor in

accordance with the terms of Schedule 35.

g) Criminal fines and penalties.

h) On-site remediation costs on landfill sites.

i) Capital improvements .

j) Voluntary site investigation

k) Change in use/site development (other than changes in use/development to another

waste facility/refurbishment or landfill cell construction).

I) Contractual liability save where liability would arise in the absence of such a contract.

This exclusion shall not apply if such a contract is scheduled as an insured contract

under the policy.

m) Damage to property owned, leased, rented, licensed, occupied or loaned to an

insured.

n) Employers' liability of the Contractor.

o) Arising from a claim by an insured against any other person or entity who is also an

insured under this insurance save where the claim is made either (a) in relation to an

insured contract or (b) by the Authority.

p) Costs, charges, or expenses for goods or services of an insured or its parent,

subsidiary or affiliate, unless such costs, charges or expenses are emergency

expense or are incurred with prior written consent of insurers.

q) Known incidents prior to the policy inception date beyond those disclosed to the

insurer in the application for the policy arising from a pollution incident.

r) Underground storage tanks.

s) Liability based upon or arising out of any mildew, mould or other fungi, or their

mycotoxins, spores or other byproducts.


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t) Liability arising from naturally occurring substances unless such substances are

detected in levels or concentrations in excess of those naturally present at an insured

site.

u) Known Conditions as follows:

a. Landfill gas migration from the eastern boundary of the United Mines landfill site

b. The disposal of the Torrey Canyon waste deposited in the abandoned mine shaft

at the United Mines site

c. List I substances in the groundwater at the United Mines site until such time as

the source of the groundwater contamination has been proven not to be the

United Mines landfill

d. Past and future odour complaints at the Cannon Bridge landfill, subject to receipt

and satisfactory review of information pertaining to the cause of the odour

releases has been identified and a suitable remediation plan implemented,

completed and accepted by the Environment Agency and us, this restriction will

be removed for any new pollution incidents. This will include any odours

produced during the efforts to reduce the leachate head in phases 1, 2 and 3

along with cell 3c.

e. Mecoprop at or emanating from Cannon Bridge Landfill or from the United Mines

Landfill until such time as the source has been identified and appropriate action

taken.

f. Any liability associated with the former landfill operations undertaken on the

Wheal Prosper HWRC site, Bodmin and associated refuse transfer station and

MRF plant; Tiscott Wood HWRC site, Bude; and Bangers Quarry HWRC site,

Launceston except in so far as any loss arises directly from the actions taken by

or on behalf of the Contractor .

g. Any liability associated with the closed (former dilute and disperse area as shown

on the attached plan and referenced as Plan 1) landfill located at the Con non

Bridge site (except insofar as any loss arises from the operation of the leachate

treatment plant and associated management processes used to treat leachate

from this closed landfill) except in so far as any loss arises directly from the

actions taken by or on behalf of the Contractor.

h. discharge dispersal seepage migration release or escape of any gases arising

from former or active mine workings and coal seams

Maximum Deductible

Not to exceed £1 00,000 each and every loss and £1 ,000,000 in the aggregate with a

maintenance retention not to exceed £20,000 each and every loss thereafter. (escalated

periodically as appropriate)


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PART 2- CONSTRUCTION INSURANCE PROGRAMME

1. Contractors' All Risks Insurance

Insured Parties

a) The Authority;

b) The Contractor;


d) The Construction Subcontractors and all other contractors and/or sub-contractors

and/or installing suppliers of any tier;

e) The Operating Subcontractor where phased handover or commissioning and testing

is likely to occur;

f) Professional consultants acting for any of the above for their site activities only,


Insured Property

All building works, temporary works, materials and all other property of whatsoever nature

or description (but excluding construction plant and equipment) for use in connection with

or for incorporation therein, and all facilities relating to the service, design, supply,

erection, installation, testing, setting to work and commissioning of the Works, the

property of Insured Parties or for which they may be responsible.

Coverage

"All Risks" of physical loss, destruction or damage to the Insured Property from any cause

not excluded.

Sum Insured

At all times an amount not less than the full reinstatement or replacement value of the

Insured Property plus an amount sufficient to cater for the requirements of the principal

extensions.

Territorial Limits

United Kingdom including offsite storage and whilst in transit (other than by sea and air)

including loading and unloading incidental thereto.

Period of Insurance

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From the start of any Works until the date when the interest insured transfers to the

Operational Insurance Programme, and in addition the defects liability period specified in

the Construction Subcontract.


a) Terrorism cover.

b) Professional fees.

c) Debris removal and demolition clause,

d) 72 hour clause (earthquake and weather).

e) Automatic increase clause .

f) Additional costs of completion clause,.

g) European authorities clause.

h) Automatic reinstatement of sum insured clause.

i) Munitions of war clause.

j) Expediting expenses.

k) Preventive measures clause.

