businessowners coverage form - massagent.com · businessowners coverage form bp 00 03 07 13 ©...

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Policy Number: RLI Insurance Company

BUSINESSOWNERS COVERAGE FORM

of 57BP 00 03 07 13 © Insurance Services Office, Inc., 2012

(b) Equipment;

(4) Your personal property in apartments,rooms or common areas furnished by youas landlord;

(5) Personal property owned by you that isused to maintain or service the buildingsor structures or the premises, including:

(a) Fire extinguishing equipment;

(b) Outdoor furniture;

(c) Floor coverings; and

(d) Appliances used for refrigerating,ventilating, cooking, dishwashing orlaundering;

(6) If not covered by other insurance:

(a) Additions under construction, altera-tions and repairs to the buildings orstructures;

(b) Materials, equipment, supplies andtemporary structures, on or within 100feet of the described premises, usedfor making additions, alterations orrepairs to the buildings or structures.

b. Business Personal Property located in or onthe buildings or structures at the describedpremises or in the open (or in a vehicle) within100 feet of the buildings or structures orwithin 100 feet of the premises described inthe Declarations, whichever distance isgreater, including:

(1) Property you own that is used in yourbusiness;

(2) Property of others that is in your care,custody or control, except as otherwiseprovided in Loss Payment Property LossCondition Paragraph E.5.d.(3)(b);

(3) Tenant's improvements and better-ments. Improvements and bettermentsare fixtures, alterations, installations oradditions:

Various provisions in this policy restrict coverage. Readthe entire policy carefully to determine rights, duties andwhat is and is not covered.

Throughout this Coverage Form, the words "you" and"your" refer to the Named Insured shown in the Declara-tions. The words "we", "us" and "our" refer to the companyproviding this insurance.

In Section II – Liability, the word "insured" means any per-son or organization qualifying as such under Paragraph C.Who Is An Insured.

Other words and phrases that appear in quotation markshave special meaning. Refer to Paragraph H. PropertyDefinitions in Section I – Property and Paragraph F.Liability And Medical Expenses Definitions in Section II –Liability.

SECTION I – PROPERTY

A. Coverage

We will pay for direct physical loss of or damage toCovered Property at the premises described in theDeclarations caused by or resulting from any CoveredCause of Loss.

1. Covered Property

Covered Property includes Buildings as describedunder Paragraph a. below, Business PersonalProperty as described under Paragraph b. below,or both, depending on whether a Limit Of Insur-ance is shown in the Declarations for that type ofproperty. Regardless of whether coverage isshown in the Declarations for Buildings, BusinessPersonal Property, or both, there is no coveragefor property described under Paragraph 2.Property Not Covered.

a. Buildings, meaning the buildings and struc-tures at the premises described in the Dec-larations, including:

(1) Completed additions;

(2) Fixtures, including outdoor fixtures;

(3) Permanently installed:

(a) Machinery; and

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(a) Made a part of the building or struc-ture you occupy but do not own; and

(b) You acquired or made at your ex-pense but cannot legally remove;

(4) Leased personal property which you havea contractual responsibility to insure, un-less otherwise provided for under Para-graph 1.b.(2); and

(5) Exterior building glass, if you are a tenantand no Limit Of Insurance is shown in theDeclarations for Building property. Theglass must be owned by you or in yourcare, custody or control.

2. Property Not Covered

Covered Property does not include:

a. Aircraft, automobiles, motortrucks andother vehicles subject to motor vehicleregistration;

b. "Money" or "securities" except as pro-vided in the:

(1) Money And Securities OptionalCoverage; or

(2) Employee Dishonesty OptionalCoverage;

c. Contraband, or property in the course ofillegal transportation or trade;

d. Land (including land on which theproperty is located), water, growing cropsor lawns (other than lawns which are partof a vegetated roof);

e. Outdoor fences, radio or televisionantennas (including satellite dishes) andtheir lead-in wiring, masts or towers,signs (other than signs attached tobuildings), trees, shrubs or plants (otherthan trees, shrubs or plants which arepart of a vegetated roof), all except asprovided in the:

(1) Outdoor Property Coverage Exten-sion; or

(2) Outdoor Signs Optional Coverage;

f. Watercraft (including motors, equipmentand accessories) while afloat;

g. Accounts, bills, food stamps, other evidencesof debt, accounts receivable or "valuablepapers and records"; except as otherwiseprovided in this policy;

h. "Computer(s)" which are permanently in-stalled or designed to be permanently in-stalled in any aircraft, watercraft, motortruckor other vehicle subject to motor vehicleregistration. This paragraph does not apply to"computer(s)" while held as "stock";

i. "Electronic data", except as provided underAdditional Coverages – Electronic Data. ThisParagraph i. does not apply to your "stock" ofprepackaged software or to "electronic data"which is integrated in and operates or controlsthe building's elevator, lighting, heating,ventilation, air conditioning or security system;or

j. Animals, unless owned by others andboarded by you, or if owned by you, only as"stock" while inside of buildings.

3. Covered Causes Of Loss

Direct physical loss unless the loss is excluded orlimited under Section I – Property.

4. Limitations

a. We will not pay for loss of or damage to:

(1) Steam boilers, steam pipes, steam en-gines or steam turbines caused by orresulting from any condition or eventinside such equipment. But we will pay forloss of or damage to such equipmentcaused by or resulting from an explosionof gases or fuel within the furnace of anyfired vessel or within the flues orpassages through which the gases ofcombustion pass.

(2) Hot water boilers or other water heatingequipment caused by or resulting fromany condition or event inside such boilersor equipment, other than an explosion.

(3) Property that is missing, where the onlyevidence of the loss or damage is ashortage disclosed on taking inventory, orother instances where there is no physicalevidence to show what happened to theproperty. This limitation does not apply tothe Optional Coverage for Money andSecurities.

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(4) Property that has been transferred to aperson or to a place outside the describedpremises on the basis of unauthorizedinstructions.

(5) The interior of any building or structure, orto personal property in the building orstructure, caused by or resulting fromrain, snow, sleet, ice, sand or dust,whether driven by wind or not, unless:

(a) The building or structure first sustainsdamage by a Covered Cause of Lossto its roof or walls through which therain, snow, sleet, ice, sand or dustenters; or

(b) The loss or damage is caused by orresults from thawing of snow, sleet orice on the building or structure.

(6) Lawns, trees, shrubs or plants which arepart of a vegetated roof, caused by orresulting from:

(a) Dampness or dryness of atmosphereor of soil supporting the vegetation;

(b) Changes in or extremes oftemperature;

(c) Disease;

(d) Frost or hail; or

(e) Rain, snow, ice or sleet.

b. We will not pay for loss of or damage to thefollowing types of property unless caused bythe "specified causes of loss" or buildingglass breakage:

(1) Animals, and then only if they are killed ortheir destruction is made necessary.

(2) Fragile articles such as glassware, statu-ary, marble, chinaware and porcelain, ifbroken. This restriction does not apply to:

(a) Glass that is part of the exterior orinterior of a building or structure;

(b) Containers of property held for sale;or

(c) Photographic or scientific instrumentlenses.

c. For loss or damage by theft, the followingtypes of property are covered only up to thelimits shown (unless a higher Limit Of Insur-ance is shown in the Declarations):

(1) $2,500 for furs, fur garments and gar-ments trimmed with fur.

(2) $2,500 for jewelry, watches, watch move-ments, jewels, pearls, precious andsemiprecious stones, bullion, gold, silver,platinum and other precious alloys ormetals. This limit does not apply tojewelry and watches worth $100 or lessper item.

(3) $2,500 for patterns, dies, molds andforms.

5. Additional Coverages

a. Debris Removal

(1) Subject to Paragraphs (2), (3) and (4), wewill pay your expense to remove debris ofCovered Property and other debris that ison the described premises, when suchdebris is caused by or results from a Cov-ered Cause of Loss that occurs during thepolicy period. The expenses will be paidonly if they are reported to us in writingwithin 180 days of the date of directphysical loss or damage.

(2) Debris Removal does not apply to coststo:

(a) Remove debris of property of yoursthat is not insured under this policy,or property in your possession that isnot Covered Property;

(b) Remove debris of property owned byor leased to the landlord of the build-ing where your described premisesare located, unless you have acontractual responsibility to insuresuch property and it is insured underthis policy;

(c) Remove any property that is PropertyNot Covered, including property ad-dressed under the Outdoor PropertyCoverage Extension;

(d) Remove property of others of a typethat would not be Covered Propertyunder this policy;

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(e) Remove deposits of mud or earthfrom the grounds of the describedpremises;

(f) Extract "pollutants" from land orwater; or

(g) Remove, restore or replace pollutedland or water.

(3) Subject to the exceptions in Paragraph(4), the following provisions apply:

(a) The most that we will pay for the totalof direct physical loss or damage plusdebris removal expense is the Limit ofInsurance applicable to the CoveredProperty that has sustained loss ordamage.

(b) Subject to Paragraph (3)(a) above,the amount we will pay for debrisremoval expense is limited to 25% ofthe sum of the deductible plus theamount that we pay for direct physicalloss or damage to the Covered Prop-erty that has sustained loss or dam-age. However, if no Covered Propertyhas sustained direct physical loss ordamage, the most we will pay forremoval of debris of other property (ifsuch removal is covered under thisAdditional Coverage) is $5,000 ateach location.

(4) We will pay up to an additional $25,000for debris removal expense, for eachlocation, in any one occurrence of physi-cal loss or damage to Covered Property,if one or both of the following circum-stances apply:

(a) The total of the actual debris removalexpense plus the amount we pay fordirect physical loss or damage ex-ceeds the Limit of Insurance on theCovered Property that has sustainedloss or damage.

(b) The actual debris removal expenseexceeds 25% of the sum of thedeductible plus the amount that wepay for direct physical loss or damageto the Covered Property that hassustained loss or damage.

Therefore, if Paragraphs (4)(a) and/or(4)(b) apply, our total payment for directphysical loss or damage and debris re-moval expense may reach but will neverexceed the Limit of Insurance on theCovered Property that has sustained lossor damage, plus $25,000.

(5) Examples

Example 1

Limit of Insurance $ 90,000Amount of Deductible $ 500Amount of Loss $ 50,000Amount of Loss Payable $ 49,500

($50,000 – $500)Debris Removal Expense $ 10,000Debris Removal Expense

Payable $ 10,000($10,000 is 20% of $50,000)

The debris removal expense is less than25% of the sum of the loss payable plusthe deductible. The sum of the loss pay-able and the debris removal expense($49,500 + $10,000 = $59,500) is lessthan the Limit of Insurance. Therefore,the full amount of debris removal expenseis payable in accordance with the termsof Paragraph (3).

Example 2

Limit of Insurance $ 90,000Amount of Deductible $ 500Amount of Loss $ 80,000Amount of Loss Payable $ 79,500

($80,000 – $500)Debris Removal Expense $ 40,000Debris Removal Expense Payable

Basic Amount $ 10,500Additional Amount $ 25,000

The basic amount payable for debrisremoval expense under the terms ofParagraph (3) is calculated as follows:$80,000 ($79,500 + $500) x .25 =$20,000; capped at $10,500. The capapplies because the sum of the loss pay-able ($79,500) and the basic amountpayable for debris removal expense($10,500) cannot exceed the Limit ofInsurance ($90,000).

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The additional amount payable for debrisremoval expense is provided in accord-ance with the terms of Paragraph (4),because the debris removal expense($40,000) exceeds 25% of the losspayable plus the deductible ($40,000 is50% of $80,000), and because the sum ofthe loss payable and debris removalexpense ($79,500 + $40,000 = $119,500)would exceed the Limit of Insurance($90,000). The additional amount of cov-ered debris removal expense is $25,000,the maximum payable under Paragraph(4). Thus, the total payable for debrisremoval expense in this example is$35,500; $4,500 of the debris removalexpense is not covered.

b. Preservation Of Property

If it is necessary to move Covered Propertyfrom the described premises to preserve itfrom loss or damage by a Covered Cause ofLoss, we will pay for any direct physical lossof or damage to that property:

(1) While it is being moved or while tempo-rarily stored at another location; and

(2) Only if the loss or damage occurs within30 days after the property is first moved.

c. Fire Department Service Charge

When the fire department is called to save orprotect Covered Property from a CoveredCause of Loss, we will pay up to $2,500 forservice at each premises described in theDeclarations, unless a different limit is shownin the Declarations. Such limit is the most wewill pay regardless of the number of re-sponding fire departments or fire units, andregardless of the number or type of servicesperformed.

This Additional Coverage applies to yourliability for fire department service charges:

(1) Assumed by contract or agreement priorto loss; or

(2) Required by local ordinance.

d. Collapse

The coverage provided under this AdditionalCoverage – Collapse applies only to anabrupt collapse as described and limited inParagraphs d.(1) through d.(7).

(1) For the purpose of this Additional Cover-age – Collapse, abrupt collapse meansan abrupt falling down or caving in of abuilding or any part of a building with theresult that the building or part of thebuilding cannot be occupied for itsintended purpose.

(2) We will pay for direct physical loss ordamage to Covered Property, caused byabrupt collapse of a building or any partof a building that is insured under thispolicy or that contains Covered Propertyinsured under this policy, if such collapseis caused by one or more of the following:

(a) Building decay that is hidden fromview, unless the presence of suchdecay is known to an insured prior tocollapse;

(b) Insect or vermin damage that is hid-den from view, unless the presenceof such damage is known to aninsured prior to collapse;

(c) Use of defective material or methodsin construction, remodeling or renova-tion if the abrupt collapse occursduring the course of the construction,remodeling or renovation.

(d) Use of defective material or methodsin construction, remodeling or renova-tion if the abrupt collapse occurs afterthe construction, remodeling or reno-vation is complete, but only if thecollapse is caused in part by:

(i) A cause of loss listed in Para-graph (2)(a) or (2)(b);

(ii) One or more of the "specifiedcauses of loss";

(iii) Breakage of building glass;

(iv) Weight of people or personalproperty; or

(v) Weight of rain that collects on aroof.

(3) This Additional Coverage – Collapse doesnot apply to:

(a) A building or any part of a buildingthat is in danger of falling down orcaving in;

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(b) A part of a building that is standing,even if it has separated from anotherpart of the building; or

(c) A building that is standing or any partof a building that is standing, even if itshows evidence of cracking, bulging,sagging, bending, leaning, settling,shrinkage or expansion.

(4) With respect to the following property:

(a) Awnings;

(b) Gutters and downspouts;

(c) Yard fixtures;

(d) Outdoor swimming pools;

(e) Piers, wharves and docks;

(f) Beach or diving platforms orappurtenances;

(g) Retaining walls; and

(h) Walks, roadways and other pavedsurfaces;

if an abrupt collapse is caused by a causeof loss listed in Paragraphs (2)(a) through(2)(d), we will pay for loss or damage tothat property only if such loss or damageis a direct result of the abrupt collapse ofa building insured under this policy andthe property is Covered Property underthis policy.

(5) If personal property abruptly falls down orcaves in and such collapse is not theresult of abrupt collapse of a building, wewill pay for loss or damage to CoveredProperty caused by such collapse ofpersonal property only if:

(a) The collapse of personal propertywas caused by a cause of loss listedin Paragraphs (2)(a) through (2)(d) ofthis Additional Coverage;

(b) The personal property which col-lapses is inside a building; and

(c) The property which collapses is not ofa kind listed in Paragraph (4), regard-less of whether that kind of propertyis considered to be personal propertyor real property.

The coverage stated in this Paragraph (5)does not apply to personal property ifmarring and/or scratching is the onlydamage to that personal property causedby the collapse.

(6) This Additional Coverage – Collapse doesnot apply to personal property that hasnot abruptly fallen down or caved in, evenif the personal property shows evidenceof cracking, bulging, sagging, bending,leaning, settling, shrinkage or expansion.

(7) This Additional Coverage – Collapse willnot increase the Limits of Insuranceprovided in this policy.

(8) The term Covered Cause of Loss in-cludes the Additional Coverage – Col-lapse as described and limited inParagraphs d.(1) through d.(7).

e. Water Damage, Other Liquids, Powder OrMolten Material Damage

If loss or damage caused by or resulting fromcovered water or other liquid, powder ormolten material occurs, we will also pay thecost to tear out and replace any part of thebuilding or structure to repair damage to thesystem or appliance from which the water orother substance escapes.

We will not pay the cost to repair any defectthat caused the loss or damage, but we willpay the cost to repair or replace damagedparts of fire extinguishing equipment if thedamage:

(1) Results in discharge of any substancefrom an automatic fire protection system;or

(2) Is directly caused by freezing.

f. Business Income

(1) Business Income

(a) We will pay for the actual loss ofBusiness Income you sustain due tothe necessary suspension of your"operations" during the "period ofrestoration". The suspension must becaused by direct physical loss of ordamage to property at the describedpremises. The loss or damage must

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be caused by or result from a Cov-ered Cause of Loss. With respect toloss of or damage to personal prop-erty in the open or personal propertyin a vehicle, the described premisesinclude the area within 100 feet ofsuch premises.

With respect to the requirements setforth in the preceding paragraph, ifyou occupy only part of a building,your premises mean:

(i) The portion of the building whichyou rent, lease or occupy;

(ii) The area within 100 feet of thebuilding or within 100 feet of thepremises described in the Decla-rations, whichever distance isgreater (with respect to loss of ordamage to personal property inthe open or personal property in avehicle); and

(iii) Any area within the building or atthe described premises, if thatarea services, or is used to gainaccess to, the portion of thebuilding which you rent, lease oroccupy.

(b) We will only pay for loss of BusinessIncome that you sustain during the"period of restoration" and that occurswithin 12 consecutive months afterthe date of direct physical loss ordamage. We will only pay for ordinarypayroll expenses for 60 days follow-ing the date of direct physical loss ordamage, unless a greater number ofdays is shown in the Declarations.

(c) Business Income means the:

(i) Net Income (Net Profit or Lossbefore income taxes) that wouldhave been earned or incurred ifno physical loss or damage hadoccurred, but not including anyNet Income that would likely havebeen earned as a result of an in-crease in the volume of businessdue to favorable business condi-tions caused by the impact of theCovered Cause of Loss on custo-mers or on other businesses; and

(ii) Continuing normal operatingexpenses incurred, includingpayroll.

(d) Ordinary payroll expenses:

(i) Means payroll expenses for allyour employees except:

i. Officers;

ii. Executives;

iii. Department Managers;

iv. Employees under contract;and

v. Additional Exemptions shownin the Declarations as:

Job Classifications; or

Employees.

(ii) Include:

i. Payroll;

ii. Employee benefits, if directlyrelated to payroll;

iii. FICA payments you pay;

iv. Union dues you pay; and

v. Workers' compensationpremiums.

(2) Extended Business Income

(a) If the necessary suspension of your"operations" produces a Business In-come loss payable under this policy,we will pay for the actual loss ofBusiness Income you incur during theperiod that:

(i) Begins on the date propertyexcept finished stock is actuallyrepaired, rebuilt or replaced and"operations" are resumed; and

(ii) Ends on the earlier of:

i. The date you could restoreyour "operations", with rea-sonable speed, to the level

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which would generate theBusiness Income amount thatwould have existed if no di-rect physical loss or damagehad occurred; or

ii. 60 consecutive days after thedate determined in Para-graph (a)(i) above, unless agreater number of consecu-tive days is shown in theDeclarations.