I) Extended maintenance during the defects liability period for the RWTP, Guaranteed

maintenance otherwise .

m) Plans and documents.

n) Free issue materials, included with sum insured.

o) Marine 50/50.

p) Strikes, riot and civil commotion.

q) Inland transit.

r) Payments on account.

s) Computer data reinstatement.

t) Testing and Commissioning.


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u) Fire Joint Code of Practice.

v) Temporary Repairs.

w) Unbuilt Portion/inflation on incomplete works.

x) Offsite storage and repair.

Principal Exclusions


b) Nuclear/radioactive risks (UK market agreed wording).

c) Pressure waves caused by aircraft and other aerial devices travelling at sonic or

supersonic speeds.

d) Wear, tear and gradual deterioration.

e) Unexplained shortages.

f) Consequential financial losses.

g) Design exclusion LEG03/06.

h) Waste fuel quality clause.

i) Refractory linings clause.

j) Cyber risks .

Maximum Deductible

Not exceeding

a) £350,000 each and every loss arising out of LEG 03/06 and during testing and

commissioning or during the extended maintenance period

b) £100,000 in respect of losses arising out of fire, lightning, storm, flood, tempest,

water subsidence, and/or collapse

c) £25,000 all other

2. Delay in Start Up Insurance

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Insured Parties

The Contractor;

1) The Finance Parties

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2) The Operating Subcontractor where phased handover or commissioning and testing

is likely to occur


Indemnity

!n respect of:

1. loss of anticipated Revenue during the Minimum Indemnity Period, arising from a delay in

completion of the RWTP works only as a result of loss or damage covered under the

Contractors' All Risks Insurance effected in accordance with Item 1 of Part 2 of this

Schedule, including loss which would be indemnifiable but for the application of any

deductible;

2. the economic additional expenditure/increased cost of working necessarily and reasonably

incurred for the purpose of avoiding or reducing the loss of Revenue of the Contractor

from the delay in completion of the RWTP which without such expenditure would have

taken place, during the Minimum Indemnity Period.

Sum Insured

An amount sufficient to cover the sums the subject of the Indemnity for the Minimum

Indemnity Period, including additional increased cost of working .

Maximum Deductible

60days

Minimum Indemnity Period

42 months for the RWTP.

Period of Insurance

As per the Contractors' All Risks Insurance for the RWTP works period, excluding the defects

liability period.


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a) Denial of access.

b) Utilities,.

c) Terrorism cover.

d) Automatic Reinstatement of sum insured, subject to the payment of any additional

premium requirement.

e) Professional fees.

f) Payments on account.

g) Suppliers extension.

h) Additional Increased Cost of Working .

2.8 Principal Exclusions

a) The exclusions under the Contractors' All Risks Insurance, other than for consequential

financial losses.

b) Delayed response by a public body or state authority.

3. Marine Cargo Insurance

Insured

a) The Authority;

b) The Contractor;

c) The Finance Parties

d) The Construction Subcontractors and all other contractors and/or sub-contractors and/or

installing suppliers of any tier;

e) Professional consultants acting for any of the above for their site activities only;


Insured Property

a) All Property and interest of every description of a critical nature for all transits by sea or air

of all goods intended for the RWTP where such items are not otherwise covered by the

Contractors All Risk Insurance and are carried for the account and interest of the Insured

from risk attachment at factory premises to Site, including offsite storage.

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b) Open cover to accept all sendings despatched during the currency of the policy and to

accept all interests at lnsureds' risk in connection with the RWTP.

Coverage

a) All risks of loss destruction or damage to the Insured Property from any cause not

excluded.

b) Terrorism cover.

Limit of Indemnity

For any one sending/any one voyage not less than the full replacement value plus 10%

Territorial Limits

Europe

Jurisdiction

Worldwide (excluding USA/Canada).

Period of Insurance

From the commencement of appropriate transits until the delivery to the Site plus deferred

unpacking period.


a) Institute Cargo Clauses (A)

b) Institute War Clauses (Cargo)

c) Institute Strikes Clauses (Cargo)

d) Institute Classification Clauses

e) Institute War Cancellation Clauses (Cargo)

f) Overland transit cover but only if not covered under Construction "All Risks" Insurance

Concealed Damage Clause

g) Notice of Cancellation: seven (7) days for war, strikes, riots, and civil commotion, except

forty-eight (48) hours for sending to and from the United States of America. Otherwise,

non-cancellable.

h) Accumulation clause (200%)


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a) Ordinary leakage ordinary loss in weight or volume or ordinary wear and tear of the

subject matter insured;

b) Inherent vice or nature of the subject matter insured;

c) Insolvency or financial default of the owners managers charterer's or operators of the

vessel or aircraft, unless not material to the claim;

d) Un-seaworthiness of the vessel or craft, etc but only where the Insured is aware of the

un-seaworthiness;

e) Insufficiency or unsuitability of packing

f) Delay;

g) Vessel not ISM Code certified/SOLAS Convention;

h) War and Radioactivity on Land

Deductible

Not to exceed £100,000 each occurrence .

Marine Cargo Delay in Start Up

Insured Parties

a) The Contractor

b) The Finance Parties

as eo-insured and each for their respective rights and interest in the Project.

Indemnity

i) Loss of anticipated revenue of the Contractor anticipated during the Indemnity Period

arising from a delay in completion as a result of physical loss or damage covered

under Marine Cargo Insurance effected in accordance with paragraph 3 of Part 2 of

this Schedule including physical loss or damage which would be indemnifiable but for

the application of any deductible.

ii) The additional expenditure necessarily and reasonably incurred for the purpose of

avoiding or reducing the loss of fixed costs and debt service costs of the Contractor

Sum Insured

An amount sufficient to cover the sums the subject of the Indemnity for the Maximum

Indemnity Period, including in respect of additional increased costs of working.

Maximum Indemnity Period

24 months

Period of Insurance

From the commencement of appropriate transits until the delivery to the Site plus deferred

unpacking period.


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a) As per Marine Cargo policy plus;

b) Additional increased costs of working; and;

c) Payments on account.

Deductible

Not to exceed 30 days each occurrence .

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5. Third Party Public Liability Insurance

Insured

a) The Authority;

b) The Contractor;


d) The Construction Subcontractors and all other contractors and/or sub-contractors

and/or installing suppliers of any tier;

e) The Operating Subcontractor where phased handover or commissioning and testing is

likely to occur;

f) Professional consultants acting for any of the above for their manual site activities only;


Interest

Legal liability of the Insured Parties to pay damages (including claimants' costs and

expenses) in respect of or consequent upon accidental:

a) death or bodily injury to or sickness, loss of sight, anguish or shock whether mental or

otherwise, or illness or disease contracted by any person;

b) loss or damage to property;

c) interference to property or any easement, right of air, light, water or way of the

enjoyment or use thereof by obstruction, trespass, loss of amenities, nuisance or any

like cause;

happening during the Period of Insurance and arising out of or in connection with the

Works and the Project.

Limit of Indemnity

Not less than £25,000,000 in respect of any one occurrence, the number of occurrences

being unlimited, but £25,000,000 in the aggregate in respect of pollution and

contamination liability.


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With effect from the commencement of Works in relation to the RWTP the limit shall be

not less than £50,000,000 in respect of any one occurrence, the number of occurrences

being unlimited, but £50,000,000 in the aggregate in respect of pollution and

contamination liability.

Territorial Limits

Worldwide excluding USA/Canada other than non-manual visits.

Jurisdiction

Worldwide.

Period of Insurance

From the start of any Works until the date when the interest insured transfers to the

Operational Insurance Programme, and in addition the defects liability period specified in

the Construction Subcontract.


a) Contractualliability.

b) Liability arising out of CDM Regulations.

c) Health & Safety at Work Act(s) clause.

d) Cross liability clause.

e) Motor contingent liability .

f) Costs in addition to the limit (other than USA/Canada).

g) Munitions of war clause.

h) Data Protection Act clause.

i) Insured to include directors, officers, and employees of the insured parties

j) Consumer Protection Act 1987

k) Libel and slander

I) Social functions and activities

m) Infringement of privacy and wrongful arrest


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a) Liability for death, illness, disease or bodily injury sustained by employees of the

insured during the course of their employment i.e. Employers' Liability.

b) Liability arising out of the use of mechanically propelled vehicles whilst required to be

compulsorily insured by legislation in respect of such vehicles.

a) Liability in respect of predetermined penalties or liquidated damages imposed under

any contract entered into by the Insured Parties.

b) Liability in respect of loss or damage to property in the care, custody and control of

the Insured Parties but this exclusion is not to apply to all property belonging to the

Authority .

c) Liability arising out of technical or professional advice other than in respect of death or

bodily injury to persons or damage to third party property.

d) Liability arising from the ownership, possession or use of any aircraft or marine

vessel.

e) Liability arising from seepage and pollution unless caused by a sudden, unintended

and unexpected occurrence.

f) War and related perils (UK market agreed wording).

g) Nuclear/radioactive risks (UK market agreed wording).

h) Liability arising from toxic mould .

i) Liability arising from asbestos.

j) Cyber risks.

Deductible

Not to exceed £50,000 each occurrence in respect of loss or damage to third party

property.


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PART 3- BROKER'S LETTER OF UNDERTAKING

{To be typed on Broker's letterhead}

Broker's Letter of Undertaking

To: The Authority

Dear Sirs

Agreement dated [ ] entered into between

SITA Cornwall Limited (the "Contractor") and Cornwall Council (the "Authority") (the

• "Agreement")

1. We refer to the Agreement. Unless the context otherwise requires, terms defined in the

Agreement shall have the same meaning in this letter.