However, Extended Business Incomedoes not apply to loss of BusinessIncome incurred as a result of un-favorable business conditions causedby the impact of the Covered Causeof Loss in the area where thedescribed premises are located.

(b) Loss of Business Income must becaused by direct physical loss ordamage at the described premisescaused by or resulting from anyCovered Cause of Loss.

(3) With respect to the coverage provided inthis Additional Coverage, suspensionmeans:

(a) The partial slowdown or completecessation of your business activities;or

(b) That a part or all of the describedpremises is rendered untenantable, ifcoverage for Business Incomeapplies.

(4) This Additional Coverage is not subject tothe Limits of Insurance of Section I –Property.

g. Extra Expense

(1) We will pay necessary Extra Expense youincur during the "period of restoration"that you would not have incurred if therehad been no direct physical loss or dam-age to property at the described prem-ises. The loss or damage must be causedby or result from a Covered Cause ofLoss. With respect to loss of or damageto personal property in the open orpersonal property in a vehicle, the de-scribed premises include the area within100 feet of such premises.

With respect to the requirements set forthin the preceding paragraph, if you occupyonly part of a building, your premisesmean:

(a) The portion of the building which yourent, lease or occupy;

(b) The area within 100 feet of the build-ing or within 100 feet of the premisesdescribed in the Declarations, which-ever distance is greater (with respectto loss of or damage to personalproperty in the open or personalproperty in a vehicle); and

(c) Any area within the building or at thedescribed premises, if that areaservices, or is used to gain access to,the portion of the building which yourent, lease or occupy.

(2) Extra Expense means expense incurred:

(a) To avoid or minimize the suspen-sion of business and to continue"operations":

(i) At the described premises; or

(ii) At replacement premises or attemporary locations, including re-location expenses, and costs toequip and operate the replace-ment or temporary locations.

(b) To minimize the suspension ofbusiness if you cannot continue"operations".

(c) To:

(i) Repair or replace any property; or

(ii) Research, replace or restore thelost information on damaged"valuable papers and records";

to the extent it reduces the amount ofloss that otherwise would have beenpayable under this Additional Cov-erage or Additional Coverage f. Busi-ness Income.

(3) With respect to the coverage provided inthis Additional Coverage, suspensionmeans:

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(a) The partial slowdown or completecessation of your business activities;or

(b) That a part or all of the describedpremises is rendered untenantable, ifcoverage for Business Incomeapplies.

(4) We will only pay for Extra Expense thatoccurs within 12 consecutive months afterthe date of direct physical loss or dam-age. This Additional Coverage is not sub-ject to the Limits of Insurance of SectionI – Property.

h. Pollutant Clean-up And Removal

We will pay your expense to extract "pol-lutants" from land or water at the describedpremises if the discharge, dispersal, seepage,migration, release or escape of the "pol-lutants" is caused by or results from aCovered Cause of Loss that occurs during thepolicy period. The expenses will be paid onlyif they are reported to us in writing within 180days of the date on which the Covered Causeof Loss occurs.

This Additional Coverage does not apply tocosts to test for, monitor or assess the exist-ence, concentration or effects of "pollutants".But we will pay for testing which is performedin the course of extracting the "pollutants"from the land or water.

The most we will pay for each location underthis Additional Coverage is $10,000 for thesum of all such expenses arising out ofCovered Causes of Loss occurring duringeach separate 12-month period of this policy.

i. Civil Authority

When a Covered Cause of Loss causesdamage to property other than property at thedescribed premises, we will pay for the actualloss of Business Income you sustain andnecessary Extra Expense caused by action ofcivil authority that prohibits access to thedescribed premises, provided that both of thefollowing apply:

(1) Access to the area immediately surround-ing the damaged property is prohibited bycivil authority as a result of the damage,

and the described premises are withinthat area but are not more than one milefrom the damaged property; and

(2) The action of civil authority is taken in re-sponse to dangerous physical conditionsresulting from the damage or continuationof the Covered Cause of Loss thatcaused the damage, or the action is takento enable a civil authority to have unim-peded access to the damaged property.

Civil Authority Coverage for Business Incomewill begin 72 hours after the time of the firstaction of civil authority that prohibits access tothe described premises and will apply for aperiod of up to four consecutive weeks fromthe date on which such coverage began.

Civil Authority Coverage for necessary ExtraExpense will begin immediately after the timeof the first action of civil authority thatprohibits access to the described premisesand will end:

(1) Four consecutive weeks after the date ofthat action; or

(2) When your Civil Authority Coverage forBusiness Income ends;

whichever is later.

The definitions of Business Income and ExtraExpense contained in the Business Incomeand Extra Expense Additional Coverages alsoapply to this Civil Authority Additional Cover-age. The Civil Authority Additional Coverageis not subject to the Limits of Insurance ofSection I – Property.

j. Money Orders And "Counterfeit Money"

We will pay for loss resulting directly fromyour having accepted in good faith, in ex-change for merchandise, "money" or services:

(1) Money orders issued by any post office,express company or bank that are notpaid upon presentation; or

(2) "Counterfeit money" that is acquiredduring the regular course of business.

The most we will pay for any loss under thisAdditional Coverage is $1,000.

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k. Forgery Or Alteration

(1) We will pay for loss resulting directly fromforgery or alteration of any check, draft,promissory note, bill of exchange orsimilar written promise of payment in"money" that you or your agent hasissued, or that was issued by someonewho impersonates you or your agent.

(2) If you are sued for refusing to pay thecheck, draft, promissory note, bill ofexchange or similar written promise ofpayment in "money", on the basis that ithas been forged or altered, and you haveour written consent to defend against thesuit, we will pay for any reasonable legalexpenses that you incur in that defense.

(3) For the purpose of this coverage, checkincludes a substitute check as defined inthe Check Clearing for the 21st CenturyAct and will be treated the same as theoriginal it replaced.

(4) The most we will pay for any loss, in-cluding legal expenses, under this Addi-tional Coverage is $2,500, unless ahigher Limit Of Insurance is shown in theDeclarations.

l. Increased Cost Of Construction

(1) This Additional Coverage applies only tobuildings insured on a replacement costbasis.

(2) In the event of damage by a CoveredCause of Loss to a building that is Cov-ered Property, we will pay the increasedcosts incurred to comply with the min-imum standards of an ordinance or law inthe course of repair, rebuilding or replace-ment of damaged parts of that property,subject to the limitations stated in Para-graphs (3) through (9) of this AdditionalCoverage.

(3) The ordinance or law referred to in Para-graph (2) of this Additional Coverage isan ordinance or law that regulates theconstruction or repair of buildings orestablishes zoning or land use require-ments at the described premises and is inforce at the time of loss.

(4) Under this Additional Coverage, we willnot pay any costs due to an ordinance orlaw that:

(a) You were required to comply withbefore the loss, even when the build-ing was undamaged; and

(b) You failed to comply with.

(5) Under this Additional Coverage, we willnot pay for:

(a) The enforcement of or compliancewith any ordinance or law whichrequires demolition, repair, replace-ment, reconstruction, remodeling orremediation of property due tocontamination by "pollutants" or dueto the presence, growth, proliferation,spread or any activity of "fungi", wetrot or dry rot; or

(b) Any costs associated with theenforcement of or compliance with anordinance or law which requires anyinsured or others to test for, monitor,clean up, remove, contain, treat,detoxify or neutralize, or in any wayrespond to, or assess the effects of"pollutants", "fungi", wet rot or dry rot.

(6) The most we will pay under this Addition-al Coverage, for each described buildinginsured under Section I – Property, is$10,000. If a damaged building(s) is cov-ered under a blanket Limit of Insurancewhich applies to more than one buildingor item of property, then the most we willpay under this Additional Coverage, foreach damaged building, is $10,000.

The amount payable under this AdditionalCoverage is additional insurance.

(7) With respect to this Additional Coverage:

(a) We will not pay for the IncreasedCost of Construction:

(i) Until the property is actuallyrepaired or replaced, at the sameor another premises; and

(ii) Unless the repair or replacementis made as soon as reasonablypossible after the loss or damage,

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not to exceed two years. We mayextend this period in writingduring the two years.

(b) If the building is repaired or replacedat the same premises, or if you electto rebuild at another premises, themost we will pay for the IncreasedCost of Construction is the increasedcost of construction at the samepremises.

(c) If the ordinance or law requires relo-cation to another premises, the mostwe will pay for the Increased Cost ofConstruction is the increased cost ofconstruction at the new premises.

(8) This Additional Coverage is not subject tothe terms of the Ordinance Or Law Ex-clusion, to the extent that such exclusionwould conflict with the provisions of thisAdditional Coverage.

(9) The costs addressed in the Loss PaymentProperty Loss Condition in Section I –Property do not include the increasedcost attributable to enforcement of orcompliance with an ordinance or law. Theamount payable under this AdditionalCoverage, as stated in Paragraph (6) ofthis Additional Coverage, is not subject tosuch limitation.

m. Business Income From DependentProperties

(1) We will pay for the actual loss of Busi-ness Income you sustain due to physicalloss or damage at the premises of adependent property or secondary de-pendent property caused by or resultingfrom any Covered Cause of Loss.

However, this Additional Coverage doesnot apply when the only loss at thepremises of a dependent property orsecondary dependent property is loss ordamage to "electronic data", including de-struction or corruption of "electronic data".If the dependent property or secondarydependent property sustains loss ordamage to "electronic data" and otherproperty, coverage under this AdditionalCoverage will not continue once the otherproperty is repaired, rebuilt or replaced.

The most we will pay under this Addition-al Coverage is $5,000 unless a higherLimit Of Insurance is indicated in theDeclarations.

(2) We will reduce the amount of your Busi-ness Income loss, other than ExtraExpense, to the extent you can resume"operations", in whole or in part, by usingany other available:

(a) Source of materials; or

(b) Outlet for your products.

(3) If you do not resume "operations", or donot resume "operations" as quickly aspossible, we will pay based on the lengthof time it would have taken to resume"operations" as quickly as possible.

(4) Dependent property means propertyowned by others whom you depend on to:

(a) Deliver materials or services to you,or to others for your account. Butservices does not mean water supplyservices, wastewater removal serv-ices, communication supply servicesor power supply services;

(b) Accept your products or services;

(c) Manufacture your products for deliv-ery to your customers under contractfor sale; or

(d) Attract customers to your business.

The dependent property must be locatedin the coverage territory of this policy.

(5) Secondary dependent property means anentity which is not owned or operated bya dependent property and which;

(a) Delivers materials or services to adependent property, which in turn areused by the dependent property inproviding materials or services to you;or

(b) Accepts materials or services from adependent property, which in turnaccepts your materials or services.

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The expiration date of this policy will notreduce the Business Income coverageperiod.

(8) The definition of Business Income con-tained in the Business Income AdditionalCoverage also applies to this BusinessIncome From Dependent Properties Addi-tional Coverage.

n. Glass Expenses

(1) We will pay for expenses incurred to putup temporary plates or board up openingsif repair or replacement of damaged glassis delayed.

(2) We will pay for expenses incurred to re-move or replace obstructions when re-pairing or replacing glass that is part of abuilding. This does not include removingor replacing window displays.

o. Fire Extinguisher Systems RechargeExpense

(1) We will pay:

(a) The cost of recharging or replacing,whichever is less, your fire extin-guishers and fire extinguishing sys-tems (including hydrostatic testing ifneeded) if they are discharged on orwithin 100 feet of the describedpremises; and

(b) For loss or damage to CoveredProperty if such loss or damage is theresult of an accidental discharge ofchemicals from a fire extinguisher ora fire extinguishing system.

(2) No coverage will apply if the fire extin-guishing system is discharged duringinstallation or testing.

(3) The most we will pay under this Addi-tional Coverage is $5,000 in any oneoccurrence.

p. Electronic Data

(1) Subject to the provisions of this AdditionalCoverage, we will pay for the cost toreplace or restore "electronic data" whichhas been destroyed or corrupted by aCovered Cause of Loss. To the extent

A road, bridge, tunnel, waterway, airfield,pipeline or any other similar area orstructure is not a secondary dependentproperty.

Any property which delivers any of thefollowing services is not a secondarydependent property with respect to suchservices:

(i) Water supply services;

(ii) Wastewater removal services;

(iii) Communication supply services;or

(iv) Power supply services.

The secondary dependent property mustbe located in the coverage territory of thispolicy.

(6) The coverage period for Business Incomeunder this Additional Coverage:

(a) Begins 72 hours after the time of di-rect physical loss or damage causedby or resulting from any CoveredCause of Loss at the premises of thedependent property or secondarydependent property; and

(b) Ends on the date when the propertyat the premises of the dependentproperty or secondary dependentproperty should be repaired, rebuilt orreplaced with reasonable speed andsimilar quality.

(7) The Business Income coverage period,as stated in Paragraph (6), does not in-clude any increased period required dueto the enforcement of or compliance withany ordinance or law that:

(a) Regulates the construction, use orrepair, or requires the tearing down ofany property; or

(b) Requires any insured or others to testfor, monitor, clean up, remove, con-tain, treat, detoxify or neutralize, or inany way respond to, or assess theeffects of "pollutants".

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of "operations" caused by an interruptionin computer operations due to destructionor corruption of "electronic data" due to aCovered Cause of Loss.

(2) With respect to the coverage providedunder this Additional Coverage, the Cov-ered Causes of Loss are subject to thefollowing:

(a) Coverage under this Additional Cov-erage – Interruption Of ComputerOperations is limited to the "specifiedcauses of loss" and Collapse.

(b) If the Businessowners CoverageForm is endorsed to add a CoveredCause of Loss, the additional Cov-ered Cause of Loss does not apply tothe coverage provided under thisAdditional Coverage.

(c) The Covered Causes of Loss includea computer virus, harmful code orsimilar instruction introduced into orenacted on a computer system (in-cluding "electronic data") or a networkto which it is connected, designed todamage or destroy any part of thesystem or disrupt its normal opera-tion. But there is no coverage for aninterruption related to manipulation ofa computer system (including "elec-tronic data") by any employee, includ-ing a temporary or leased employee,or by an entity retained by you, or foryou, to inspect, design, install, modi-fy, maintain, repair or replace thatsystem.

(3) The most we will pay under this Addition-al Coverage – Interruption Of ComputerOperations for all loss sustained andexpense incurred in any one policy year,regardless of the number of interruptionsor the number of premises, locations orcomputer systems involved, is $10,000unless a higher Limit Of Insurance isshown in the Declarations. If loss pay-ment relating to the first interruption doesnot exhaust this amount, then the balanceis available for loss or expense sustainedor incurred as a result of subsequentinterruptions in that policy year. A balanceremaining at the end of a policy year doesnot increase the amount of insurance inthe next policy year. With respect to anyinterruption which begins in one policy

that "electronic data" is not replaced or re-stored, the loss will be valued at the costof replacement of the media on which the"electronic data" was stored, with blankmedia of substantially identical type.

(2) The Covered Causes of Loss applicableto Business Personal Property include acomputer virus, harmful code or similarinstruction introduced into or enacted ona computer system (including "electronicdata") or a network to which it is con-nected, designed to damage or destroyany part of the system or disrupt its nor-mal operation. But there is no coveragefor loss or damage caused by or resultingfrom manipulation of a computer system(including "electronic data") by any em-ployee, including a temporary or leasedemployee, or by an entity retained by you,or for you, to inspect, design, install,modify, maintain, repair or replace thatsystem.

(3) The most we will pay under this Addition-al Coverage – Electronic Data for all lossor damage sustained in any one policyyear, regardless of the number of occur-rences of loss or damage or the numberof premises, locations or computer sys-tems involved, is $10,000, unless a high-er Limit Of Insurance is shown in the Dec-larations. If loss payment on the first oc-currence does not exhaust this amount,then the balance is available for subse-quent loss or damage sustained in, butnot after, that policy year. With respect toan occurrence which begins in one policyyear and continues or results in additionalloss or damage in a subsequent policyyear(s), all loss or damage is deemed tobe sustained in the policy year in whichthe occurrence began.

(4) This Additional Coverage does not applyto your "stock" of prepackaged software,or to "electronic data" which is integratedin and operates or controls a building'selevator, lighting, heating, ventilation, airconditioning or security system.

q. Interruption Of Computer Operations

(1) Subject to all provisions of this AdditionalCoverage, you may extend the insurancethat applies to Business Income andExtra Expense to apply to a suspension

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(a) Direct physical loss or damage toCovered Property caused by "fungi",wet rot or dry rot, including the cost ofremoval of the "fungi", wet rot or dryrot;

(b) The cost to tear out and replace anypart of the building or other propertyas needed to gain access to the"fungi", wet rot or dry rot; and

(c) The cost of testing performed afterremoval, repair, replacement or resto-ration of the damaged property iscompleted, provided there is a reasonto believe that "fungi", wet rot or dryrot is present.

(3) The coverage described under thisLimited Coverage is limited to $15,000.Regardless of the number of claims, thislimit is the most we will pay for the total ofall loss or damage arising out of all occur-rences of "specified causes of loss" (otherthan fire or lightning) which take place ina 12-month period (starting with the be-ginning of the present annual policy peri-od). With respect to a particular occur-rence of loss which results in "fungi", wetrot or dry rot, we will not pay more thanthe total of $15,000 even if the "fungi",wet rot or dry rot continues to be presentor active, or recurs, in a later policyperiod.

(4) The coverage provided under this LimitedCoverage does not increase the applica-ble Limit of Insurance on any CoveredProperty. If a particular occurrence resultsin loss or damage by "fungi", wet rot ordry rot, and other loss or damage, we willnot pay more, for the total of all loss ordamage, than the applicable Limit ofInsurance on the affected CoveredProperty.

If there is covered loss or damage toCovered Property, not caused by "fungi",wet rot or dry rot, loss payment will not belimited by the terms of this LimitedCoverage, except to the extent that"fungi", wet rot or dry rot causes anincrease in the loss. Any such increase inthe loss will be subject to the terms of thisLimited Coverage.

year and continues or results in additionalloss or expense in a subsequent policyyear(s), all loss and expense is deemedto be sustained or incurred in the policyyear in which the interruption began.

(4) This Additional Coverage – InterruptionOf Computer Operations does not applyto loss sustained or expense incurredafter the end of the "period of restoration",even if the amount of insurance stated in(3) above has not been exhausted.

(5) Coverage for Business Income does notapply when a suspension of "operations"is caused by destruction or corruption of"electronic data", or any loss or damageto "electronic data", except as providedunder Paragraphs (1) through (4) of thisAdditional Coverage.

(6) Coverage for Extra Expense does notapply when action is taken to avoid orminimize a suspension of "operations"caused by destruction or corruption of"electronic data", or any loss or damageto "electronic data", except as providedunder Paragraphs (1) through (4) of thisAdditional Coverage.