2. We act as insurance broker to the Contractor in respect of the insurances (which are defined in

clause 96 and schedule 26 of the Agreement attached hereto as Appendix A) evidenced by the

cover notes attached hereto as Appendix 8 ("Required lnsurances") and in that capacity we

confirm that the Required lnsurances:

2.1 where appropriate name you and such other persons as are required to be named pursuant to

the Agreement for their respective interests;

2.2 are, to the best of our knowledge and belief (after making all reasonable enquiries), as at

today's date, in full force and effect; and that

• 2.3 all premiums due as at today's date in respect of the Required lnsurances are paid and the

Required lnsurances are, to the best of our knowledge and belief, placed with insurers which, as

at the time of placement, are reputable and financially sound. We do not, however, make any

representations regarding such insurers' current or future solvency or ability to pay claims; and

that

2.4 the endorsements set out in Part 4 to Schedule 26 of the Agreement attached hereto as

Appendix C are to the best of our knowledge and belief as at today's date in full force and

effect.

3. We further confirm that the cover notes attached hereto as Appendix 8 confirm this position.

4. Pursuant to instructions received from the Contractor and in consideration of your approving our

appointment or continuing appointment as brokers in connection with the Required lnsurances,

we hereby undertake in respect of the interests of the Authority in relation to the Required

lnsurances:

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4.1 Notification Obligations

(a) to notify you at least 30 (thirty) days prior to the expiry of any of the Required

lnsurances if we have not received instructions from the Contractor to negotiate renewal

and in the event of our receiving instructions to renew, to advise you as soon as

reasonably practicable, and in any event within 3 working days, of the details thereof;

(b) to notify you at least 30 (thirty) days prior to ceasing to act as brokers to the

Contractor unless, due to circumstances beyond our control, we are unable to do so in

which case we shall notify you as soon as reasonably practicable and in any event

within 3 working days; and

(c) to pay into the Joint Insurance Account without set off or deduction of any kind or

for any reason, all payments in respect of claims received by us from insurers in relation

to the Required lnsurances specified in Clause 98 of the Agreement attached hereto as

• Appendix D.

•

4.2 Advisory Obligations

(a) to notify you as soon as reasonably practicable, and in any event within 3 working

days, of any default in the payment of any premium by the Contractor to us tor any of

the Required lnsurances;

(b) to notify you if any insurer cancels or gives notification of cancellation of any of the

Required lnsurances, at least 30 (thirty) days before such cancellation is to take effect

or as soon as reasonably practicable in the event that notification of cancellation takes

place less than 30 (thirty) days before it is to take effect;

(c) to notify you as soon as reasonably practicable of any act or omission, breach or

default of the Contractor of which those of our employees directly involved with the

placement or administration of the Relevant lnsurances becomes actually aware in their

capacity as brokers to the Contractor which acting reasonably they consider may

invalidate or render unenforceable in whole or in part any of the Required lnsurances or

which may otherwise materially impact on the extent of cover provided under the

Required lnsurances; and

4.2.4 in accordance with our duty to the Contractor, to advise the Contractor of its

duties of disclosure to insurers including:

4.2.4.1 the types of facts, circumstances and beliefs that should generally be

disclosed to insurers; and

4.2.4.2 the obligation not to misrepresent any facts, matters or beliefs to insurers.


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4.3 Disclosure Obligations

(a) subject to the prior written consent of the Contractor (and we undertake to notify

you as soon as reasonably practicable if such consent is withheld} to disclose to

insurers all information made available to those of our employees directly involved with

the placement of the Relevant lnsurances in their capacity as brokers to the Contractor

and any fact, change of circumstances or occurrence made known to such employees

which in our reasonable opinion is material to the risks insured against under the

Required lnsurances and which properly should be disclosed to insurers (in accordance

with the Contractor's duty of disclosure to insurers) as soon as practicable after we are

in receipt of such information; and become aware of such information, fact, change of

circumstance or occurrence whether prior to inception or renewal or otherwise ; and

(b) to treat as confidential all information so marked or otherwise stated to be

confidential and supplied to us by or on behalf of the Contractor or the Authority and not

to disclose such information, without the prior written consent of the supplier, to any

third party other than those persons who, in our reasonable opinion have a need to have

access to such information from time to time, and for the purpose of disclosure to the

insurers or their agents in respect of the Required lnsurances in discharge of our

obligation set out at clause 4.3.1 of this letter. Our obligations of confidentiality shall not

conflict with our duties owed to the Contractor and shall not apply to disclosure required

by an order of a court of competent jurisdiction, or pursuant to any applicable law,

governmental or regulatory authority having the force of law or to information which is in

the public domain.

4.4 Administrative Obligations

(a) to hold copies of all documents relating to or evidencing the Required lnsurances,

including but without prejudice to the generality of the foregoing, insurance slips,

contracts, policies, endorsements and copies of all documents evidencing renewal of

the Required lnsurances, payment of premiums and presentation and receipt of claims;

(b) subject to our lien over the Policies for premiums and/or commissions due, to

supply to the Authority and/or its insurance advisers (or the Authority's authorised

representatives) as soon as reasonably practicable, on written request copies of the

documents set out in clause 4.4.1 of this letter, and to the extent available, to make

available to such persons as soon as reasonably practicable, upon the Authority's

request the originals of such documents;

(c) to administer the payment of premiums due pursuant to the Required lnsurances

such that, in so far as we hold appropriate cleared funds from the Contractor, all such

premiums shall be paid to insurers in accordance with the terms of the Required

lnsurances;


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(d) to administer the payment of claims from insurers in respect of the lnsurances

(the "Insurance Claims") including:

(i) negotiating settlement of Insurance Claims presented in respect of the

Required lnsurances;

(ii) collating and presenting all information required by insurers in relation to

Insurance Claims presented in respect of the Required lnsurances, and

(iii) insofar as it is relevant and practicable, liaising with and reporting to each

Authority throughout the settlement, payment and administration of such

Insurance Claims.

(e) to advise the Authority as soon as reasonably practicable upon receipt of notice

of any material changes from the Contractor which we are instructed to make in the

terms of the Required lnsurances and which, if effected, in our reasonable opinion

as insurance brokers would result in any material reduction in limits or coverage or

in any material increase in deductibles, exclusions or exceptions; and

(f) to advise the Authority in advance, to the extent we are actually aware of in

advance, of any material change to the terms of, or any lapse, non-renewal and/or

cancellation of Required lnsurances.

4.5 Insurance Cost Reporting Procedures

5.

5.1

(a) to prepare following request, at the expense of the Contractor, a Joint Insurance Cost Report

on behalf of both the Contractor and the Authority in accordance with the Insurance Review

Procedure as set forth in Schedule 27 of the Agreement attached hereto as Appendix E. We

shall ensure that the information in the Joint Insurance Cost Report is fairly represented,

based on the information available to us.

Notification Details

Our obligations at clause 4 of this letter to notify or inform you shall be discharged by providing

the requisite information in hard copy to:

County Solicitor, Cornwall Council, New County Hall,

Treyew Road, Truro TR1 3AY, Cornwall


112

The undertakings given and obligations set out in this letter are given subject to any liability we

may incur to you arising out of or in connection with this letter whether in contract, tort (including

but not limited to negligence) or otherwise being limited in aggregate to £5,000,000.

All liability we may incur to you, whether in contract, tort (including but not limited to negligence)

or otherwise for loss of profit, loss of savings, loss of opportunity or any indirect or consequential

loss is hereby expressly excluded.

No limit of liability shall apply in the case of death or personal injury caused by our negligence, or

in respect of any loss caused by our fraud.

The undertakings given and obligations set out in this letter are given subject to insurers right to

cancel the Relevant lnsurances, are given solely in our capacity as broker to the Contractor,

relate only to the Relevant lnsurances and are subject to our continuing appointment as broker to

• the Contractor. Following termination of such appointment, we are, for the avoidance of doubt

and without prejudice to your accrued rights, released from all our ongoing obligations set out in

this letter.

•

You may not rely on any advice which we have given to the Contractor and we do not represent

that any of the Relevant lnsurances are suitable or sufficient to meet your needs and you must

take steps and advice of your own as you consider necessary in order to protect your own

position.

In the event that this letter is disclosed to any third party, any and all liability howsoever arising to

such third party is hereby expressly excluded to the extent permitted in law.

No person, except you, has any rights arising out of this letter under the Contract (Rights of Third

Parties) Act 1999 .

This letter shall be governed by and construed in all respects in accordance with the laws of

England and Wales.

This letter is given by us at the request of the Contractor and with the Contractor's full knowledge

and consent as to its terms, who confirms that we are authorised to give and comply with the

undertakings and acknowledges that compliance with the undertakings may be in conflict with the

interests of the Contractor, as evidenced by the Contractor's signature below.

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113

Yours faithfully

For and on behalf of [Contractor's broker]

Accepted for and on behalf of the Contractor

•

•

LIB01/F6JDWL/2591505.22 Hogan Lovells

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PART4-ENDORSEMENTS

LENDERS' AND AUTHORITY'S ENDORSEMENTS

These endorsements are to apply to the Required lnsurances in the Project Agreement and those

insurances required by the Common Terms Agreement other than those insurances required by

law and Professional Indemnity Insurance.