(7) This Additional Coverage does not applywhen loss or damage to "electronic data"involves only "electronic data" which isintegrated in and operates or controls abuilding's elevator, lighting, heating, venti-lation, air conditioning or security system.

r. Limited Coverage For "Fungi", Wet Rot OrDry Rot

(1) The coverage described in Paragraphsr.(2) and r.(6) only applies when the"fungi", wet rot or dry rot is the result of a"specified cause of loss" other than fire orlightning that occurs during the policyperiod and only if all reasonable meanswere used to save and preserve theproperty from further damage at the timeof and after that occurrence.

This Additional Coverage does not applyto lawns, trees, shrubs or plants whichare part of a vegetated roof.

(2) We will pay for loss or damage by "fungi",wet rot or dry rot. As used in this LimitedCoverage, the term loss or damagemeans:

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(a) Your new buildings while being builton the described premises; and

(b) Buildings you acquire at premisesother than the one described, in-tended for:

(i) Similar use as the building de-scribed in the Declarations; or

(ii) Use as a warehouse.

The most we will pay for loss or damageunder this Extension is $250,000 at eachbuilding.

(2) Business Personal Property

If this policy covers Business PersonalProperty, you may extend that insuranceto apply to:

(a) Business Personal Property, includ-ing such property that you newly ac-quire, at any location you acquire; or

(b) Business Personal Property, includ-ing such property that you newlyacquire, located at your newlyconstructed or acquired buildingsat the location described in theDeclarations.

This Extension does not apply to personalproperty that you temporarily acquire inthe course of installing or performing workon such property or your wholesaleactivities.

The most we will pay for loss or damageunder this Extension is $100,000 at eachbuilding.

(3) Period Of Coverage

With respect to insurance provided underthis Coverage Extension for Newly Ac-quired Or Constructed Property, coveragewill end when any of the following firstoccurs:

(a) This policy expires;

(b) 30 days expire after you acquire theproperty or begin construction of thatpart of the building that would qualifyas Covered Property; or

(5) The terms of this Limited Coverage donot increase or reduce the coverageprovided under the Water Damage, OtherLiquids, Powder Or Molten Material Dam-age or Collapse Additional Coverages.

(6) The following applies only if BusinessIncome and/or Extra Expense Coverageapplies to the described premises andonly if the suspension of "operations"satisfies all the terms and conditions ofthe applicable Business Income and/orExtra Expense Additional Coverage:

(a) If the loss which resulted in "fungi",wet rot or dry rot does not in itselfnecessitate a suspension of "opera-tions", but such suspension is neces-sary due to loss or damage toproperty caused by "fungi", wet rot ordry rot, then our payment under theBusiness Income and/or Extra Ex-pense Additional Coverages is limitedto the amount of loss and/or expensesustained in a period of not more than30 days. The days need not beconsecutive.

(b) If a covered suspension of "opera-tions" was caused by loss or damageother than "fungi", wet rot or dry rot,but remediation of "fungi", wet rot ordry rot prolongs the "period of resto-ration", we will pay for loss and/orexpense sustained during the delay(regardless of when such a delayoccurs during the "period of restora-tion"), but such coverage is limited to30 days. The days need not beconsecutive.

6. Coverage Extensions

In addition to the Limits of Insurance of Section I –Property, you may extend the insurance providedby this policy as provided below.

Except as otherwise provided, the following ex-tensions apply to property located in or on thebuilding described in the Declarations or in theopen (or in a vehicle) within 100 feet of the de-scribed premises:

a. Newly Acquired Or Constructed Property

(1) Buildings

If this policy covers Buildings, you mayextend that insurance to apply to:

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d. Personal Effects

You may extend the insurance that applies toBusiness Personal Property to apply topersonal effects owned by you, your officers,your partners or "members", your "managers"or your employees, including temporary orleased employees. This extension does notapply to:

(1) Tools or equipment used in your busi-ness; or

(2) Loss or damage by theft.

The most we will pay for loss or damageunder this Extension is $2,500 at eachdescribed premises.

e. Valuable Papers And Records

(1) You may extend the insurance thatapplies to Business Personal Property toapply to direct physical loss or damage to"valuable papers and records" that youown, or that are in your care, custody orcontrol, caused by or resulting from aCovered Cause of Loss. This CoverageExtension includes the cost to research,replace or restore the lost information on"valuable papers and records" for whichduplicates do not exist.

(2) This Coverage Extension does not applyto:

(a) Property held as samples or fordelivery after sale; and

(b) Property in storage away from thepremises shown in the Declarations.

(3) The most we will pay under this CoverageExtension for loss or damage to "valuablepapers and records" in any one occur-rence at the described premises is$10,000, unless a higher Limit Of Insur-ance for "valuable papers and records" isshown in the Declarations.

For "valuable papers and records" not atthe described premises, the most we willpay is $5,000.

(4) Loss or damage to "valuable papers andrecords" will be valued at the cost ofrestoration or replacement of the lost or

(c) You report values to us.

We will charge you additional premium forvalues reported from the date you acquirethe property or begin construction of thatpart of the building that would qualify asCovered Property.

b. Personal Property Off-premises

You may extend the insurance provided bythis policy to apply to your Covered Property,other than "money" and "securities", "valuablepapers and records" or accounts receivable,while it is in the course of transit or at apremises you do not own, lease or operate.The most we will pay for loss or damageunder this Extension is $10,000.

c. Outdoor Property

You may extend the insurance provided bythis policy to apply to your outdoor fences,radio and television antennas (including sat-ellite dishes), signs (other than signs attachedto buildings), trees, shrubs and plants (otherthan trees, shrubs or plants which are part ofa vegetated roof), including debris removalexpense. Loss or damage must be caused byor result from any of the following causes ofloss:

(1) Fire;

(2) Lightning;

(3) Explosion;

(4) Riot or Civil Commotion; or

(5) Aircraft.

The most we will pay for loss or damage un-der this Extension is $2,500, unless a higherLimit Of Insurance for Outdoor Property isshown in the Declarations, but not more than$1,000 for any one tree, shrub or plant.

Subject to all aforementioned terms and limi-tations of coverage, this Coverage Extensionincludes the expense of removing from thedescribed premises the debris of trees,shrubs and plants which are the property ofothers, except in the situation in which youare a tenant and such property is owned bythe landlord of the described premises.

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(2) The most we will pay under this CoverageExtension for loss or damage in any oneoccurrence at the described premises is$10,000, unless a higher Limit of Insur-ance for accounts receivable is shown inthe Declarations.

For accounts receivable not at the de-scribed premises, the most we will pay is$5,000.

(3) Paragraph B. Exclusions in Section I –Property does not apply to this CoverageExtension except for:

(a) Paragraph B.1.c., GovernmentalAction;

(b) Paragraph B.1.d., Nuclear Hazard;

(c) Paragraph B.1.f., War And MilitaryAction;

(d) Paragraph B.2.f., Dishonesty;

(e) Paragraph B.2.g., False Pretense;

(f) Paragraph B.3.; and

(g) Paragraph B.6., Accounts ReceivableExclusion.

g. Business Personal Property TemporarilyIn Portable Storage Units

(1) You may extend the insurance that ap-plies to Business Personal Property toapply to such property while temporarilystored in a portable storage unit (includ-ing a detached trailer) located within 100feet of the buildings or structures de-scribed in the Declarations or within 100feet of the described premises, whicheverdistance is greater.

(2) The limitation under Paragraph A.4.a.(5)also applies to property in a portablestorage unit.

(3) Coverage under this Extension:

(a) Will end 90 days after the BusinessPersonal Property has been placed inthe storage unit;

damaged information. To the extent thatthe contents of the "valuable papers andrecords" are not restored, the "valuablepapers and records" will be valued at thecost of replacement with blank materialsof substantially identical type.

(5) Paragraph B. Exclusions in Section I –Property does not apply to this CoverageExtension except for:

(a) Paragraph B.1.c., GovernmentalAction;

(b) Paragraph B.1.d., Nuclear Hazard;

(c) Paragraph B.1.f., War And MilitaryAction;

(d) Paragraph B.2.f., Dishonesty;

(e) Paragraph B.2.g., False Pretense;

(f) Paragraph B.2.m.(2), Errors OrOmissions; and

(g) Paragraph B.3.

f. Accounts Receivable

(1) You may extend the insurance that ap-plies to Business Personal Property toapply to accounts receivable. We will pay:

(a) All amounts due from your customersthat you are unable to collect;

(b) Interest charges on any loan requiredto offset amounts you are unable tocollect pending our payment of theseamounts;

(c) Collection expenses in excess of yournormal collection expenses that aremade necessary by loss or damage;and

(d) Other reasonable expenses that youincur to reestablish your records ofaccounts receivable;

that result from direct physical loss ordamage by any Covered Cause of Lossto your records of accounts receivable.

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b. Earth Movement

(1) Earthquake, including tremors andaftershocks and any earth sinking, risingor shifting related to such event;

(2) Landslide, including any earth sinking,rising or shifting related to such event;

(3) Mine subsidence, meaning subsidence ofa man-made mine, whether or not miningactivity has ceased;

(4) Earth sinking (other than sinkhole col-lapse), rising or shifting including soilconditions which cause settling, crackingor other disarrangement of foundations orother parts of realty. Soil conditionsinclude contraction, expansion, freezing,thawing, erosion, improperly compactedsoil and the action of water under theground surface.

But if Earth Movement, as described inParagraphs (1) through (4) above, results infire or explosion, we will pay for the loss ordamage caused by that fire or explosion.

(5) Volcanic eruption, explosion or effusion.But if volcanic eruption, explosion or effu-sion results in fire, building glass break-age or volcanic action, we will pay for theloss or damage caused by that fire, build-ing glass breakage or volcanic action.

Volcanic action means direct loss or dam-age resulting from the eruption of a vol-cano when the loss or damage is causedby:

(a) Airborne volcanic blast or airborneshock waves;

(b) Ash, dust or particulate matter; or

(c) Lava flow.

With respect to coverage for volcanicaction as set forth in 5(a), (5)(b) and 5(c),all volcanic eruptions that occur withinany 168-hour period will constitute asingle occurrence.

Volcanic action does not include the costto remove ash, dust or particulate matterthat does not cause direct physical loss ofor damage to Covered Property.

(b) Does not apply if the storage unititself has been in use at the describedpremises for more than 90 consecu-tive days, even if the BusinessPersonal Property has been storedthere for 90 or fewer days as of thetime of loss or damage.

(4) Under this Extension, the most we willpay for the total of all loss or damage toBusiness Personal Property is $10,000(unless a higher limit is indicated in theDeclarations for such Extension) regard-less of the number of storage units.

(5) This Extension does not apply to loss ordamage otherwise covered under thisCoverage Form or any endorsement tothis Coverage Form, and does not applyto loss or damage to the storage unititself.

B. Exclusions

1. We will not pay for loss or damage caused direct-ly or indirectly by any of the following. Such lossor damage is excluded regardless of any othercause or event that contributes concurrently or inany sequence to the loss. These exclusions applywhether or not the loss event results in wide-spread damage or affects a substantial area.

a. Ordinance Or Law

(1) The enforcement of or compliance withany ordinance or law:

(a) Regulating the construction, use orrepair of any property; or

(b) Requiring the tearing down of anyproperty, including the cost of re-moving its debris.

(2) This exclusion, Ordinance Or Law, ap-plies whether the loss results from:

(a) An ordinance or law that is enforcedeven if the property has not beendamaged; or

(b) The increased costs incurred tocomply with an ordinance or law inthe course of construction, repair,renovation, remodeling or demolitionof property or removal of its debris,following a physical loss to thatproperty.

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This exclusion does not apply to loss or dam-age to "computer(s)" and "electronic data".

f. War And Military Action

(1) War, including undeclared or civil war;

(2) Warlike action by a military force,including action in hindering or defendingagainst an actual or expected attack, byany government, sovereign or otherauthority using military personnel or otheragents; or

(3) Insurrection, rebellion, revolution, usurpedpower, or action taken by governmentalauthority in hindering or defendingagainst any of these.

g. Water

(1) Flood, surface water, waves (includingtidal wave and tsunami), tides, tidal water,overflow of any body of water, or sprayfrom any of these, all whether or notdriven by wind (including storm surge);

(2) Mudslide or mudflow;

(3) Water that backs up or overflows or isotherwise discharged from a sewer, drain,sump, sump pump or related equipment;

(4) Water under the ground surface pressingon, or flowing or seeping through:

(a) Foundations, walls, floors or pavedsurfaces;

(b) Basements, whether paved or not; or

(c) Doors, windows or other openings; or

(5) Waterborne material carried or otherwisemoved by any of the water referred to inParagraph (1), (3) or (4), or materialcarried or otherwise moved by mudslideor mudflow.

This exclusion applies regardless of whetherany of the above, in Paragraphs (1) through(5), is caused by an act of nature or isotherwise caused. An example of a situationto which this exclusion applies is the situationwhere a dam, levee, seawall or other bound-ary or containment system fails in whole or inpart, for any reason, to contain the water.

This exclusion applies regardless of whetherany of the above, in Paragraphs (1) through(5), is caused by an act of nature or isotherwise caused.

c. Governmental Action

Seizure or destruction of property by order ofgovernmental authority.

But we will pay for loss or damage caused byor resulting from acts of destruction orderedby governmental authority and taken at thetime of a fire to prevent its spread, if the firewould be covered under this policy.

d. Nuclear Hazard

Nuclear reaction or radiation, or radioactivecontamination, however caused.

But if nuclear reaction or radiation, or radio-active contamination, results in fire, we willpay for the loss or damage caused by thatfire.

e. Utility Services

The failure of power, communication, water orother utility service supplied to the describedpremises, however caused, if the failure:

(1) Originates away from the describedpremises; or

(2) Originates at the described premises, butonly if such failure involves equipmentused to supply the utility service to thedescribed premises from a source awayfrom the described premises.

Failure of any utility service includes lack ofsufficient capacity and reduction in supply.

Loss or damage caused by a surge of poweris also excluded, if the surge would not haveoccurred but for an event causing a failure ofpower.

But if the failure or surge of power, or thefailure of communication, water or other utilityservice, results in a Covered Cause of Loss,we will pay for the loss or damage caused bythat Covered Cause of Loss.

Communication services include but are notlimited to service relating to Internet access oraccess to any electronic, cellular or satellitenetwork.

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However, if excluded loss or damage, asdescribed in Paragraph (1) above, results in a"specified cause of loss" under Section I –Property, we will pay only for the loss or dam-age caused by such "specified cause of loss".

We will not pay for repair, replacement ormodification of any items in Paragraph (1)(a)or (1)(b) to correct any deficiencies or changeany features.

i. "Fungi", Wet Rot Or Dry Rot

Presence, growth, proliferation, spread or anyactivity of "fungi", wet rot or dry rot.

But if "fungi", wet rot or dry rot results in a"specified cause of loss", we will pay for theloss or damage caused by that "specifiedcause of loss".

This exclusion does not apply:

(1) When "fungi", wet rot or dry rot resultsfrom fire or lightning; or

(2) To the extent that coverage is provided inthe Limited Coverage For "Fungi", WetRot Or Dry Rot Additional Coverage, withrespect to loss or damage by a cause ofloss other than fire or lightning.

j. Virus Or Bacteria

(1) Any virus, bacterium or other microorgan-ism that induces or is capable of inducingphysical distress, illness or disease.

(2) However, the exclusion in Paragraph (1)does not apply to loss or damage causedby or resulting from "fungi", wet rot or dryrot. Such loss or damage is addressed inExclusion i.

(3) With respect to any loss or damage sub-ject to the exclusion in Paragraph (1),such exclusion supersedes any exclusionrelating to "pollutants".

2. We will not pay for loss or damage caused by orresulting from any of the following:

a. Electrical Apparatus

Artificially generated electrical, magnetic orelectromagnetic energy that damages, dis-turbs, disrupts or otherwise interferes withany:

But if any of the above, in Paragraphs (1)through (5), results in fire, explosion orsprinkler leakage, we will pay for the loss ordamage caused by that fire, explosion orsprinkler leakage.

h. Certain Computer-related Losses

(1) The failure, malfunction or inadequacy of:

(a) Any of the following, whether belong-ing to any insured or to others:

(i) "Computer" hardware, includingmicroprocessors or other elec-tronic data processing equipmentas may be described elsewherein this policy;

(ii) "Computer" application softwareor other "electronic data" as maybe described elsewhere in thispolicy;

(iii) "Computer" operating systemsand related software;

(iv) "Computer" networks;

(v) Microprocessors ("computer"chips) not part of any "computer"system; or

(vi) Any other computerized or elec-tronic equipment or components;or

(b) Any other products, and any services,data or functions that directly orindirectly use or rely upon, in anymanner, any of the items listed inParagraph (a) above;

due to the inability to correctly recognize,distinguish, interpret or accept one ormore dates or times. An example is theinability of computer software to recog-nize the year 2000.

(2) Any advice, consultation, design, evalua-tion, inspection, installation, maintenance,repair, replacement or supervision pro-vided or done by you or for you to deter-mine, rectify or test for, any potential oractual problems described in Paragraph(1) above.

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e. Frozen Plumbing

Water, other liquids, powder or molten mater-ial that leaks or flows from plumbing, heating,air conditioning or other equipment (exceptfire protective systems) caused by or resultingfrom freezing, unless:

(1) You do your best to maintain heat in thebuilding or structure; or

(2) You drain the equipment and shut off thesupply if the heat is not maintained.

f. Dishonesty

Dishonest or criminal acts (including theft) byyou, anyone else with an interest in the prop-erty, or any of your or their partners, "mem-bers", officers, "managers", employees (in-cluding temporary or leased employees),directors, trustees or authorized represent-atives, whether acting alone or in collusionwith each other or with any other party; ortheft by any person to whom you entrust theproperty for any purpose, whether actingalone or in collusion with any other party.

This exclusion:

(1) Applies whether or not an act occursduring your normal hours of operation;

(2) Does not apply to acts of destruction byyour employees (including temporary orleased employees) or authorized repre-sentatives; but theft by your employees(including temporary or leased em-ployees) or authorized representatives isnot covered.

With respect to accounts receivable and"valuable papers and records", this exclusiondoes not apply to carriers for hire.

This exclusion does not apply to coveragethat is provided under the Employee Dishon-esty Optional Coverage.

g. False Pretense

Voluntary parting with any property by you oranyone else to whom you have entrusted theproperty if induced to do so by any fraudulentscheme, trick, device or false pretense.

(1) Electrical or electronic wire, device, appli-ance, system or network; or

(2) Device, appliance, system or networkutilizing cellular or satellite technology.

For the purpose of this exclusion, electrical,magnetic or electromagnetic energy includesbut is not limited to:

(1) Electrical current, including arcing;

(2) Electrical charge produced or conductedby a magnetic or electromagnetic field;

(3) Pulse of electromagnetic energy; or

(4) Electromagnetic waves or microwaves.

But if fire results, we will pay for the loss ordamage caused by fire.

We will pay for loss or damage to "compu-ter(s)" due to artificially generated electrical,magnetic or electromagnetic energy if suchloss or damage is caused by or results from:

(1) An occurrence that took place within 100feet of the described premises; or

(2) Interruption of electric power supply,power surge, blackout or brownout if thecause of such occurrence took placewithin 100 feet of the described premises.

b. Consequential Losses

Delay, loss of use or loss of market.

c. Smoke, Vapor, Gas

Smoke, vapor or gas from agricultural smudg-ing or industrial operations.

d. Steam Apparatus

Explosion of steam boilers, steam pipes,steam engines or steam turbines owned orleased by you, or operated under your con-trol. But if explosion of steam boilers, steampipes, steam engines or steam turbines re-sults in fire or combustion explosion, we willpay for the loss or damage caused by that fireor combustion explosion. We will also pay forloss or damage caused by or resulting fromthe explosion of gases or fuel within thefurnace of any fired vessel or within the fluesor passages through which the gases ofcombustion pass.

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"pollutants" results in a "specified cause ofloss", we will pay for the loss or damagecaused by that "specified cause of loss".

k. Neglect

Neglect of an insured to use all reasonablemeans to save and preserve property fromfurther damage at and after the time of loss.

l. Other Types Of Loss

(1) Wear and tear;

(2) Rust or other corrosion, decay, deteri-oration, hidden or latent defect or anyquality in property that causes it todamage or destroy itself;

(3) Smog;

(4) Settling, cracking, shrinking or expansion;

(5) Nesting or infestation, or discharge or re-lease of waste products or secretions, byinsects, birds, rodents or other animals;

(6) Mechanical breakdown, including ruptureor bursting caused by centrifugal force.

This exclusion does not apply with re-spect to the breakdown of "computer(s)";

(7) The following causes of loss to personalproperty:

(a) Dampness or dryness of atmosphere;

(b) Changes in or extremes of tempera-ture; or

(c) Marring or scratching.

But if an excluded cause of loss that is listedin Paragraphs (1) through (7) above results ina "specified cause of loss" or building glassbreakage, we will pay for the loss or damagecaused by that "specified cause of loss" orbuilding glass breakage.

m. Errors Or Omissions

Errors or omissions in:

(1) Programming, processing or storing data,as described under "electronic data" or inany "computer" operations; or

h. Exposed Property

Rain, snow, ice or sleet to personal propertyin the open.

i. Collapse

(1) Collapse, including any of the followingconditions of property or any part of theproperty:

(a) An abrupt falling down or caving in;

(b) Loss of structural integrity, includingseparation of parts of the property orproperty in danger of falling down orcaving in; or

(c) Any cracking, bulging, sagging, bend-ing, leaning, settling, shrinkage orexpansion as such condition relatesto Paragraph i.(1)(a) or i.(1)(b).

But if collapse results in a Covered Cause ofLoss at the described premises, we will payfor the loss or damage caused by that Cov-ered Cause of Loss.

(2) This Exclusion i. does not apply:

(a) To the extent that coverage is provid-ed under the Additional Coverage –Collapse; or

(b) To collapse caused by one or more ofthe following:

(i) The "specified causes of loss";

(ii) Breakage of building glass;

(iii) Weight of rain that collects on aroof; or

(iv) Weight of people or personalproperty.

j. Pollution

We will not pay for loss or damage caused byor resulting from the discharge, dispersal,seepage, migration, release or escape of "pol-lutants" unless the discharge, dispersal,seepage, migration, release or escape is it-self caused by any of the "specified causesof loss". But if the discharge, dispersal,seepage, migration, release or escape of

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c. Negligent Work

Faulty, inadequate or defective:

(1) Planning, zoning, development, survey-ing, siting;

(2) Design, specifications, workmanship, re-pair, construction, renovation, remodel-ing, grading, compaction;

(3) Materials used in repair, construction,renovation or remodeling; or

(4) Maintenance;

of part or all of any property on or off thedescribed premises.

4. Additional Exclusion

The following applies only to the property spec-ified in this Additional Exclusion:

Loss Or Damage To Products

We will not pay for loss or damage to any mer-chandise, goods or other product caused by orresulting from error or omission by any person orentity (including those having possession underan arrangement where work or a portion of thework is outsourced) in any stage of the develop-ment, production or use of the product, includingplanning, testing, processing, packaging, installa-tion, maintenance or repair. This exclusion ap-plies to any effect that compromises the form,substance or quality of the product. But if sucherror or omission results in a Covered Cause ofLoss, we will pay for the loss or damage causedby that Covered Cause of Loss.

5. Business Income And Extra ExpenseExclusions

a. We will not pay for:

(1) Any Extra Expense, or increase of Busi-ness Income loss, caused by or resultingfrom:

(a) Delay in rebuilding, repairing or re-placing the property or resuming"operations", due to interference atthe location of the rebuilding, repair orreplacement by strikers or otherpersons; or

(2) Processing or copying "valuable papersand records".

However, we will pay for direct physical lossor damage caused by resulting fire or explo-sion if these causes of loss would be coveredby this Coverage Form.

n. Installation, Testing, Repair

Errors or deficiency in design, installation,testing, maintenance, modification or repair ofyour "computer" system including "electronicdata".

However, we will pay for direct physical lossor damage caused by resulting fire or explo-sion if these causes of loss would be coveredby this Coverage Form.

o. Electrical Disturbance

Electrical or magnetic injury, disturbance orerasure of "electronic data", except as pro-vided for under the Additional Coverages ofSection I – Property.

However, we will pay for direct loss ordamage caused by lightning.

p. Continuous Or Repeated Seepage OrLeakage Of Water

Continuous or repeated seepage or leakageof water, or the presence or condensation ofhumidity, moisture or vapor, that occurs overa period of 14 days or more.

3. We will not pay for loss or damage caused by orresulting from any of the following Paragraphs a.through c. But if an excluded cause of loss that islisted in Paragraphs a. through c. results in aCovered Cause of Loss, we will pay for the loss ordamage caused by that Covered Cause of Loss.

a. Weather Conditions

Weather conditions. But this exclusion onlyapplies if weather conditions contribute in anyway with a cause or event excluded in Par-agraph B.1. above to produce the loss ordamage.

b. Acts Or Decisions

Acts or decisions, including the failure to actor decide, of any person, group, organizationor governmental body.

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2. The most we will pay for loss of or damage tooutdoor signs attached to buildings is $1,000 persign in any one occurrence.

3. The amounts of insurance applicable to theCoverage Extensions and the following AdditionalCoverages apply in accordance with the terms ofsuch coverages and are in addition to the Limitsof Insurance of Section I – Property:

a. Fire Department Service Charge;

b. Pollutant Clean-up And Removal;

c. Increased Cost Of Construction;

d. Business Income From DependentProperties;

e. Electronic Data; and

f. Interruption Of Computer Operations.

4. Building Limit – Automatic Increase

a. In accordance with Paragraph C.4.b., theLimit of Insurance for Buildings will auto-matically increase by 8%, unless a differentpercentage of annual increase is shown in theDeclarations.

b. The amount of increase is calculated asfollows:

(1) Multiply the Building limit that applied onthe most recent of the policy inceptiondate, the policy anniversary date or anyother policy change amending theBuilding limit by:

(a) The percentage of annual increaseshown in the Declarations, expressedas a decimal (example: 7% is .07); or

(b) .08, if no percentage of annual in-crease is shown in the Declarations;and

(2) Multiply the number calculated in accord-ance with b.(1) by the number of dayssince the beginning of the current policyyear, or the effective date of the mostrecent policy change amending theBuilding limit, divided by 365.

(b) Suspension, lapse or cancellation ofany license, lease or contract. But ifthe suspension, lapse or cancellationis directly caused by the suspensionof "operations", we will cover suchloss that affects your Business In-come during the "period of restora-tion" and any extension of the "periodof restoration" in accordance with theterms of the Extended BusinessIncome Additional Coverage.

(2) Any other consequential loss.

b. With respect to this exclusion, suspensionmeans:

(1) The partial slowdown or complete cessa-tion of your business activities; and

(2) That a part or all of the described prem-ises is rendered untenantable, if coveragefor Business Income applies.

6. Accounts Receivable Exclusion

The following additional exclusion applies to theAccounts Receivable Coverage Extension:

We will not pay for:

a. Loss or damage caused by or resulting fromalteration, falsification, concealment or de-struction of records of accounts receivabledone to conceal the wrongful giving, taking orwithholding of "money", "securities" or otherproperty.

This exclusion applies only to the extent ofthe wrongful giving, taking or withholding.

b. Loss or damage caused by or resulting frombookkeeping, accounting or billing errors oromissions.

c. Any loss or damage that requires any audit ofrecords or any inventory computation to proveits factual existence.

C. Limits Of Insurance

1. The most we will pay for loss or damage in anyone occurrence is the applicable Limits OfInsurance of Section I – Property shown in theDeclarations.

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a. Money and Securities;

b. Employee Dishonesty;

c. Outdoor Signs; and

d. Forgery or Alteration.

But this Optional Coverage Deductible will not in-crease the Deductible shown in the Declarations.This Deductible will be used to satisfy the require-ments of the Deductible in the Declarations.

3. No deductible applies to the following AdditionalCoverages:

a. Fire Department Service Charge;

b. Business Income;

c. Extra Expense;

d. Civil Authority; and

e. Fire Extinguisher Systems RechargeExpense.

E. Property Loss Conditions

1. Abandonment

There can be no abandonment of any property tous.

2. Appraisal

If we and you disagree on the amount of loss,either may make written demand for an appraisalof the loss. In this event, each party will select acompetent and impartial appraiser. The twoappraisers will select an umpire. If they cannotagree, either may request that selection be madeby a judge of a court having jurisdiction. Theappraisers will state separately the amount ofloss. If they fail to agree, they will submit theirdifferences to the umpire. A decision agreed to byany two will be binding. Each party will:

a. Pay its chosen appraiser; and

b. Bear the other expenses of the appraisal andumpire equally.

If there is an appraisal, we will still retain our rightto deny the claim.

Example

If:

The applicable Building limit is $100,000. Theannual percentage increase is 8%. The num-ber of days since the beginning of the policyyear (or last policy change) is 146.

The amount of increase is

$100,000 x .08 x 146 ÷ 365 = $3,200.

5. Business Personal Property Limit – SeasonalIncrease

a. Subject to Paragraph 5.b., the Limit ofInsurance for Business Personal Property isautomatically increased by:

(1) The Business Personal Property – Sea-sonal Increase percentage shown in theDeclarations; or

(2) 25% if no Business Personal Property –Seasonal Increase percentage is shownin the Declarations;

to provide for seasonal variances.

b. The increase described in Paragraph 5.a. willapply only if the Limit Of Insurance shown forBusiness Personal Property in the Declara-tions is at least 100% of your averagemonthly values during the lesser of:

(1) The 12 months immediately precedingthe date the loss or damage occurs; or

(2) The period of time you have been inbusiness as of the date the loss ordamage occurs.

D. Deductibles

1. We will not pay for loss or damage in any oneoccurrence until the amount of loss or damageexceeds the Deductible shown in the Declara-tions. We will then pay the amount of loss ordamage in excess of the Deductible up to theapplicable Limit of Insurance of Section I –Property.

2. Regardless of the amount of the Deductible, themost we will deduct from any loss or damageunder all of the following Optional Coverages inany one occurrence is the Optional CoverageDeductible shown in the Declarations:

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b. We may examine any insured under oath,while not in the presence of any other insuredand at such times as may be reasonablyrequired, about any matter relating to thisinsurance or the claim, including an insured'sbooks and records. In the event of an exam-ination, an insured's answers must be signed.

4. Legal Action Against Us

No one may bring a legal action against us underthis insurance unless:

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

b. The action is brought within two years afterthe date on which the direct physical loss ordamage occurred.

5. Loss Payment

In the event of loss or damage covered by thispolicy:

a. At our option, we will either:

(1) Pay the value of lost or damagedproperty;

(2) Pay the cost of repairing or replacing thelost or damaged property;

(3) Take all or any part of the property at anagreed or appraised value; or

(4) Repair, rebuild or replace the propertywith other property of like kind and quali-ty, subject to Paragraph d.(1)(e) below.

b. We will give notice of our intentions within 30days after we receive the sworn proof of loss.

c. We will not pay you more than your financialinterest in the Covered Property.

d. Except as provided in Paragraphs (2) through(7) below, we will determine the value ofCovered Property as follows:

(1) At replacement cost without deduction fordepreciation, subject to the following:

(a) If, at the time of loss, the Limit ofInsurance on the lost or damagedproperty is 80% or more of the full

3. Duties In The Event Of Loss Or Damage

a. You must see that the following are done inthe event of loss or damage to CoveredProperty:

(1) Notify the police if a law may have beenbroken.

(2) Give us prompt notice of the loss or dam-age. Include a description of the propertyinvolved.

(3) As soon as possible, give us a descriptionof how, when and where the loss ordamage occurred.

(4) Take all reasonable steps to protect theCovered Property from further damage,and keep a record of your expenses nec-essary to protect the Covered Property,for consideration in the settlement of theclaim. This will not increase the Limits ofInsurance of Section I – Property. How-ever, we will not pay for any subsequentloss or damage resulting from a cause ofloss that is not a Covered Cause of Loss.Also, if feasible, set the damaged prop-erty aside and in the best possible orderfor examination.

(5) At our request, give us complete inven-tories of the damaged and undamagedproperty. Include quantities, costs, valuesand amount of loss claimed.

(6) As often as may be reasonably required,permit us to inspect the property provingthe loss or damage and examine yourbooks and records.

Also permit us to take samples of dam-aged and undamaged property for inspec-tion, testing and analysis, and permit usto make copies from your books andrecords.

(7) Send us a signed, sworn proof of losscontaining the information we request toinvestigate the claim. You must do thiswithin 60 days after our request. We willsupply you with the necessary forms.

(8) Cooperate with us in the investigation orsettlement of the claim.

(9) Resume all or part of your "operations" asquickly as possible.

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Example

The full replacement cost of prop-erty which suffers a total loss is$100,000. The property is insuredfor $70,000. 80% of the full re-placement cost of the propertyimmediately before the loss is$80,000 ($100,000 x .80 =$80,000). A partial loss of$25,000 is sustained. Theamount of recovery is determinedas follows:

Amount of recovery

$70,000 ÷ $80,000 = .875

.875 x $25,000 = $21,875

(c) You may make a claim for loss ordamage covered by this insurance onan actual cash value basis instead ofon a replacement cost basis. In theevent you elect to have loss or dam-age settled on an actual cash valuebasis, you may still make a claim on areplacement cost basis if you notifyus of your intent to do so within 180days after the loss or damage.

(d) We will not pay on a replacementcost basis for any loss or damage:

(i) Until the lost or damaged proper-ty is actually repaired or replaced;and

(ii) Unless the repair or replacementis made as soon as reasonablypossible after the loss or damage.

However, if the cost to repair or re-place the damaged building propertyis $2,500 or less, we will settle theloss according to the provisions ofParagraphs d.(1)(a) and d.(1)(b)above whether or not the actualrepair or replacement is complete.

(e) The cost to repair, rebuild or replacedoes not include the increased costattributable to enforcement of or com-pliance with any ordinance or law reg-ulating the construction, use or repairof any property.

replacement cost of the propertyimmediately before the loss, we willpay the cost to repair or replace, afterapplication of the deductible andwithout deduction for depreciation,but not more than the least of thefollowing amounts:

(i) The Limit of Insurance underSection I – Property that appliesto the lost or damaged property;

(ii) The cost to replace, on the samepremises, the lost or damagedproperty with other property:

i. Of comparable material andquality; and

ii. Used for the same purpose;or

(iii) The amount that you actuallyspend that is necessary to repairor replace the lost or damagedproperty.

If a building is rebuilt at a new prem-ises, the cost is limited to the costwhich would have been incurred hadthe building been built at the originalpremises.

(b) If, at the time of loss, the Limit ofInsurance applicable to the lost ordamaged property is less than 80% ofthe full replacement cost of theproperty immediately before the loss,we will pay the greater of the fol-lowing amounts, but not more thanthe Limit of Insurance that applies tothe property:

(i) The actual cash value of the lostor damaged property; or

(ii) A proportion of the cost to repairor replace the lost or damagedproperty, after application of thedeductible and without deductionfor depreciation. This proportionwill equal the ratio of the appli-cable Limit of Insurance to 80%of the full replacement cost of theproperty.

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from the installation of improve-ments to the expiration of thelease.

If your lease contains a renewal op-tion, the expiration of the renewaloption period will replace the expira-tion of the lease in this procedure.

(c) Nothing if others pay for repairs orreplacement.

(6) Applicable only to the Optional Cover-ages:

(a) "Money" at its face value; and

(b) "Securities" at their value at the closeof business on the day the loss isdiscovered.

(7) Applicable only to accounts receivable:

(a) If you cannot accurately establish theamount of accounts receivable out-standing as of the time of loss ordamage:

(i) We will determine the total of theaverage monthly amounts ofaccounts receivable for the 12months immediately precedingthe month in which the loss ordamage occurs; and

(ii) We will adjust that total for anynormal fluctuations in the amountof accounts receivable for themonth in which the loss ordamage occurred or for anydemonstrated variance from theaverage for that month.

(b) The following will be deducted fromthe total amount of accounts receiv-able, however that amount isestablished:

(i) The amount of the accounts forwhich there is no loss or damage;

(ii) The amount of the accounts thatyou are able to reestablish orcollect;

(iii) An amount to allow for probablebad debts that you are normallyunable to collect; and

(2) If the Actual Cash Value – Buildings op-tion applies, as shown in the Declara-tions, Paragraph (1) above does not applyto Buildings. Instead, we will determinethe value of Buildings at actual cashvalue.

(3) The following property at actual cashvalue:

(a) Used or secondhand merchandiseheld in storage or for sale;

(b) Property of others. However, if anitem(s) of personal property of othersis subject to a written contract whichgoverns your liability for loss or dam-age to that item(s), then valuation ofthat item(s) will be based on theamount for which you are liable undersuch contract, but not to exceed thelesser of the replacement cost of theproperty or the applicable Limit ofInsurance;

(c) Household contents, except personalproperty in apartments or roomsfurnished by you as landlord;

(d) Manuscripts; and

(e) Works of art, antiques or rare articles,including etchings, pictures, statuary,marble, bronzes, porcelain andbric-a-brac.

(4) Glass at the cost of replacement withsafety glazing material if required by law.

(5) Tenants' improvements and bettermentsat:

(a) Replacement cost if you make repairspromptly.

(b) A proportion of your original cost ifyou do not make repairs promptly.We will determine the proportionatevalue as follows:

(i) Multiply the original cost by thenumber of days from the loss ordamage to the expiration of thelease; and

(ii) Divide the amount determined in(i) above by the number of days

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7. Resumption Of Operations

We will reduce the amount of your:

a. Business Income loss, other than Extra Ex-pense, to the extent you can resume your"operations", in whole or in part, by usingdamaged or undamaged property (includingmerchandise or stock) at the describedpremises or elsewhere.

b. Extra Expense loss to the extent you canreturn "operations" to normal and discontinuesuch Extra Expense.

8. Vacancy

a. Description Of Terms

(1) As used in this Vacancy Condition, theterm building and the term vacant havethe meanings set forth in Paragraphs (a)and (b) below:

(a) When this policy is issued to a tenant,and with respect to that tenant'sinterest in Covered Property, buildingmeans the unit or suite rented orleased to the tenant. Such building isvacant when it does not containenough business personal property toconduct customary operations.