Notwithstanding any other provision of this Policy the following endorsement shall apply:

Section 1: Definitions

1 . In this endorsement

Authority means Cornwall Council

Global Agent means Mizuho Corporate Bank, Ltd in its capacity as global agent for the

Finance Parties and includes its successors in that capacity

Finance Parties for the purposes of this insurance schedule only, has the meaning given

to it in the Common Terms Agreement and includes any assignee, transferee, successor

or novated replacement or additional creditor of or in relation to any of the foregoing

Insured means those parties so described in the Policy Schedule

Company means [name of insurance company]

Joint Insurance Account means the account held in the joint names of Borrower and the

Authority with Mizuho Corporate Bank, Ltd with account number H10-741-087143 and

sort code 40-50-69

Project has the meaning given to it in the Common Terms Agreement

Borrower means SIT A Cornwall Limited

Borrower Insurance Proceeds Account means the account in the name of the Borrower

with Mizuho Corporate Bank, Ltd with account number H10-741-087054 and sort code

40-50-69

Common Terms Agreement means the common terms agreement dated 16 October 2006

(as amended and restated from time to time) and made between amongst others the

Borrower, Hold Co, the Global Agent and the Finance Parties

Security Agent means The Law Debenture Trust Corporation p.l.c.


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Section 11: Policy formation I basis

2. Separate Policy

2.1 This Policy shall operate as if there were a separate policy covering each Insured.

Accordingly the liability of the Company under this Policy to any one of the

Insured shall not be conditional upon the due observance and fulfilment of any

other Insured of the terms of this Policy and of any duties imposed upon it relating

thereto and shall not be affected by any failure in such observance or fulfilment of

any such other Insured

2.2 All the Sums Insured and Limits of Indemnity stated in the Schedule and all limits

on the Company's liability stated elsewhere in this Policy shall be the maximum

amount payable by Company in the circumstances stated in the Schedule or

elsewhere in the Policy irrespective of the number of Persons Entitled to

Indemnity under this Policy in respect of any insured Event or during any Period

of Insurance

3. Interest of the Finance Parties and the Authority

3.1 The Company acknowledges that the Finance Parties and (in respect of third

party liabilities) their respective officers directors and employees are each

additional co-insureds under this Policy arising only from the risk which is the

subject matter of this insurance and that the premium specified in this Policy

provides consideration for their being eo-insured parties

3.2 The Company acknowledges that the Authority and (in respect of third party

liabilities) its officers directors and employees are each additional co-insureds

under the sections of this Policy relating to material damage risks and third party

liability risks arising only from the risk which is the subject matter of this insurance

and that the premium specified in this Policy provides consideration for their being

eo-insured parties

4. Liability for premium

Neither the Global Agent the Finance Parties nor the Authority shall be liable for the

payment of any premium under this Policy although they may choose to pay the premium.

This shall not relieve Project Co from its obligations to pay any premium under this Policy

5. Disclosure

5.1 The Finance Parties shall have no duty of disclosure to the Company in relation to

the Policy. Nevertheless on the written request of the Company the Finance

Parties shall provide the Company with access to any relevant due diligence

report(s) commissioned by the Finance Parties relating to the Project and the


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Company shall keep such report(s) confidential and shall accept such information

without rights of recourse against the party I parties that prepared the said reports

5.2 The Company acknowledge to the Finance Parties alone that (i) they have

received adequate information in order to evaluate the risk of insuring Project Co

in respect of the risks hereby insured on the assumption that such information is

not materially misleading (ii) there is no information which has been relied on or is

required by the Company in respect of their decision to eo-insure the Finance

Parties or their directors officers employees or agents and (iii) in agreeing to enter

into this Policy they have not relied upon or taken into account any information

supplied to them by any Finance Party. The acknowledgements provided by the

Company in this clause 5.2 shall have no effect on any rights that the Company

might have had under or in relation to the Policy against any party (including

Project Co) other than the Finance Parties and the Global Agent in the absence of

such acknowledgements

5.3 Non-disclosure or misrepresentation by one Insured shall not be attributable to

any other Insured who did not actively participate in that non-disclosure or

misrepresentation. Without prejudice to the protections afforded to the Insured by

this endorsement no one Insured represents or warrants the adequacy or

accuracy of any information provided or representation made by or on behalf of

any other Insured

5.4 Subject to clause 5.5 hereof, no party other than the Authority has any authority to

make any warranty, disclosure or representation in connection with this policy on

behalf of the Authority .

5.5 Where any warranty, disclosure or representation is required from the Authority in

connection with this policy the Company will contact the Authority in writing (in

accordance with clause 15 hereof) and set out expressly the warranty, disclosure

and/or representation required within a reasonable period of time from the

Authority (regarding itself). Save as set out in such a request from the Company

to the Authority, the Authority shall have no duty to disclose any fact or matter to

the Company in connection with the policy save to the extent that for the Authority

not to disclose a fact or matter would constitute fraudulent misrepresentation

and/or fraudulent non-disclosure.

Ll B01/F6JDWL/2591505.22 Hogan Lovel!s

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Section Ill: Rights to avoid I cancel or change Policy terms

6. Non-vitiation

6.1 The Insurers agree that the policy shall not be invalidated as regards the

respective rights and interest of each Insured and that the Insurers will not seek

directly or indirectly to avoid any liability under this policy because of any act,

neglect, error or omission made by any other Insured (whether occurring before or

after the inception of the policy), including (without limitation), any failure by any

other Insured to disclose any material fact, circumstance or occurrence, any

misrepresentation by any other Insured, any breach or non-fulfilment by any other

insured whether or not any such act, neglect, error or omission, could, if known at

any time, have affected the decision of the Insurers to grant the policy, to agree to

any particular term or terms of the policy (including without limitation this

provision) and the amount in relation to this policy or to liability which might arise

thereunder.