(b) When this policy is issued to theowner or general lessee of a building,building means the entire building.Such building is vacant unless atleast 31% of its total square footageis:

(i) Rented to a lessee or sublesseeand used by the lessee or subles-see to conduct its customaryoperations; and/or

(ii) Used by the building owner toconduct customary operations.

(2) Buildings under construction or renova-tion are not considered vacant.

b. Vacancy Provisions

If the building where loss or damage occurshas been vacant for more than 60 consecu-tive days before that loss or damage occurs:

(iv) All unearned interest and servicecharges.

e. Our payment for loss of or damage to per-sonal property of others will only be for theaccount of the owners of the property. Wemay adjust losses with the owners of lost ordamaged property if other than you. If we paythe owners, such payments will satisfy yourclaims against us for the owners' property.We will not pay the owners more than theirfinancial interest in the Covered Property.

f. We may elect to defend you against suitsarising from claims of owners of property. Wewill do this at our expense.

g. We will pay for covered loss or damage within30 days after we receive the sworn proof ofloss, provided you have complied with all ofthe terms of this policy, and:

(1) We have reached agreement with you onthe amount of loss; or

(2) An appraisal award has been made.

h. A party wall is a wall that separates and iscommon to adjoining buildings that are ownedby different parties. In settling covered lossesinvolving a party wall, we will pay a proportionof the loss to the party wall based on yourinterest in the wall in proportion to the interestof the owner of the adjoining building. How-ever, if you elect to repair or replace yourbuilding and the owner of the adjoining build-ing elects not to repair or replace thatbuilding, we will pay you the full value of theloss to the party wall, subject to all applicablepolicy provisions including Limits of Insuranceand all other provisions of this Loss PaymentCondition. Our payment under the provisionsof this paragraph does not alter any right ofsubrogation we may have against any entity,including the owner or insurer of the adjoiningbuilding, and does not alter the terms of theTransfer Of Rights Of Recovery AgainstOthers To Us Condition in this policy.

6. Recovered Property

If either you or we recover any property after losssettlement, that party must give the other promptnotice. At your option, you may retain the prop-erty. But then you must return to us the amountwe paid to you for the property. We will payrecovery expenses and the expenses to repair therecovered property, subject to the Limits of Insur-ance of Section I – Property.

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(1) Pays any premium due under this policyat our request if you have failed to do so;

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

(3) Has notified us of any change in owner-ship, occupancy or substantial change inrisk known to the mortgageholder.

All of the terms of this policy will then applydirectly to the mortgageholder.

e. If we pay the mortgageholder for any loss ordamage and deny payment to you because ofyour acts or because you have failed tocomply with the terms of this policy:

(1) The mortgageholder's rights under themortgage will be transferred to us to theextent of the amount we pay; and

(2) The mortgageholder's right to recover thefull amount of the mortgageholder's claimwill not be impaired.

At our option, we may pay to the mortgage-holder the whole principal on the mortgageplus any accrued interest. In this event, yourmortgage and note will be transferred to usand you will pay your remaining mortgagedebt to us.

f. If we cancel this policy, we will give writtennotice to the mortgageholder at least:

(1) 10 days before the effective date of can-cellation if we cancel for your nonpay-ment of premium; or

(2) 30 days before the effective date of can-cellation if we cancel for any otherreason.

g. If we elect not to renew this policy, we willgive written notice to the mortgageholder atleast 10 days before the expiration date ofthis policy.

3. No Benefit To Bailee

No person or organization, other than you, havingcustody of Covered Property will benefit from thisinsurance.

(1) We will not pay for any loss or damagecaused by any of the following even ifthey are Covered Causes of Loss:

(a) Vandalism;

(b) Sprinkler leakage, unless you haveprotected the system againstfreezing;

(c) Building glass breakage;

(d) Water damage;

(e) Theft; or

(f) Attempted theft.

(2) With respect to Covered Causes of Lossother than those listed in Paragraphs(1)(a) through (1)(f) above, we will reducethe amount we would otherwise pay forthe loss or damage by 15%.

F. Property General Conditions

1. Control Of Property

Any act or neglect of any person other than youbeyond your direction or control will not affect thisinsurance.

The breach of any condition of this CoverageForm at any one or more locations will not affectcoverage at any location where, at the time ofloss or damage, the breach of condition does notexist.

2. Mortgageholders

a. The term "mortgageholder" includes trustee.

b. We will pay for covered loss of or damage tobuildings or structures to each mortgage-holder shown in the Declarations in their orderof precedence, as interests may appear.

c. The mortgageholder has the right to receiveloss payment even if the mortgageholder hasstarted foreclosure or similar action on thebuilding or structure.

d. If we deny your claim because of your acts orbecause you have failed to comply with theterms of this policy, the mortgageholder willstill have the right to receive loss payment ifthe mortgageholder:

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(3) Rust;

(4) Corrosion; or

(5) Mechanical breakdown.

d. The most we will pay for loss or damage inany one occurrence is the Limit Of Insurancefor Outdoor Signs shown in the Declarations.

e. The provisions of this Optional Coveragesupersede all other references to outdoorsigns in this policy.

2. Money And Securities

a. We will pay for loss of "money" and"securities" used in your business while at abank or savings institution, within your livingquarters or the living quarters of your partnersor any employee (including a temporary orleased employee) having use and custody ofthe property, at the described premises, or intransit between any of these places, resultingdirectly from:

(1) Theft, meaning any act of stealing;

(2) Disappearance; or

(3) Destruction.

b. In addition to the Limitations and Exclusionsapplicable to Section I – Property, we will notpay for loss:

(1) Resulting from accounting or arithmeticalerrors or omissions;

(2) Due to the giving or surrendering ofproperty in any exchange or purchase; or

(3) Of property contained in any "money"-operated device unless the amount of"money" deposited in it is recorded by acontinuous recording instrument in thedevice.

c. The most we will pay for loss in any oneoccurrence is:

(1) The limit shown in the Declarations forInside the Premises for "money" and"securities" while:

(a) In or on the described premises; or

(b) Within a bank or savings institution;and

4. Policy Period, Coverage Territory

Under Section I – Property:

a. We cover loss or damage commencing:

(1) During the policy period shown in theDeclarations; and

(2) Within the coverage territory or, withrespect to property in transit, while it isbetween points in the coverage territory.

b. The coverage territory is:

(1) The United States of America (includingits territories and possessions);

(2) Puerto Rico; and

(3) Canada.

G. Optional Coverages

If shown as applicable in the Declarations, the follow-ing Optional Coverages also apply. These coveragesare subject to the terms and conditions applicable toproperty coverage in this policy, except as providedbelow:

1. Outdoor Signs

a. We will pay for direct physical loss of ordamage to all outdoor signs at the describedpremises:

(1) Owned by you; or

(2) Owned by others but in your care,custody or control.

b. Paragraph A.3., Covered Causes Of Lossand Paragraph B., Exclusions in Section I –Property do not apply to this OptionalCoverage, except for:

(1) Paragraph B.1.c., Governmental Action;

(2) Paragraph B.1.d., Nuclear Hazard; and

(3) Paragraph B.1.f., War And MilitaryAction.

c. We will not pay for loss or damage caused byor resulting from:

(1) Wear and tear;

(2) Hidden or latent defect;

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(3) The only proof of which as to its existenceor amount is:

(a) An inventory computation; or

(b) A profit and loss computation.

(4) Caused by an employee if the employeehad also committed theft or any otherdishonest act prior to the effective date ofthis policy and you or any of yourpartners, "members", "managers", offi-cers, directors or trustees, not in collusionwith the employee, learned of that theft ordishonest act prior to the policy periodshown in the Declarations.

c. The most we will pay for loss or damage inany one occurrence is the Limit Of Insurancefor Employee Dishonesty shown in theDeclarations.

d. All loss or damage:

(1) Caused by one or more persons; or

(2) Involving a single act or series of acts;

is considered one occurrence.

e. If any loss is covered:

(1) Partly by this insurance; and

(2) Partly by any prior cancelled or termi-nated insurance that we or any affiliatehad issued to you or any predecessor ininterest;

the most we will pay is the larger of theamount recoverable under this insurance orthe prior insurance.

We will pay only for loss or damage yousustain through acts committed or eventsoccurring during the policy period. Regardlessof the number of years this policy remains inforce or the number of premiums paid, noLimit of Insurance cumulates from year toyear or period to period.

f. This Optional Coverage is cancelled as to anyemployee immediately upon discovery by:

(1) You; or

(2) The limit shown in the Declarations forOutside the Premises for "money" and"securities" while anywhere else.

d. All loss:

(1) Caused by one or more persons; or

(2) Involving a single act or series of relatedacts;

is considered one occurrence.

e. You must keep records of all "money" and"securities" so we can verify the amount ofany loss or damage.

3. Employee Dishonesty

a. We will pay for direct loss of or damage toBusiness Personal Property and "money" and"securities" resulting from dishonest actscommitted by any of your employees actingalone or in collusion with other persons(except you or your partner) with the manifestintent to:

(1) Cause you to sustain loss or damage;and also

(2) Obtain financial benefit (other than sala-ries, commissions, fees, bonuses, promo-tions, awards, profit sharing, pensions orother employee benefits earned in thenormal course of employment) for:

(a) Any employee; or

(b) Any other person or organization.

b. We will not pay for loss or damage:

(1) Resulting from any dishonest or criminalact that you or any of your partners or"members" commit whether acting aloneor in collusion with other persons.

(2) Resulting from any dishonest act com-mitted by any of your employees (exceptas provided in Paragraph a.), "managers"or directors:

(a) Whether acting alone or in collusionwith other persons; or

(b) While performing services for you orotherwise.

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(2) Any natural person who is furnished tem-porarily to you:

(a) To substitute for a permanent em-ployee, as defined in Paragraph (1)above, who is on leave; or

(b) To meet seasonal or short-termworkload conditions;

(3) Any natural person who is leased to youunder a written agreement between youand a labor leasing firm, to perform dutiesrelated to the conduct of your business,but does not mean a temporary employeeas defined in Paragraph (2) above;

(4) Any natural person who is a former em-ployee, director, partner, member, man-ager, representative or trustee retained asa consultant while performing services foryou; or

(5) Any natural person who is a guest stu-dent or intern pursuing studies or duties,excluding, however, any such personwhile having care and custody of propertyoutside any building you occupy in con-ducting your business.

But employee does not mean:

(1) Any agent, broker, factor, commissionmerchant, consignee, independent con-tractor or representative of the samegeneral character; or

(2) Any "manager", director or trustee exceptwhile performing acts coming within theusual duties of an employee.

4. Equipment Breakdown Protection Coverage

a. We will pay for direct loss of or damage toCovered Property caused by or resulting froma mechanical breakdown or electrical failureto pressure, mechanical or electrical machin-ery and equipment.

Mechanical breakdown or electrical failure topressure, mechanical or electrical machineryand equipment does not mean any:

(1) Malfunction including but not limited toadjustment, alignment, calibration, clean-ing or modification;

(2) Any of your partners, "members", "man-agers", officers or directors not in collu-sion with the employee;

of any dishonest act committed by thatemployee before or after being hired by you.

g. We will pay only for covered loss or damagesustained during the policy period and dis-covered no later than one year from the endof the policy period.

h. If you (or any predecessor in interest) sus-tained loss or damage during the policyperiod of any prior insurance that you couldhave recovered under that insurance exceptthat the time within which to discover loss ordamage had expired, we will pay for it underthis Optional Coverage, provided:

(1) This Optional Coverage became effectiveat the time of cancellation or terminationof the prior insurance; and

(2) The loss or damage would have beencovered by this Optional Coverage had itbeen in effect when the acts or eventscausing the loss or damage werecommitted or occurred.

i. The insurance under Paragraph h. above ispart of, not in addition to, the Limit of Insur-ance applying to this Optional Coverage andis limited to the lesser of the amount recov-erable under:

(1) This Optional Coverage as of its effectivedate; or

(2) The prior insurance had it remained ineffect.

j. With respect to the Employee Dishonesty Op-tional Coverage in Paragraph G.3., employeemeans:

(1) Any natural person:

(a) While in your service or for 30 daysafter termination of service;

(b) Who you compensate directly bysalary, wages or commissions; and

(c) Who you have the right to direct andcontrol while performing services foryou;

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Breakdown Protection Coverage supersedesany time deductible otherwise applicable tothe Business Income coverage provided bythis policy.

g. With respect to the coverage provided by thisOptional Coverage, Paragraph H. PropertyDefinitions is amended as follows:

1. "Computer" means:

a. Programmable electronic equipmentthat is used to store, retrieve andprocess data; and

b. Associated peripheral equipment thatprovides communication, includinginput and output functions such asprinting and auxiliary functions suchas data transmission.

"Computer" includes those used to operateproduction-type machinery or equipment.

h. Whenever any covered pressure, mechanicalor electrical machinery and equipment isfound to be in, or exposed to, a dangerouscondition, any of our representatives maysuspend coverage provided by this OptionalCoverage for loss from a mechanical break-down or electrical failure to that pressure,mechanical or electrical machinery andequipment.

However, coverage provided by this OptionalCoverage may be reinstated for loss from amechanical breakdown or electrical failure tothat pressure, mechanical or electricalmachinery and equipment if the reasons forthe suspension are found by any of ourrepresentatives to no longer exist.

We may suspend or reinstate this Optionalcoverage by mailing or delivering a writtennotification regarding the suspension orreinstatement to:

(1) Your last known address; or

(2) The address where the pressure, me-chanical or electrical machinery andequipment is located.

This notification will indicate the effectivedate of the suspension or reinstatement.

(2) Leakage at any valve, fitting, shaft seal,gland packing, joint or connection;

(3) Damage to any vacuum tube, gas tube,or brush; or

(4) The functioning of any safety or protectivedevice.

b. Paragraphs A.4.a.(1) and A.4.a.(2), Limita-tions, do not apply to this Optional Coverage.

c. With respect to the coverage provided by thisOptional Coverage, the following exclusionsin Paragraph B. Exclusions do not apply:

(1) Paragraph B.2.a., Electrical Apparatus;

(2) Paragraph B.2.d., Steam Apparatus; and

(3) Paragraph B.2.l.(6), MechanicalBreakdown.

d. With respect to the coverage provided by thisOptional Coverage, Paragraph G.1.c.(5) ofthe Outdoor Signs Optional Coverage doesnot apply.

e. If a dollar deductible is shown in the Decla-rations for this Optional Coverage, we will firstsubtract the applicable deductible amountfrom any loss we would otherwise pay. Wewill then pay the amount of loss in excess ofthe applicable deductible up to the applicablelimit for this coverage.

If no optional deductible is chosen for thisOptional Coverage, the Property Deductibleshown in the Declarations applies.

f. With respect to Additional Coverages 5.f.Business Income and 5.g. Extra Expense, ifthe 72-hour time period in the definition of"period of restoration" (hereinafter referred toas time deductible) is amended for this Op-tional Coverage as shown in the Declarations,we will not pay for any Business Income lossthat occurs during the consecutive number ofhours shown as the time deductible in theDeclarations immediately following a mechan-ical breakdown or electrical failure. If a timedeductible is shown in days, each day shallmean 24 consecutive hours.

With respect to the coverage provided by thisOptional Coverage, any time deductibleshown in the Declarations for Equipment

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b. Traveler's checks, register checks and moneyorders held for sale to the public.

8. "Operations" means your business activitiesoccurring at the described premises.

9. "Period of restoration":

a. Means the period of time that:

(1) Begins:

(a) 72 hours after the time of directphysical loss or damage for BusinessIncome Coverage; or

(b) Immediately after the time of directphysical loss or damage for ExtraExpense Coverage;

caused by or resulting from any CoveredCause of Loss at the described premises;and

(2) Ends on the earlier of:

(a) The date when the property at the de-scribed premises should be repaired,rebuilt or replaced with reasonablespeed and similar quality; or

(b) The date when business is resumedat a new permanent location.

b. Does not include any increased period re-quired due to the enforcement of or compli-ance with any ordinance or law that:

(1) Regulates the construction, use or repair,or requires the tearing down of anyproperty; or

(2) Requires any insured or others to test for,monitor, clean up, remove, contain, treat,detoxify or neutralize, or in any wayrespond to, or assess the effects of"pollutants".

The expiration date of this policy will not cut shortthe "period of restoration".

10. "Pollutants" means any solid, liquid, gaseous orthermal irritant or contaminant, including smoke,vapor, soot, fumes, acids, alkalis, chemicals andwaste. Waste includes materials to be recycled,reconditioned or reclaimed.

If the coverage provided by this OptionalCoverage is not reinstated, you will get a prorata refund of premium. But the suspensionwill be effective even if we have not yet madeor offered a refund.

H. Property Definitions

1. "Computer" means:

a. Programmable electronic equipment that isused to store, retrieve and process data; and

b. Associated peripheral equipment that pro-vides communication, including input andoutput functions such as printing and auxiliaryfunctions such as data transmission.

"Computer" does not include those used tooperate production-type machinery or equipment.

2. "Counterfeit money" means an imitation of"money" that is intended to deceive and to betaken as genuine.

3. "Electronic data" means information, facts or com-puter programs stored as or on, created or usedon, or transmitted to or from computer software(including systems and applications software), onhard or floppy disks, CD-ROMs, tapes, drives,cells, data processing devices or any otherrepositories of computer software which are usedwith electronically controlled equipment. The termcomputer programs, referred to in the foregoingdescription of electronic data, means a set ofrelated electronic instructions which direct the op-erations and functions of a "computer" or deviceconnected to it, which enable the "computer" ordevice to receive, process, store, retrieve or senddata.

4. "Fungi" means any type or form of fungus,including mold or mildew, and any mycotoxins,spores, scents or by-products produced orreleased by fungi.

5. "Manager" means a person serving in a directorialcapacity for a limited liability company.

6. "Member" means an owner of a limited liabilitycompany represented by its membership interest,who also may serve as a "manager".

7. "Money" means:

a. Currency, coins and bank notes in current useand having a face value; and

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municipal potable water supply system ormunicipal sanitary sewer system, if thebreakage or cracking is caused by wearand tear.

But water damage does not include loss ordamage otherwise excluded under the termsof the Water Exclusion. Therefore, for exam-ple, there is no coverage in the situation inwhich discharge or leakage of water resultsfrom the breaking apart or cracking of a pipewhich was caused by or related to weather-induced flooding, even if wear and tearcontributed to the breakage or cracking. Asanother example, and also in accordance withthe terms of the Water Exclusion, there is nocoverage for loss or damage caused by orrelated to weather-induced flooding whichfollows or is exacerbated by pipe breakage orcracking attributable to wear and tear.

To the extent that accidental discharge orleakage of water falls within the criteria setforth in c.(1) or c.(2) of this definition of "spec-ified causes of loss", such water is not subjectto the provisions of the Water Exclusion whichpreclude coverage for surface water or waterunder the ground surface.

13. "Stock" means merchandise held in storage or forsale, raw materials and in-process or finishedgoods, including supplies used in their packing orshipping.