7. Cancellation

7.1 The Company agrees that they shall not seek to cancel or suspend the

construction phases of this insurance except for (a) non payment of premium or

(b) consistent non compliance by an insured party with insurer's requirements

relating to survey or loss control or if (c) there is a breach of the Joint Code of

Practice.

7.2 The Company shall promptly notify the Global Agent and the Authority in writing in

the event of any suspension cancellation termination or non-renewal of this Policy

by the Company or by the Insured. The cover provided by this Policy shall

continue in force and unaltered for at least 30 days after written notice of such

suspension cancellation termination or non-renewal is given to the Global Agent

and the Authority. Nothing in this clause shall give the Company any right to

suspend cancel or terminate this Policy which the Company do not otherwise

have under this Policy

7.3 The Company shall promptly notify the Global Agent and the Authority in writing of

7.3.1 any default in the payment of premium and shall give the Global Agent

and the Authority at least 30 days notice in writing before cancelling this

Policy for non-payment of premium in order to give an opportunity for that

premium to be paid within the notice period. However where no premium

has been received cancellation will be effective from the date of first

inception of this policy,


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7.3.2 of any act, omission or event of which the Insurers have actual knowledge

(including the non-payment of premium) which might invalidate or render

unenforceable in whole or in part the insurance under this policy, as soon

as practicable after becoming aware of the same;

7.3.3 of any claim under this policy where the claim is in a sum in excess of

£50,000 (before deductibles).

8. Changes in cover

Prior written consent of the Global Agent and the Authority is required before any

reduction in cover or increase in excess or deductible under this Policy takes effect, but

this shall not apply to any new risks that are added to the policy. Further, in no event

shall the Company give the Global Agent and the Authority less than 30 days prior notice

in writing of any proposed reduction in cover or increase in excess or deductible under

this Policy. Nothing in this clause shall give the Company any right which they do not

otherwise have to reduce cover or increase any Insured's contribution or deductible under

this Policy

9. Amendments to Endorsement

During the term of this Policy the provisions of this endorsement may only be amended by

written agreement between Project Co the Company the Global Agent and the Authority

such amendment to be endorsed on the Policy

Section IV: Claims

1 0. Notice of claims

1 0.1 Notice of claim by the Authority or the Finance Parties or any other party entitled

to indemnity under the Policy shall in the absence of manifest error be accepted

by Company as a valid notification of claim on behalf of all other lnsureds subject

to the full terms of the Policy

11. Claim Payments I Loss Payee

Payments made in accordance with this clause 11 shall to the extent of the payment

discharge the Company's liability to pay Project Co or any other Insured

11.1 In respect of the insurance under this Policy of material damage risks only

All claim payments over £50,000 shall be paid into the Joint Insurance Account.

Claims under this or return premium shall be paid into the Joint Insurance

Account or to such other account as the Global Agent as loss payee may specify


119

in writing. The Company may at their discretion deduct overdue unpaid premium

from claims settlements but shall not set off or deduct premium that is not overdue

or any other amounts payable by the Borrower under or in relation to the Policy.

11.2 In respect of the insurance under this Policy of public liability risks only

All claim payments in respect of a third party liability shall be paid to person(s)

whose claim(s) constitute the legal liability insured against. Any return premiums

shall be paid to the Borrower Insurance Proceeds Account or such other account

as the Global Agent directs in writing

11.3 In respect of the insurance under this Policy of loss of revenue risks only

• All claim payments or return premiums shall be paid to the Joint Insurance

Account or such other account as the Global Agent directs in writing

•

12. Waiver of subrogation

The Company waive all rights of subrogation howsoever arising which they may have or

acquire against any Insured described within the appropriate Schedules arising out of any

Event in respect of which any claim is admitted and is insured hereunder for the benefit of

such Insured except against any

(i) Insured (or officer director employee agent or assign) who has caused or

contributed to such an Event or claim by fraud deliberate misrepresentation

deliberate non-disclosure or deliberate breach of Policy Condition or

(ii) Insured to the extent that their professional errors omissions or activities not

insured by this Policy have caused or contributed to an Event covered under this

Policy or

(iii) supplier or manufacturer to the extent that their errors omissions or activities not

insured by this Policy have caused or contributed to an Event covered under this

Policy or

(iv) Insured to the extent that they are entitled to Indemnity in respect of an Insured

Event falling within sub-clause 13(a)-(e) below (or would be so insured if cover in

the terms set out in this Policy had not been taken out) or

(v) in relation to losses paid under material damage and loss of revenue Sections for

the operational period any Insured (other than the Authority) who is not covered

under those Sections


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13. Primary insurance

For non-Ell covers:

The Company agrees that this insurance provides the primary cover for risks insured

under this Policy. In the event that any risk insured under this Policy is also insured under

any other policy of insurance effected by any Insured the Company agrees to indemnify

the Insured as if such other policy of insurance did not exist except in respect of

(a) excess layers of third party liability cover effected specifically for the Project

(b) any public liability claim against the Insured which exceeds the applicable limit of

indemnity under this Policy in which case the liability of the Company for

additional legal costs and expenses shall be limited to the proportion that the

applicable limit of indemnity bears to the total claim against the Insured

(c)

(d)

(e)

any claim under this Policy to which a Marine 50/50 Clause applies

any claim made under a Contingent Motor Liability extension to this Policy or

any claim relating to a loss which is insured against (or would be insured but for a

double insurance provision or similar or the application of a deductible} under

(i) any other policy specifically effected for the construction or operational

phase(s) of the Project or

(ii) a latent or inherent defects policy or engineering or mechanical

breakdown policy specifically effected for the Project or

(iii) a related Business Interruption insurance policy

For the Ell policy, the following applies:

This policy is primary except in relation to sudden and accidental pollution cover afforded

by the third party liability policy, where this policy will act in excess of any claims monies

paid by that policy.

Section V: Miscellaneous

14. Notice of Security Interest

The Company acknowledge that by an assignment contained in a debenture dated 16

October 2006 (the "Assignment") the Borrower assigned by way of security to the Finance

Parties all benefits and rights in respect of this insurance and all claims and returns of

premiums in respect thereof to which the Insured is or may at a future time become


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121

entitled. The Company confirms that they have not been notified of any other assignment

of or security interest in the Borrower's interest in this insurance

15. Notice

15.1 All notices or other communications under or in connection with the Policy will be

given by tax and post. Any such notice given by the Company will be deemed to

be given on the earlier of

15.1.1 if by tax when transmitted but only if the sender's fax machine confirms

successful transmission and

15.1.2 if by post within 2 business days of release from the relevant Company's

office .

15.2 The address and tax number of the Global Agent for all notices under or in

connection with the Policy are those notified from time to time by the Finance

Parties for this purpose to the insurance broker at the relevant time the initial

address and tax number of the Global Agent is as follows

The Global Agent: Mizuho Corporate Bank, Ud

Address: Bracken House, One Friday Street, London EC4M 9JA

Fax No: +44 207 0112 4053

Attention: Loans Agency

15.3 The address of the Authority for all notices under or in connection with the Policy

• are those notified from time to time by the Authority for this purpose to the

insurance broker at the relevant time the initial address of the Authority is as

follows

The Authority: Cornwall Council

Address: New County Hall, Treyew Road, Truro TR1 3AY, Cornwall

Attention: County Solicitor

16. General

16.1 The Insurers acknowledge that they have received consideration for their agreement to

eo-insure the Finance Parties and the Authority.

16.2 This endorsement overrides any conflicting provision in this policy.

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PART 5- Not used

•

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Ll 801 /F6JDWU2591505.22 Hogan Lovells

123

Part6

Definitions

"Revenue" is defined as the projected Unavoidable Fixed Costs and Senior Debt Service Costs

of the Contractor.

"Senior Debt Service Costs" shall mean interest and debt service costs incurred in respect of

the Senior Financing Agreements less

(a) sums which are in arrears;

(b) all sums reserved by the Contractor and which the Contractor is entitled to use to

make such payments, without breaching the Senior Financing Agreements.

• "Unavoidable Fixed Costs" should mean the fixed costs incurred by the Contractor which first

fall due for payment by the Contractor during the period of indemnity but excluding:-

•

(a) costs which could have reasonably been mitigated or avoided by the Contractor;

(b) payments to the Contractor's Associated Companies;

(c) payments which are not entirely at arm's length;

{d) payments to holders of equity in the Contractor, Subordinated Lenders and any other

financing costs other than Senior Debt Service Costs;

(e) indirect losses suffered or allegedly suffered by any person;

(f) fines, penalties or damages for unlawful acts, breaches of contract or other legal

obligations;

(g) payments the Contractor can recover under contract or in respect of which the Contractor

has a remedy against another person in respect of the same liability;

(h) payments to the extent that the Contractor has available to it

i. reserves which the Contractor can draw upon without breaching the Senior

Financing Agreement;

ii. standby or contingent facilities or funds of Senior Debt or equity which the

Contractor is entitled to have available;

(i) payments representing any profits of the Project (to the extent not already excluded in (e)

above).

Ll B01/F6JDWU2591505.22 Hogan Lovells

Documents

SCHEDULE26 REQUIRED INSURANCE - Cornwall Council€¦ · Contractors' All Risks Insurance. Coverage "All Risks" of physical loss, destruction or damage to the Insured Property from