14. "Valuable papers and records" means inscribed,printed or written:

a. Documents;

b. Manuscripts; and

c. Records;

including abstracts, books, deeds, drawings,films, maps or mortgages.

But "valuable papers and records" does not mean"money" or "securities".

SECTION II – LIABILITY

A. Coverages

1. Business Liability

a. We will pay those sums that the insuredbecomes legally obligated to pay as damagesbecause of "bodily injury", "property damage"

11. "Securities" means negotiable and nonnegotiableinstruments or contracts representing either"money" or other property and includes:

a. Tokens, tickets, revenue and other stamps(whether represented by actual stamps orunused value in a meter) in current use; and

b. Evidences of debt issued in connection withcredit or charge cards, which cards are notissued by you;

but does not include "money".

12. "Specified causes of loss" means the following:

Fire; lightning; explosion; windstorm or hail;smoke; aircraft or vehicles; riot or civil commotion;vandalism; leakage from fire extinguishing equip-ment; sinkhole collapse; volcanic action; fallingobjects; weight of snow, ice or sleet; waterdamage.

a. Sinkhole collapse means the sudden sinkingor collapse of land into underground emptyspaces created by the action of water onlimestone or dolomite. This cause of lossdoes not include:

(1) The cost of filling sinkholes; or

(2) Sinking or collapse of land into man-made underground cavities.

b. Falling objects does not include loss of ordamage to:

(1) Personal property in the open; or

(2) The interior of a building or structure, orproperty inside a building or structure,unless the roof or an outside wall of thebuilding or structure is first damaged by afalling object.

c. Water damage means:

(1) Accidental discharge or leakage of wateror steam as the direct result of the break-ing apart or cracking of any part of asystem or appliance (other than a sumpsystem including its related equipmentand parts) containing water or steam; and

(2) Accidental discharge or leakage of wateror waterborne material as the direct resultof the breaking apart or cracking of awater or sewer pipe that is located off thedescribed premises and is part of a

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(2) To "personal and advertising injury"caused by an offense arising out of yourbusiness, but only if the offense wascommitted in the "coverage territory"during the policy period.

c. "Bodily injury" or "property damage" whichoccurs during the policy period and was not,prior to the policy period, known to have oc-curred by any insured listed under ParagraphC.1. Who Is An Insured or any "employee"authorized by you to give or receive notice ofan "occurrence" or claim, includes any contin-uation, change or resumption of "bodily injury"or "property damage" after the end of thepolicy period.

d. "Bodily injury" or "property damage" will bedeemed to have been known to have oc-curred at the earliest time when any insuredlisted under Paragraph C.1. Who Is AnInsured or any "employee" authorized by youto give or receive notice of an "occurrence" orclaim:

(1) Reports all, or any part, of the "bodilyinjury" or "property damage" to us or anyother insurer;

(2) Receives a written or verbal demand orclaim for damages because of the "bodilyinjury" or "property damage"; or

(3) Becomes aware by any other means that"bodily injury" or "property damage" hasoccurred or has begun to occur.

e. Damages because of "bodily injury" includedamages claimed by any person or organi-zation for care, loss of services or deathresulting at any time from the "bodily injury".

f. Coverage Extension – SupplementaryPayments

(1) We will pay, with respect to any claim weinvestigate or settle, or any "suit" againstan insured we defend:

(a) All expenses we incur.

(b) Up to $250 for cost of bail bonds re-quired because of accidents or trafficlaw violations arising out of the use ofany vehicle to which BusinessLiability Coverage for "bodily injury"applies. We do not have to furnishthese bonds.

or "personal and advertising injury" to whichthis insurance applies. We will have the rightand duty to defend the insured against any"suit" seeking those damages. However, wewill have no duty to defend the insuredagainst any "suit" seeking damages for "bodi-ly injury", "property damage" or "personal andadvertising injury" to which this insurancedoes not apply. We may, at our discretion, in-vestigate any "occurrence" or any offense andsettle any claim or "suit" that may result. But:

(1) The amount we will pay for damages islimited as described in Paragraph D.Liability And Medical Expenses Limits OfInsurance in Section II – Liability; and

(2) Our right and duty to defend end whenwe have used up the applicable Limit ofInsurance in the payment of judgments orsettlements or medical expenses.

No other obligation or liability to pay sums orperform acts or services is covered unlessexplicitly provided for under Paragraph f. Cov-erage Extension – Supplementary Payments.

b. This insurance applies:

(1) To "bodily injury" and "property damage"only if:

(a) The "bodily injury" or "property dam-age" is caused by an "occurrence"that takes place in the "coverageterritory";

(b) The "bodily injury" or "property dam-age" occurs during the policy period;and

(c) Prior to the policy period, no insuredlisted under Paragraph C.1. Who IsAn Insured and no "employee"authorized by you to give or receivenotice of an "occurrence" or claim,knew that the "bodily injury" or "prop-erty damage" had occurred, in wholeor in part. If such a listed insured orauthorized "employee" knew, prior tothe policy period, that the "bodily inju-ry" or "property damage" occurred,then any continuation, change orresumption of such "bodily injury" or"property damage" during or after thepolicy period will be deemed to havebeen known before the policy period.

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(d) The allegations in the "suit" and theinformation we know about the"occurrence" are such that no conflictappears to exist between the inter-ests of the insured and the interestsof the indemnitee;

(e) The indemnitee and the insured askus to conduct and control the defenseof that indemnitee against such "suit"and agree that we can assign thesame counsel to defend the insuredand the indemnitee; and

(f) The indemnitee:

(i) Agrees in writing to:

i. Cooperate with us in theinvestigation, settlement ordefense of the "suit";

ii. Immediately send us copiesof any demands, notices,summonses or legal papersreceived in connection withthe "suit";

iii. Notify any other insurerwhose coverage is availableto the indemnitee; and

iv. Cooperate with us with re-spect to coordinating otherapplicable insurance availa-ble to the indemnitee; and

(ii) Provides us with written author-ization to:

i. Obtain records and otherinformation related to the"suit"; and

ii. Conduct and control thedefense of the indemnitee insuch "suit".

(3) So long as the conditions in Paragraph(2) are met, attorneys' fees incurred by usin the defense of that indemnitee, nec-essary litigation expenses incurred by usand necessary litigation expenses in-curred by the indemnitee at our requestwill be paid as Supplementary Payments.

(c) The cost of bonds to release attach-ments, but only for bond amountswithin our Limit of Insurance. We donot have to furnish these bonds.

(d) All reasonable expenses incurred bythe insured at our request to assist usin the investigation or defense of theclaim or "suit", including actual loss ofearnings up to $250 a day because oftime off from work.

(e) All court costs taxed against the in-sured in the "suit". However, thesepayments do not include attorneys'fees or attorneys' expenses taxedagainst the insured.

(f) Prejudgment interest awardedagainst the insured on that part of thejudgment we pay. If we make an offerto pay the Limit of Insurance, we willnot pay any prejudgment interestbased on that period of time after theoffer.

(g) All interest on the full amount of anyjudgment that accrues after entry ofthe judgment and before we havepaid, offered to pay, or deposited incourt the part of the judgment that iswithin our Limit of Insurance.

These payments will not reduce the limitof liability.

(2) If we defend an insured against a "suit"and an indemnitee of the insured is alsonamed as a party to the "suit", we willdefend that indemnitee if all of thefollowing conditions are met:

(a) The "suit" against the indemniteeseeks damages for which the insuredhas assumed the liability of the in-demnitee in a contract or agreementthat is an "insured contract";

(b) This insurance applies to such liabilityassumed by the insured;

(c) The obligation to defend, or the costof the defense of, that indemnitee,has also been assumed by the in-sured in the same "insured contract";

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(2) Necessary medical, surgical, X-ray anddental services, including prostheticdevices; and

(3) Necessary ambulance, hospital, profes-sional nursing and funeral services.

B. Exclusions

1. Applicable To Business Liability Coverage

This insurance does not apply to:

a. Expected Or Intended Injury

"Bodily injury" or "property damage" expectedor intended from the standpoint of the in-sured. This exclusion does not apply to "bod-ily injury" resulting from the use of reasonableforce to protect persons or property.

b. Contractual Liability

"Bodily injury" or "property damage" for whichthe insured is obligated to pay damages byreason of the assumption of liability in acontract or agreement. This exclusion doesnot apply to liability for damages:

(1) That the insured would have in theabsence of the contract or agreement; or

(2) Assumed in a contract or agreement thatis an "insured contract", provided the"bodily injury" or "property damage"occurs subsequent to the execution of thecontract or agreement. Solely for thepurposes of liability assumed in an "in-sured contract", reasonable attorneys'fees and necessary litigation expensesincurred by or for a party other than aninsured are deemed to be damagesbecause of "bodily injury" or "propertydamage", provided:

(a) Liability to such party for, or for thecost of, that party's defense has alsobeen assumed in the same "insuredcontract"; and

(b) Such attorney fees and litigation ex-penses are for defense of that partyagainst a civil or alternative disputeresolution proceeding in which dam-ages to which this insurance appliesare alleged.

Notwithstanding the provisions of Para-graph B.1.b.(2) Exclusions in Section II –Liability, such payments will not bedeemed to be damages for "bodily injury"and "property damage" and will notreduce the Limits of Insurance.

Our obligation to defend an insured'sindemnitee and to pay for attorneys' feesand necessary litigation expenses asSupplementary Payments ends when:

(a) We have used up the applicable Limitof Insurance in the payment of judg-ments or settlements; or

(b) The conditions set forth above, or theterms of the agreement described inParagraph (2)(f) above, are no longermet.

2. Medical Expenses

a. We will pay medical expenses as describedbelow for "bodily injury" caused by anaccident:

(1) On premises you own or rent;

(2) On ways next to premises you own orrent; or

(3) Because of your operations;

provided that:

(a) The accident takes place in the "cov-erage territory" and during the policyperiod;

(b) The expenses are incurred andreported to us within one year of thedate of the accident; and

(c) The injured person submits to exam-ination, at our expense, by physiciansof our choice as often as we reason-ably require.

b. We will make these payments regardless offault. These payments will not exceed theLimits of Insurance of Section II – Liability.We will pay reasonable expenses for:

(1) First aid administered at the time of anaccident;

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(a) Employment by the insured; or

(b) Performing duties related to the con-duct of the insured's business; or

(2) The spouse, child, parent, brother or sis-ter of that "employee" as a consequenceof Paragraph (1) above.

This exclusion applies whether the insuredmay be liable as an employer or in any othercapacity and to any obligation to sharedamages with or repay someone else whomust pay damages because of the injury.

This exclusion does not apply to liabilityassumed by the insured under an "insuredcontract".

f. Pollution

(1) "Bodily injury" or "property damage" aris-ing out of the actual, alleged or threat-ened discharge, dispersal, seepage, mi-gration, release or escape of "pollutants":

(a) At or from any premises, site orlocation which is or was at any timeowned or occupied by, or rented orloaned to, any insured. However, thissubparagraph does not apply to:

(i) "Bodily injury" if sustained withina building and caused by smoke,fumes, vapor or soot produced byor originating from equipment thatis used to heat, cool or dehu-midify the building, or equipmentthat is used to heat water forpersonal use, by the building'soccupants or their guests;

(ii) "Bodily injury" or "property dam-age" for which you may be heldliable, if you are a contractor andthe owner or lessee of suchpremises, site or location hasbeen added to your policy as anadditional insured with respect toyour ongoing operations per-formed for that additional insuredat that premises, site or locationand such premises, site or loca-tion is not and never was ownedor occupied by, or rented orloaned to, any insured, other thanthat additional insured; or

c. Liquor Liability

"Bodily injury" or "property damage" for whichany insured may be held liable by reason of:

(1) Causing or contributing to the intoxicationof any person;

(2) The furnishing of alcoholic beverages to aperson under the legal drinking age orunder the influence of alcohol; or

(3) Any statute, ordinance or regulationrelating to the sale, gift, distribution or useof alcoholic beverages.

This exclusion applies even if the claimsallege negligence or other wrongdoing in:

(a) The supervision, hiring, employment,training or monitoring of others by aninsured; or

(b) Providing or failing to provide trans-portation with respect to any personthat may be under the influence ofalcohol;

if the "occurrence" which caused the "bodilyinjury" or "property damage", involved thatwhich is described in Paragraph (1), (2) or (3)above.

However, this exclusion applies only if youare in the business of manufacturing, distrib-uting, selling, serving or furnishing alcoholicbeverages. For the purposes of this exclu-sion, permitting a person to bring alcoholicbeverages on your premises, for consumptionon your premises, whether or not a fee ischarged or a license is required for suchactivity, is not by itself considered thebusiness of selling, serving or furnishingalcoholic beverages.

d. Workers' Compensation And Similar Laws

Any obligation of the insured under a workers'compensation, disability benefits or unem-ployment compensation law or any similarlaw.

e. Employer's Liability

"Bodily injury" to:

(1) An "employee" of the insured arising outof and in the course of:

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(ii) "Bodily injury" or "property dam-age" sustained within a buildingand caused by the release ofgases, fumes or vapors from ma-terials brought into that building inconnection with operations beingperformed by you or on yourbehalf by a contractor or subcon-tractor; or

(iii) "Bodily injury" or "property dam-age" arising out of heat, smoke orfumes from a "hostile fire"; or

(e) At or from any premises, site orlocation on which any insured or anycontractors or subcontractors workingdirectly or indirectly on any insured'sbehalf are performing operations ifthe operations are to test for, monitor,clean up, remove, contain, treat,detoxify or neutralize, or in any wayrespond to, or assess the effects of,"pollutants".

(2) Any loss, cost or expense arising out ofany:

(a) Request, demand, order or statutoryor regulatory requirement that anyinsured or others test for, monitor,clean up, remove, contain, treat,detoxify or neutralize, or in any wayrespond to, or assess the effects of,"pollutants"; or

(b) Claim or "suit" by or on behalf of agovernmental authority for damagesbecause of testing for, monitoring,cleaning up, removing, containing,treating, detoxifying or neutralizing, orin any way responding to, or asses-sing the effects of, "pollutants".

However, this paragraph does not applyto liability for damages because of "prop-erty damage" that the insured would havein the absence of such request, demand,order or statutory or regulatory require-ment or such claim or "suit" by or onbehalf of a governmental authority.

g. Aircraft, Auto Or Watercraft

"Bodily injury" or "property damage" arisingout of the ownership, maintenance, use orentrustment to others of any aircraft, "auto" or

(iii) "Bodily injury" or "property dam-age" arising out of heat, smoke orfumes from a "hostile fire";

(b) At or from any premises, site orlocation which is or was at any timeused by or for any insured or othersfor the handling, storage, disposal,processing or treatment of waste;

(c) Which are or were at any time trans-ported, handled, stored, treated, dis-posed of, or processed as waste byor for:

(i) Any insured; or

(ii) Any person or organization forwhom you may be legallyresponsible;

(d) At or from any premises, site or loca-tion on which any insured or anycontractors or subcontractors workingdirectly or indirectly on any insured'sbehalf are performing operations ifthe "pollutants" are brought on or tothe premises, site or location in con-nection with such operations by suchinsured, contractor or subcontractor.However, this subparagraph does notapply to:

(i) "Bodily injury" or "property dam-age" arising out of the escape offuels, lubricants or other opera-ting fluids which are needed toperform the normal electrical,hydraulic or mechanical functionsnecessary for the operation of"mobile equipment" or its parts, ifsuch fuels, lubricants or otheroperating fluids escape from avehicle part designed to hold,store or receive them. This ex-ception does not apply if the"bodily injury" or "property dam-age" arises out of the intentionaldischarge, dispersal or release ofthe fuels, lubricants or other oper-ating fluids, or if such fuels, lubri-cants or other operating fluids arebrought on or to the premises,site or location with the intent thatthey be discharged, dispersed orreleased as part of the operationsbeing performed by such insured,contractor or subcontractor;

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(ii) Air compressors, pumps and gen-erators, including spraying, weld-ing, building cleaning, geophys-ical exploration, lighting and wellservicing equipment.

h. Mobile Equipment

"Bodily injury" or "property damage" arisingout of:

(1) The transportation of "mobile equipment"by an "auto" owned or operated by orrented or loaned to any insured; or

(2) The use of "mobile equipment" in, orwhile in practice for, or while being pre-pared for, any prearranged racing, speed,demolition or stunting activity.

i. War

"Bodily injury", "property damage" or "person-al and advertising injury", however caused,arising, directly or indirectly, out of:

(1) War, including undeclared or civil war;

(2) Warlike action by a military force,including action in hindering or defendingagainst an actual or expected attack, byany government, sovereign or otherauthority using military personnel or otheragents; or

(3) Insurrection, rebellion, revolution, usurpedpower, or action taken by governmentauthority in hindering or defendingagainst any of these.

j. Professional Services

"Bodily injury", "property damage" or "per-sonal and advertising injury" caused by therendering or failure to render any professionalservice. This includes but is not limited to:

(1) Legal, accounting or advertising services;

(2) Preparing, approving, or failing to prepareor approve maps, drawings, opinions,reports, surveys, change orders, designsor specifications;

(3) Supervisory, inspection or engineeringservices;

watercraft owned or operated by or rented orloaned to any insured. Use includes operationand "loading or unloading".

This exclusion applies even if the claimsallege negligence or other wrongdoing in thesupervision, hiring, employment, training ormonitoring of others by an insured, if the"occurrence" which caused the "bodily injury"or "property damage" involved the ownership,maintenance, use or entrustment to others ofany aircraft, "auto" or watercraft that is ownedor operated by or rented or loaned to anyinsured.

This exclusion does not apply to:

(1) A watercraft while ashore on premisesyou own or rent;

(2) A watercraft you do not own that is:

(a) Less than 51 feet long; and

(b) Not being used to carry persons orproperty for a charge;

(3) Parking an "auto" on, or on the ways nextto, premises you own or rent, providedthe "auto" is not owned by or rented orloaned to you or the insured;

(4) Liability assumed under any "insuredcontract" for the ownership, maintenanceor use of aircraft or watercraft; or

(5) "Bodily injury" or "property damage"arising out of:

(a) The operation of machinery or equip-ment that is attached to, or part of, aland vehicle that would qualify underthe definition of "mobile equipment" ifit were not subject to a compulsory orfinancial responsibility law or othermotor vehicle insurance or motorvehicle registration law where it islicensed or principally garaged; or

(b) The operation of any of the followingmachinery or equipment:

(i) Cherry pickers and similar de-vices mounted on automobile ortruck chassis and used to raise orlower workers; and

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your behalf is performing operations, ifthe "property damage" arises out of thoseoperations; or

(6) That particular part of any property thatmust be restored, repaired or replacedbecause "your work" was incorrectlyperformed on it.

Paragraphs (1), (3) and (4) of this exclusiondo not apply to "property damage" (other thandamage by fire) to premises, including thecontents of such premises, rented to you for aperiod of seven or fewer consecutive days. Aseparate Limit of Insurance applies to Dam-age To Premises Rented To You as de-scribed in Paragraph D. Liability And MedicalExpenses Limits Of Insurance in Section II –Liability.

Paragraph (2) of this exclusion does not applyif the premises are "your work" and were nev-er occupied, rented or held for rental by you.

Paragraphs (3), (4), (5) and (6) of this exclu-sion do not apply to liability assumed under asidetrack agreement.

Paragraph (6) of this exclusion does not ap-ply to "property damage" included in the"products-completed operations hazard".

l. Damage To Your Product

"Property damage" to "your product" arisingout of it or any part of it.

m. Damage To Your Work

"Property damage" to "your work" arising outof it or any part of it and included in the"products-completed operations hazard".

This exclusion does not apply if the damagedwork or the work out of which the damagearises was performed on your behalf by asubcontractor.

n. Damage To Impaired Property Or PropertyNot Physically Injured

"Property damage" to "impaired property" orproperty that has not been physically injured,arising out of:

(1) A defect, deficiency, inadequacy ordangerous condition in "your product" or"your work"; or

(4) Medical, surgical, dental, X-ray or nursingservices treatment, advice or instruction;

(5) Any health or therapeutic service treat-ment, advice or instruction;

(6) Any service, treatment, advice or instruc-tion for the purpose of appearance or skinenhancement, hair removal or replace-ment or personal grooming;

(7) Optometry or optical or hearing aid serv-ices including the prescribing, prepara-tion, fitting, demonstration or distributionof ophthalmic lenses and similar productsor hearing aid devices;

(8) Body piercing services; and

(9) Services in the practice of pharmacy.

This exclusion applies even if the claimsallege negligence or other wrongdoing in thesupervision, hiring, employment, training ormonitoring of others by an insured, if the"occurrence" which caused the "bodily injury"or "property damage", or the offense whichcaused the "personal and advertising injury",involved the rendering or failure to render ofany professional service.

k. Damage To Property

"Property damage" to:

(1) Property you own, rent or occupy, includ-ing any costs or expenses incurred byyou, or any other person, organization orentity, for repair, replacement, enhance-ment, restoration or maintenance of suchproperty for any reason, including preven-tion of injury to a person or damage toanother's property;

(2) Premises you sell, give away or abandon,if the "property damage" arises out of anypart of those premises;

(3) Property loaned to you;

(4) Personal property in the care, custody orcontrol of the insured;

(5) That particular part of real property onwhich you or any contractor or subcon-tractor working directly or indirectly on

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(5) Arising out of a breach of contract, exceptan implied contract to use another'sadvertising idea in your "advertisement";

(6) Arising out of the failure of goods,products or services to conform with anystatement of quality or performance madein your "advertisement";

(7) Arising out of the wrong description of theprice of goods, products or servicesstated in your "advertisement";

(8) Committed by an insured whose businessis:

(a) Advertising, broadcasting, publishingor telecasting;

(b) Designing or determining content ofweb sites for others; or

(c) An Internet search, access, contentor service provider.

However, this exclusion does not apply toParagraphs 14.a., b. and c. of "personaland advertising injury" under ParagraphF. Liability And Medical ExpensesDefinitions.

For the purposes of this exclusion, theplacing of frames, borders or links, oradvertising, for you or others anywhereon the Internet, by itself, is not consideredthe business of advertising, broadcasting,publishing or telecasting;

(9) Arising out of the actual, alleged orthreatened discharge, dispersal, seepage,migration, release or escape of "pollu-tants" at any time;

(10)With respect to any loss, cost or expensearising out of any:

(a) Request, demand or order that anyinsured or others test for, monitor,clean up, remove, contain, treat, de-toxify or neutralize, or in any wayrespond to, or assess the effects of,"pollutants"; or

(b) Claim or "suit" by or on behalf of agovernmental authority for damagesbecause of testing for, monitoring,cleaning up, removing, containing,

(2) A delay or failure by you or anyone actingon your behalf to perform a contract oragreement in accordance with its terms.

This exclusion does not apply to the loss ofuse of other property arising out of suddenand accidental physical injury to "yourproduct" or "your work" after it has been put toits intended use.

o. Recall Of Products, Work Or ImpairedProperty

Damages claimed for any loss, cost orexpense incurred by you or others for the lossof use, withdrawal, recall, inspection, repair,replacement, adjustment, removal or disposalof:

(1) "Your product";

(2) "Your work"; or

(3) "Impaired property";

if such product, work or property is withdrawnor recalled from the market or from use byany person or organization because of aknown or suspected defect, deficiency, inade-quacy or dangerous condition in it.

p. Personal And Advertising Injury

"Personal and advertising injury":

(1) Caused by or at the direction of theinsured with the knowledge that the actwould violate the rights of another andwould inflict "personal and advertisinginjury";

(2) Arising out of oral or written publication, inany manner, of material, if done by or atthe direction of the insured with knowl-edge of its falsity;

(3) Arising out of oral or written publication, inany manner, of material whose first publi-cation took place before the beginning ofthe policy period;

(4) For which the insured has assumedliability in a contract or agreement. Thisexclusion does not apply to liability fordamages that the insured would have inthe absence of the contract or agreement;

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r. Criminal Acts

"Personal and advertising injury" arising out ofa criminal act committed by or at the directionof the insured.

s. Recording And Distribution Of Material OrInformation In Violation Of Law

"Bodily injury", "property damage" or "per-sonal and advertising injury" arising directly orindirectly out of any action or omission thatviolates or is alleged to violate:

(1) The Telephone Consumer Protection Act(TCPA), including any amendment of oraddition to such law;

(2) The CAN-SPAM Act of 2003, includingany amendment of or addition to suchlaw;

(3) The Fair Credit Reporting Act (FCRA),and any amendment of or addition tosuch law, including the Fair and AccurateCredit Transaction Act (FACTA); or

(4) Any federal, state or local statute, ordi-nance or regulation, other than the TCPA,CAN-SPAM Act of 2003 or FCRA andtheir amendments and additions, thataddresses, prohibits, or limits the printing,dissemination, disposal, collecting, rec-ording, sending, transmitting, communi-cating or distribution of material orinformation.

Exclusions c., d., e., f., g., h., i., k., l., m., n. ando. in Section II – Liability do not apply to damageby fire to premises while rented to you, or tempo-rarily occupied by you with permission of theowner. A separate Damage To Premises RentedTo You Limit of Insurance applies to this coverageas described in Paragraph D. Liability AndMedical Expenses Limits of Insurance in SectionII – Liability.

2. Applicable To Medical Expenses Coverage

We will not pay expenses for "bodily injury":

a. To any insured, except "volunteer workers".

b. To a person hired to do work for or on behalfof any insured or a tenant of any insured.

treating, detoxifying or neutralizing,or in any way responding to, or as-sessing the effects of, "pollutants";

(11) Arising out of an electronic chatroom orbulletin board the insured hosts, ownsor over which the insured exercisescontrol;

(12) Arising out of the infringement of copy-right, patent, trademark, trade secret orother intellectual property rights. Underthis exclusion, such other intellectualproperty rights do not include the use ofanother's advertising idea in your"advertisement".

However, this exclusion does not applyto infringement, in your "advertisement",of copyright, trade dress or slogan;

(13) Arising out of the unauthorized use ofanother's name or product in youre-mail address, domain name or meta-tags, or any other similar tactics tomislead another's potential customers.

q. Electronic Data

Damages arising out of the loss of, loss ofuse of, damage to, corruption of, inability toaccess, or inability to manipulate electronicdata.

However, this exclusion does not apply toliability for damages because of "bodilyinjury".

As used in this exclusion, electronic datameans information, facts or computer pro-grams stored as or on, created or used on,or transmitted to or from computer software(including systems and applications soft-ware), on hard or floppy disks, CD-ROMs,tapes, drives, cells, data processing devicesor any other repositories of computer soft-ware which are used with electronicallycontrolled equipment. The term computerprograms, referred to in the foregoingdescription of electronic data, means a setof related electronic instructions which directthe operations and functions of a computeror device connected to it, which enable thecomputer or device to receive, process,store, retrieve or send data.

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b. Under Medical Expenses Coverage, to ex-penses incurred with respect to "bodily injury"resulting from the "hazardous properties" of"nuclear material" and arising out of theoperation of a "nuclear facility" by any personor organization.

c. Under Business Liability Coverage, to "bodilyinjury" or "property damage" resulting fromthe "hazardous properties" of the "nuclearmaterial"; if:

(1) The "nuclear material":

(a) Is at any "nuclear facility" owned by,or operated by or on behalf of, aninsured; or

(b) Has been discharged or dispersedtherefrom;

(2) The "nuclear material" is contained in"spent fuel" or "waste" at any timepossessed, handled, used, processed,stored, transported or disposed of by oron behalf of an insured; or

(3) The "bodily injury" or "property damage"arises out of the furnishing by an insuredof services, materials, parts or equipmentin connection with the planning, con-struction, maintenance, operation or useof any "nuclear facility"; but if such facilityis located within the United States ofAmerica, its territories or possessions orCanada, this Exclusion (3) applies only to"property damage" to such "nuclearfacility" and any property thereat.

d. As used in this exclusion:

(1) "By-product material" has the meaninggiven it in the Atomic Energy Act of 1954or in any law amendatory thereof;

(2) "Hazardous properties" include radio-active, toxic or explosive properties;

(3) "Nuclear facility" means:

(a) Any "nuclear reactor";

(b) Any equipment or device designed orused for:

(i) Separating the isotopes of urani-um or plutonium;

c. To a person injured on that part of premisesyou own or rent that the person normallyoccupies.

d. To a person, whether or not an "employee" ofany insured, if benefits for the "bodily injury"are payable or must be provided under aworkers' compensation or disability benefitslaw or a similar law.

e. To a person injured while practicing, instruct-ing or participating in any physical exercisesor games, sports or athletic contests.

f. Included within the "products-completed oper-ations hazard".

g. Excluded under Business Liability Coverage.

3. Applicable To Both Business LiabilityCoverage And Medical Expenses Coverage –Nuclear Energy Liability Exclusion

This insurance does not apply:

a. Under Business Liability Coverage, to "bodilyinjury" or "property damage":

(1) With respect to which an insured underthe policy is also an insured under anuclear energy liability policy issued bythe Nuclear Energy Liability InsuranceAssociation, Mutual Atomic Energy Liabil-ity Underwriters or Nuclear InsuranceAssociation of Canada, or would be aninsured under any such policy but for itstermination upon exhaustion of its limit ofliability; or

(2) Resulting from the "hazardous properties"of "nuclear material" and with respect towhich:

(a) Any person or organization is re-quired to maintain financial protectionpursuant to the Atomic Energy Act of1954, or any law amendatory thereof;or

(b) The insured is, or had this policy notbeen issued would be, entitled toindemnity from the United States ofAmerica, or any agency thereof,under any agreement entered into bythe United States of America, or anyagency thereof, with any person ororganization.

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(a) Containing "by-product material"other than the tailings or wastes pro-duced by the extraction or concentra-tion of uranium or thorium from anyore processed primarily for its "sourcematerial" content; and

(b) Resulting from the operation by anyperson or organization of any "nucle-ar facility" included under Paragraphs(a) and (b) of the definition of"nuclear facility".

C. Who Is An Insured

1. If you are designated in the Declarations as:

a. An individual, you and your spouse are in-sureds, but only with respect to the conduct ofa business of which you are the sole owner.

b. A partnership or joint venture, you are aninsured. Your members, your partners andtheir spouses are also insureds, but only withrespect to the conduct of your business.

c. A limited liability company, you are an in-sured. Your members are also insureds, butonly with respect to the conduct of your busi-ness. Your managers are insureds, but onlywith respect to their duties as your managers.

d. An organization other than a partnership, jointventure or limited liability company, you arean insured. Your "executive officers" anddirectors are insureds, but only with respect totheir duties as your officers or directors. Yourstockholders are also insureds, but only withrespect to their liability as stockholders.

e. A trust, you are an insured. Your trustees arealso insureds, but only with respect to theirduties as trustees.

2. Each of the following is also an insured:

a. Your "volunteer workers" only while perform-ing duties related to the conduct of yourbusiness, or your "employees", other thaneither your "executive officers" (if you are anorganization other than a partnership, jointventure or limited liability company) or yourmanagers (if you are a limited liability com-pany), but only for acts within the scope oftheir employment by you or while performingduties related to the conduct of your business.However, none of these "employees" or"volunteer workers" are insureds for:

(i) Separating the isotopes of urani-um or plutonium;

(ii) Processing or utilizing "spentfuel"; or

(iii) Handling, processing or packag-ing "waste";

(c) Any equipment or device used for theprocessing, fabricating or alloying of"special nuclear material" if at anytime the total amount of such materialin the custody of the insured at thepremises where such equipment ordevice is located consists of or con-tains more than 25 grams of plutoni-um or uranium 233 or any combina-tion thereof, or more than 250 gramsof uranium 235;

(d) Any structure, basin, excavation,premises or place prepared or usedfor the storage or disposal of "waste";

and includes the site on which any of theforegoing is located, all operations con-ducted on such site and all premises usedfor such operations;

(4) "Nuclear material" means "source ma-terial", "special nuclear material" or"by-product material";

(5) "Nuclear reactor" means any apparatusdesigned or used to sustain nuclearfission in a self-supporting chain reactionor to contain a critical mass of fissionablematerial;

(6) "Property damage" includes all forms ofradioactive contamination of property;

(7) "Source material" has the meaning givenit in the Atomic Energy Act of 1954 or inany law amendatory thereof;

(8) "Special nuclear material" has the mean-ing given it in the Atomic Energy Act of1954 or in any law amendatory thereof;

(9) "Spent fuel" means any fuel element orfuel component, solid or liquid, which hasbeen used or exposed to radiation in a"nuclear reactor";

(10)"Waste" means any waste material:

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d. Your legal representative if you die, but onlywith respect to duties as such. That repre-sentative will have all your rights and dutiesunder this policy.

No person or organization is an insured with respectto the conduct of any current or past partnership, jointventure or limited liability company that is not shownas a Named Insured in the Declarations.

D. Liability And Medical Expenses Limits OfInsurance

1. The Limits of Insurance of Section II – Liabilityshown in the Declarations and the rules below fixthe most we will pay regardless of the number of:

a. Insureds;

b. Claims made or "suits" brought; or

c. Persons or organizations making claims orbringing "suits".

2. The most we will pay for the sum of all damagesbecause of all:

a. "Bodily injury", "property damage" and med-ical expenses arising out of any one"occurrence"; and

b. "Personal and advertising injury" sustained byany one person or organization;

is the Liability and Medical Expenses limit shownin the Declarations. But the most we will pay forall medical expenses because of "bodily injury"sustained by any one person is the MedicalExpenses limit shown in the Declarations.

3. The most we will pay under Business LiabilityCoverage for damages because of "property dam-age" to a premises while rented to you or in thecase of fire while rented to you or temporarilyoccupied by you with permission of the owner isthe applicable Damage To Premises Rented ToYou limit shown for that premises in the Declara-tions. For a premises temporarily occupied byyou, the applicable limit will be the highest Dam-age To Premises Rented To You limit shown inthe Declarations.

4. Aggregate Limits

The most we will pay for:

(1) "Bodily injury" or "personal and adver-tising injury":

(a) To you, to your partners or members(if you are a partnership or jointventure), to your members (if you area limited liability company), or to aco-"employee" while in the course ofhis or her employment or performingduties related to the conduct of yourbusiness, or to your other "volunteerworkers" while performing duties re-lated to the conduct of your business;

(b) To the spouse, child, parent, brotheror sister of that co-"employee" as aconsequence of Paragraph (a) above;

(c) For which there is any obligation toshare damages with or repay some-one else who must pay damagesbecause of the injury described inParagraph (a) or (b); or

(d) Arising out of his or her providing orfailing to provide professional healthcare services.

(2) "Property damage" to property:

(a) Owned, occupied or used by;

(b) Rented to, in the care, custody orcontrol of, or over which physicalcontrol is being exercised for anypurpose by;

you, any of your "employees", "volunteerworkers", any partner or member (if youare a partnership or joint venture), or anymember (if you are a limited liabilitycompany).

b. Any person (other than your "employee" or"volunteer worker"), or any organization whileacting as your real estate manager.

c. Any person or organization having propertemporary custody of your property if you die,but only:

(1) With respect to liability arising out of themaintenance or use of that property; and

(2) Until your legal representative has beenappointed.

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(2) The names and addresses of any injuredpersons and witnesses; and

(3) The nature and location of any injury ordamage arising out of the "occurrence" oroffense.

b. If a claim is made or "suit" is brought againstany insured, you must:

(1) Immediately record the specifics of theclaim or "suit" and the date received; and

(2) Notify us as soon as practicable.

You must see to it that we receive writtennotice of the claim or "suit" as soon aspracticable.

c. You and any other involved insured must:

(1) Immediately send us copies of anydemands, notices, summonses or legalpapers received in connection with theclaim or "suit";

(2) Authorize us to obtain records and otherinformation;

(3) Cooperate with us in the investigation orsettlement of the claim or defense againstthe "suit"; and

(4) Assist us, upon our request, in the en-forcement of any right against any personor organization that may be liable to theinsured because of injury or damage towhich this insurance may also apply.

d. No insured will, except at that insured's owncost, voluntarily make a payment, assumeany obligation, or incur any expense, otherthan for first aid, without our consent.

3. Legal Action Against Us

No person or organization has a right under thispolicy:

a. To join us as a party or otherwise bring usinto a "suit" asking for damages from aninsured; or

b. To sue us on this policy unless all of its termshave been fully complied with.

a. All "bodily injury" and "property damage" thatis included in the "products-completed opera-tions hazard" is twice the Liability and MedicalExpenses limit.

b. All:

(1) "Bodily injury" and "property damage" ex-cept damages because of "bodily injury"or "property damage" included in the"products-completed operations hazard";

(2) Plus medical expenses;

(3) Plus all "personal and advertising injury"caused by offenses committed;

is twice the Liability and Medical Expenseslimit.

Subject to Paragraph a. or b. above, whicheverapplies, the Damage To Premises Rented To Youlimit is the most we will pay for damages becauseof "property damage" to any one premises, whilerented to you, or in the case of fire, while rentedto you or temporarily occupied by you with per-mission of the owner.

The Limits of Insurance of Section II – Liabilityapply separately to each consecutive annualperiod and to any remaining period of less than12 months, starting with the beginning of thepolicy period shown in the Declarations, unlessthe policy period is extended after issuance for anadditional period of less than 12 months. In thatcase, the additional period will be deemed part ofthe last preceding period for purposes ofdetermining the Limits of Insurance.

E. Liability And Medical Expenses GeneralConditions

1. Bankruptcy

Bankruptcy or insolvency of the insured or of theinsured's estate will not relieve us of ourobligations under this policy.

2. Duties In The Event Of Occurrence, Offense,Claim Or Suit

a. You must see to it that we are notified assoon as practicable of an "occurrence" or anoffense which may result in a claim. To theextent possible, notice should include:

(1) How, when and where the "occurrence"or offense took place;

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4. "Coverage territory" means:

a. The United States of America (including itsterritories and possessions), Puerto Rico andCanada;

b. International waters or airspace, but only ifthe injury or damage occurs in the course oftravel or transportation between any placesincluded in Paragraph a. above; or

c. All other parts of the world if the injury ordamage arises out of:

(1) Goods or products made or sold by you inthe territory described in Paragraph a.above;

(2) The activities of a person whose home isin the territory described in Paragraph a.above, but is away for a short time onyour business; or

(3) "Personal and advertising injury" offensesthat take place through the Internet orsimilar electronic means of communi-cation;

provided the insured's responsibility to paydamages is determined in a "suit" on the merits inthe territory described in Paragraph a. above or ina settlement we agree to.

5. "Employee" includes a "leased worker". "Em-ployee" does not include a "temporary worker".

6. "Executive officer" means a person holding any ofthe officer positions created by your charter,constitution, bylaws or any other similar governingdocument.

7. "Hostile fire" means one which becomes uncon-trollable or breaks out from where it was intendedto be.

8. "Impaired property" means tangible property,other than "your product" or "your work", thatcannot be used or is less useful because:

a. It incorporates "your product" or "your work"that is known or thought to be defective,deficient, inadequate or dangerous; or

b. You have failed to fulfill the terms of acontract or agreement;

if such property can be restored to use by:

A person or organization may sue us to recoveron an agreed settlement or on a final judgmentagainst an insured; but we will not be liable fordamages that are not payable under the terms ofthis policy or that are in excess of the applicableLimit of Insurance. An agreed settlement means asettlement and release of liability signed by us,the insured and the claimant or the claimant'slegal representative.

4. Separation Of Insureds

Except with respect to the Limits of Insurance ofSection II – Liability, and any rights or duties spe-cifically assigned in this policy to the first NamedInsured, this insurance applies:

a. As if each Named Insured were the onlyNamed Insured; and

b. Separately to each insured against whomclaim is made or "suit" is brought.

F. Liability And Medical Expenses Definitions

1. "Advertisement" means a notice that is broadcastor published to the general public or specificmarket segments about your goods, products orservices for the purpose of attracting customersor supporters. For the purposes of this definition:

a. Notices that are published include materialplaced on the Internet or on similar electronicmeans of communication; and

b. Regarding web sites, only that part of a website that is about your goods, products orservices for the purposes of attractingcustomers or supporters is considered anadvertisement.

2. "Auto" means:

a. A land motor vehicle, trailer or semitrailerdesigned for travel on public roads, includingany attached machinery or equipment; or

b. Any other land vehicle that is subject to acompulsory or financial responsibility law orother motor vehicle insurance or motorvehicle registration law where it is licensed orprincipally garaged.

However, "auto" does not include "mobileequipment".

3. "Bodily injury" means bodily injury, sickness ordisease sustained by a person, including deathresulting from any of these at any time.

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(b) Giving directions or instructions, orfailing to give them, if that is theprimary cause of the injury ordamage; or

(3) Under which the insured, if an architect,engineer or surveyor, assumes liability foran injury or damage arising out of theinsured's rendering or failure to renderprofessional services, including thoselisted in Paragraph (2) above and super-visory, inspection or engineering services.

10. "Leased worker" means a person leased to youby a labor leasing firm under an agreement be-tween you and the labor leasing firm, to performduties related to the conduct of your business."Leased worker" does not include a "temporaryworker".

11. "Loading or unloading" means the handling ofproperty:

a. After it is moved from the place where it isaccepted for movement into or onto anaircraft, watercraft or "auto";

b. While it is in or on an aircraft, watercraft or"auto"; or

c. While it is being moved from an aircraft,watercraft or "auto" to the place where it isfinally delivered;

but "loading or unloading" does not include themovement of property by means of a mechanicaldevice, other than a hand truck, that is notattached to the aircraft, watercraft or "auto".

12. "Mobile equipment" means any of the followingtypes of land vehicles, including any attachedmachinery or equipment:

a. Bulldozers, farm machinery, forklifts and othervehicles designed for use principally off publicroads;

b. Vehicles maintained for use solely on or nextto premises you own or rent;

c. Vehicles that travel on crawler treads;

d. Vehicles, whether self-propelled or not, onwhich are permanently mounted:

(1) Power cranes, shovels, loaders, diggersor drills; or

(1) The repair, replacement, adjustment orremoval of "your product" or "your work";or

(2) Your fulfilling the terms of the contract oragreement.

9. "Insured contract" means:

a. A contract for a lease of premises. However,that portion of the contract for a lease ofpremises that indemnifies any person ororganization for damage by fire to premiseswhile rented to you or temporarily occupied byyou with permission of the owner is not an"insured contract";

b. A sidetrack agreement;

c. Any easement or license agreement, exceptin connection with construction or demolitionoperations on or within 50 feet of a railroad;

d. An obligation, as required by ordinance, toindemnify a municipality, except in connectionwith work for a municipality;

e. An elevator maintenance agreement;

f. That part of any other contract or agreementpertaining to your business (including anindemnification of a municipality in connectionwith work performed for a municipality) underwhich you assume the tort liability of anotherparty to pay for "bodily injury" or "propertydamage" to a third person or organization.Tort liability means a liability that would beimposed by law in the absence of anycontract or agreement.

Paragraph f. does not include that part of anycontract or agreement:

(1) That indemnifies a railroad for "bodilyinjury" or "property damage" arising out ofconstruction or demolition operations,within 50 feet of any railroad property andaffecting any railroad bridge or trestle,tracks, roadbeds, tunnel, underpass orcrossing;

(2) That indemnifies an architect, engineer orsurveyor for injury or damage arising outof:

(a) Preparing, approving or failing toprepare or approve maps, drawings,opinions, reports, surveys, changeorders, designs or specifications; or

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14. "Personal and advertising injury" means injury,including consequential "bodily injury", arising outof one or more of the following offenses:

a. False arrest, detention or imprisonment;

b. Malicious prosecution;

c. The wrongful eviction from, wrongful entryinto, or invasion of the right of private occu-pancy of a room, dwelling or premises that aperson occupies, committed by or on behalfof its owner, landlord or lessor;

d. Oral or written publication, in any manner, ofmaterial that slanders or libels a person ororganization or disparages a person's ororganization's goods, products or services;

e. Oral or written publication, in any manner, ofmaterial that violates a person's right ofprivacy;

f. The use of another's advertising idea in your"advertisement"; or

g. Infringing upon another's copyright, tradedress or slogan in your "advertisement".

15. "Pollutants" means any solid, liquid, gaseous orthermal irritant or contaminant, including smoke,vapor, soot, fumes, acids, alkalis, chemicals andwaste. Waste includes materials to be recycled,reconditioned or reclaimed.

16. "Products-completed operations hazard":

a. Includes all "bodily injury" and "property dam-age" occurring away from premises you ownor rent and arising out of "your product" or"your work" except:

(1) Products that are still in your physicalpossession; or

(2) Work that has not yet been completed orabandoned. However, "your work" will bedeemed completed at the earliest of thefollowing times:

(a) When all of the work called for in yourcontract has been completed.

(b) When all of the work to be done atthe job site has been completed ifyour contract calls for work at morethan one job site.

(2) Road construction or resurfacing equip-ment such as graders, scrapers or rollers;

e. Vehicles not described in Paragraph a., b., c.or d. above that are not self-propelled and aremaintained primarily to provide mobility topermanently attached equipment of thefollowing types:

(1) Air compressors, pumps and generators,including spraying, welding, buildingcleaning, geophysical exploration, lightingand well servicing equipment; or

(2) Cherry pickers and similar devices usedto raise or lower workers;

f. Vehicles not described in Paragraph a., b., c.or d. above maintained primarily for purposesother than the transportation of persons orcargo.

However, self-propelled vehicles with thefollowing types of permanently attachedequipment are not "mobile equipment" but willbe considered "autos":

(1) Equipment designed primarily for:

(a) Snow removal;

(b) Road maintenance, but not construc-tion or resurfacing; or

(c) Street cleaning;

(2) Cherry pickers and similar devicesmounted on automobile or truck chassisand used to raise or lower workers; and

(3) Air compressors, pumps and generators,including spraying, welding, buildingcleaning, geophysical exploration, lightingand well servicing equipment.

However, "mobile equipment" does not includeland vehicles that are subject to a compulsory orfinancial responsibility law or other motor vehicleinsurance or motor vehicle registration law wherethey are licensed or principally garaged. Landvehicles subject to a compulsory or financialresponsibility law or other motor vehicle insurancelaw or motor vehicle registration law are con-sidered "autos".

13. "Occurrence" means an accident, including con-tinuous or repeated exposure to substantially thesame general harmful conditions.

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18. "Suit" means a civil proceeding in which damagesbecause of "bodily injury", "property damage", or"personal and advertising injury" to which thisinsurance applies are alleged. "Suit" includes:

a. An arbitration proceeding in which such dam-ages are claimed and to which the insuredmust submit or does submit with our consent;or

b. Any other alternative dispute resolution pro-ceeding in which such damages are claimedand to which the insured submits with ourconsent.

19. "Temporary worker" means a person who isfurnished to you to substitute for a permanent"employee" on leave or to meet seasonal orshort-term workload conditions.

20. "Volunteer worker" means a person who is notyour "employee", and who donates his or herwork and acts at the direction of and within thescope of duties determined by you, and is notpaid a fee, salary or other compensation by youor anyone else for their work performed for you.

21. "Your product":

a. Means:

(1) Any goods or products, other than realproperty, manufactured, sold, handled,distributed or disposed of by:

(a) You;

(b) Others trading under your name; or

(c) A person or organization whose busi-ness or assets you have acquired;and

(2) Containers (other than vehicles), materi-als, parts or equipment furnished inconnection with such goods or products.

b. Includes:

(1) Warranties or representations made atany time with respect to the fitness,quality, durability, performance or use of"your product"; and

(2) The providing of or failure to providewarnings or instructions.

(c) When that part of the work done atthe job site has been put to itsintended use by any other person ororganization other than anothercontractor or subcontractor workingon the same project.

Work that may need service, mainte-nance, correction, repair or replacement,but which is otherwise complete, will betreated as completed.

The "bodily injury" or "property damage" mustoccur away from premises you own or rent,unless your business includes the selling,handling or distribution of "your product" forconsumption on premises you own or rent.

b. Does not include "bodily injury" or "propertydamage" arising out of:

(1) The transportation of property, unless theinjury or damage arises out of a conditionin or on a vehicle not owned or operatedby you, and that condition was created bythe "loading or unloading" of that vehicleby any insured; or

(2) The existence of tools, uninstalled equip-ment or abandoned or unused materials.

17. "Property damage" means:

a. Physical injury to tangible property, includingall resulting loss of use of that property. Allsuch loss of use shall be deemed to occur atthe time of the physical injury that caused it;or

b. Loss of use of tangible property that is notphysically injured. All such loss of use shallbe deemed to occur at the time of the"occurrence" that caused it.

For the purposes of this insurance, electronic datais not tangible property.

As used in this definition, electronic data meansinformation, facts or programs stored as, createdor used on, or transmitted to or from computersoftware, including systems and applicationssoftware, hard or floppy disks, CD-ROMs, tapes,drives, cells, data processing devices or any othermedia which are used with electronicallycontrolled equipment.

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(2) After damage by a Covered Cause ofLoss, permanent repairs to the building:

(a) Have not started; and

(b) Have not been contracted for;within 30 days of initial payment ofloss.

(3) The building has:

(a) An outstanding order to vacate;

(b) An outstanding demolition order; or

(c) Been declared unsafe by governmen-tal authority.

(4) Fixed and salvageable items have beenor are being removed from the buildingand are not being replaced. This does notapply to such removal that is necessaryor incidental to any renovation orremodeling.

(5) Failure to:

(a) Furnish necessary heat, water, sewerservice or electricity for 30 consecu-tive days or more, except during aperiod of seasonal unoccupancy; or

(b) Pay property taxes that are owingand have been outstanding for morethan one year following the date due,except that this provision will notapply where you are in a bona fidedispute with the taxing authorityregarding payment of such taxes.

b. 10 days before the effective date of can-cellation if we cancel for nonpayment ofpremium.

c. 30 days before the effective date of can-cellation if we cancel for any other reason.

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

4. Notice of cancellation will state the effective dateof cancellation. The policy period will end on thatdate.

c. Does not include vending machines or otherproperty rented to or located for the use ofothers but not sold.

22. "Your work":

a. Means:

(1) Work or operations performed by you oron your behalf; and

(2) Materials, parts or equipment furnished inconnection with such work or operations.

b. Includes:

(1) Warranties or representations made atany time with respect to the fitness,quality, durability, performance or use of"your work"; and

(2) The providing of or failure to providewarnings or instructions.

SECTION III – COMMON POLICY CONDITIONS(APPLICABLE TO SECTION I – PROPERTY ANDSECTION II – LIABILITY)

A. Cancellation

1. The first Named Insured shown in the Declara-tions may cancel this policy by mailing or deliver-ing to us advance written notice of cancellation.

2. We may cancel this policy by mailing or deliveringto the first Named Insured written notice ofcancellation at least:

a. Five days before the effective date of cancel-lation if any one of the following conditionsexists at any building that is Covered Propertyin this policy:

(1) The building has been vacant orunoccupied 60 or more consecutive days.This does not apply to:

(a) Seasonal unoccupancy; or

(b) Buildings in the course of construc-tion, renovation or addition.

Buildings with 65% or more of the rentalunits or floor area vacant or unoccupiedare considered unoccupied under thisprovision.

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not make safety inspections. We do not undertaketo perform the duty of any person or organizationto provide for the health or safety of workers orthe public. And we do not warrant that conditions:

a. Are safe and healthful; or

b. Comply with laws, regulations, codes orstandards.

3. Paragraphs 1. and 2. of this condition applynot only to us, but also to any rating, advisory,rate service or similar organization which makesinsurance inspections, surveys, reports orrecommendations.

4. Paragraph 2. of this condition does not apply toany inspections, surveys, reports or recommenda-tions we may make relative to certification, understate or municipal statutes, ordinances or regula-tions, of boilers, pressure vessels or elevators.

F. Insurance Under Two Or More Coverages

If two or more of this policy's coverages apply to thesame loss or damage, we will not pay more than theactual amount of the loss or damage.

G. Liberalization

If we adopt any revision that would broaden thecoverage under this policy without additional premiumwithin 45 days prior to or during the policy period, thebroadened coverage will immediately apply to thispolicy.

H. Other Insurance

1. If there is other insurance covering the same lossor damage, we will pay only for the amount ofcovered loss or damage in excess of the amountdue from that other insurance, whether you cancollect on it or not. But we will not pay more thanthe applicable Limit of Insurance of Section I –Property.

2. Business Liability Coverage is excess over:

a. Any other insurance that insures for directphysical loss or damage; or

b. Any other primary insurance available to youcovering liability for damages arising out ofthe premises or operations for which youhave been added as an additional insured.

5. If this policy is cancelled, 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 be effectiveeven if we have not made or offered a refund.

6. If notice is mailed, proof of mailing will be suf-ficient proof of notice.

B. Changes

This policy contains all the agreements between youand us concerning the insurance afforded. The firstNamed Insured shown in the Declarations is author-ized to make changes in the terms of this policy withour consent. This policy's terms can be amended orwaived only by endorsement issued by us and madea part of this policy.

C. Concealment, Misrepresentation Or Fraud

This policy is void in any case of fraud by you as itrelates to this policy at any time. It is also void if youor any other insured, at any time, intentionally con-ceals or misrepresents a material fact concerning:

1. This policy;

2. The Covered Property;

3. Your interest in the Covered Property; or

4. A claim under this policy.

D. Examination Of Your Books And Records

We may examine and audit your books and recordsas they relate to this policy at any time during thepolicy period and up to three years afterward.

E. Inspections And Surveys

1. We have the right to:

a. Make inspections and surveys at any time;

b. Give you reports on the conditions we find;and

c. Recommend changes.

2. We are not obligated to make any inspections,surveys, reports or recommendations and anysuch actions we do undertake relate only to insur-ability and the premiums to be charged. We do

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premium for that period and send notice to thefirst Named Insured. The due date for audit premi-ums is the date shown as the due date on the bill.If the sum of the advance and audit premiumspaid for the policy period is greater than theearned premium, we will return the excess to thefirst Named Insured.

3. The first Named Insured must keep records of theinformation we need for premium computationand send us copies at such times as we mayrequest.

K. Transfer Of Rights Of Recovery Against Others ToUs

1. Applicable to Businessowners PropertyCoverage:

If any person or organization to or for whom wemake payment under this policy has rights torecover damages from another, those rights aretransferred to us to the extent of our payment.That person or organization must do everythingnecessary to secure our rights and must donothing after loss to impair them. But you maywaive your rights against another party in writing:

a. Prior to a loss to your Covered Property.

b. After a loss to your Covered Property only if,at time of loss, that party is one of thefollowing:

(1) Someone insured by this insurance;

(2) A business firm:

(a) Owned or controlled by you; or

(b) That owns or controls you; or

(3) Your tenant.

You may also accept the usual bills of lading orshipping receipts limiting the liability of carriers.

This will not restrict your insurance.

2. Applicable to Businessowners Liability Coverage:

If the insured has rights to recover all or part ofany payment we have made under this policy,those rights are transferred to us. The insuredmust do nothing after loss to impair them. At ourrequest, the insured will bring "suit" or transferthose rights to us and help us enforce them. Thiscondition does not apply to Medical ExpensesCoverage.

3. When this insurance is excess, we will have noduty under Business Liability Coverage to defendany claim or "suit" that any other insurer has aduty to defend. If no other insurer defends, we willundertake to do so, but we will be entitled to theinsured's rights against all those other insurers.

I. Premiums

1. The first Named Insured shown in theDeclarations:

a. Is responsible for the payment of all premi-ums; and

b. Will be the payee for any return premiums wepay.

2. The premium shown in the Declarations wascomputed based on rates in effect at the time thepolicy was issued. On each renewal, continuationor anniversary of the effective date of this policy,we will compute the premium in accordance withour rates and rules then in effect.

3. With our consent, you may continue this policy inforce by paying a continuation premium for eachsuccessive one-year period. The premium mustbe:

a. Paid to us prior to the anniversary date; and

b. Determined in accordance with Paragraph 2.above.

Our forms then in effect will apply. If you do notpay the continuation premium, this policy willexpire on the first anniversary date that we havenot received the premium.

4. Undeclared exposures or change in your businessoperation, acquisition or use of locations may oc-cur during the policy period that are not shown inthe Declarations. If so, we may require an addi-tional premium. That premium will be determinedin accordance with our rates and rules then ineffect.

J. Premium Audit

1. This policy is subject to audit if a premium desig-nated as an advance premium is shown in theDeclarations. We will compute the final premiumdue when we determine your actual exposures.

2. Premium shown in this policy as advance premi-um is a deposit premium only. At the close ofeach audit period, we will compute the earned

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L. Transfer Of Your Rights And Duties Under ThisPolicy

Your rights and duties under this policy may not betransferred without our written consent except in thecase of death of an individual Named Insured.

If you die, your rights and duties will be transferred toyour legal representative but only while acting withinthe scope of duties as your legal representative. Untilyour legal representative is appointed, anyone havingproper temporary custody of your property will haveyour rights and duties but only with respect to thatproperty.