schedule26 required insurance - cornwall council€¦ · contractors' all risks insurance....
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SCHEDULE26
REQUIRED INSURANCE
Part 1: -Operational Insurance Programme
Part 2: -Construction Insurance Programme
Part 3: - Broker's Letter of Undertaking
Part 4: - Endorsements
Part 5: - Not used
Part 6 - Definitions
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PART 1 -OPERATIONAL INSURANCE PROGRAMME
1. Property Damage Insurance
Insured Parties
a) The Authority;
b) The Contractor;
c) The Finance Parties;
d) The Subcontractors.
as eo-insured and each for their respective rights and interests in the Project.
Insured Property
Any real and personal property of whatsoever nature or description which is the subject
matter of the Project and which is the property of the Insured Parties or for which the
Insured Parties may be responsible, unless more specifically insured under the
Contractors' All Risks Insurance.
Coverage
"All Risks" of physical loss, destruction or damage to the Insured Property from any cause
not excluded including Machinery Breakdown in respect of the RWTP.
Sum Insured
An amount not less than the full reinstatement or replacement value of the Insured
Property plus an amount sufficient to cater for the requirements of the principal
extensions.
Territorial Limits
Anywhere in the United Kingdom
Period of Insurance
From the Service Commencement Date, or in the case of the Works from the date when
the interest insured transfers from the Construction Insurance Programme, until the
earlier of the Contract Expiry Date and the Termination Date.
Cover Features & Extensions
a) Terrorism cover.
b) Automatic reinstatement of sum insured.
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c) Capital additions clause.
d) Debris removal clause.
e) 72 hour clause (earthquake and weather).
f) Professional fees.
g) European authority clause.
h) Repair/reinstatement basis of claims settlement with cash option for non
reinstatement.
i) Expediting Expenses
j) Temporary offsite storage
k) Strikes, riot and civil commotion
I) Plans and documents
m) Professional Fees
n) Payments on account
o) Computer data reinstatement
p) Engineering breakdown
q) Temporary Repairs
Principal Exclusions
a) War and related perils (UK market agreed wording).
b) Nuclear/radioactive risks (UK market agreed wording).
c) Pressure waves caused by aircraft and other aerial devices travelling at sonic or
supersonic speeds.
d) Wear, tear and gradual deterioration, latent defect, defective design, materials or
workmanship, however not excluding consequential damage.
e) Unexplained shortages.
f) Pollution and contamination to the insured property unless arising from an event
which itself is not otherwise excluded
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g) Waste fuel quality clause
h) Re'fractory linings clause
i) Consequential financial losses.
j) Cyber risks.
k) Latent defects, but not consequential damage which is otherwise insured.
Maximum Deductible
Not to exceed
a) £50,000 each loss in respect of non-RWTP facilities
b) £250,000 each loss in respect of the RWTP for fire and explosion only, £50,000 all
other perils
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2. Business Interruption Insurance
2.1 Insured Parties
a) The Contractor;
b) The Finance Parties
c) The Operating Subcontractor
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as eo-insured and each for their respective rights and interests in the Project.
2.2 Indemnity
In respect of:
1. loss of anticipated Revenue during at least the Minimum Indemnity Period arising
from an interruption or interference in the operation of the Project as a result of
loss or damage covered under Property Damage Insurance effected in
accordance with Item 1 of Part 1 of this Schedule including physical loss or
damage which would be indemnifiable but for the application of any deductible;
2. the economic additional expenditure/increased cost of working necessarily and
reasonably incurred for the purpose of avoiding or reducing the loss of Revenue of
the Contractor which without such expenditure would have taken place, during the
Minimum Indemnity Period .
2.3 Sum Insured
An amount sufficient to cover the sums the subject of the Indemnity, for the Minimum
Indemnity Period, including in respect of additional increased cost of working.
2.4 Maximum Deductible
a) £50,000 each loss in respect of non-RWTP facilities
b) 60 days in respect of the RWTP
2.5 Minimum Indemnity Period
12 months for non-RWTP facilities
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42 months for the RWTP
18 months in respect of machinery breakdown (RWrP only)
2.6 Period of Insurance
From the Service Commencement Date, or in the case of the Works from the date when the
interest insured transfers from the Construction Insurance Programme, until the earlier of
the Contract Expiry Date and the Termination Date.
2.7 Cover Features & Extensions
a) Denial of access.
b) Terrorism cover.
c) Engineering breakdown
d) Utilities.
e) Accountants clause.
f) Automatic re·instatement of the sum insured subject to the payment of any additional
premium requirement
g) Payments on account
h) Suppliers extension.
i) Additional Increased Cost of Working .
2.8 Principal Exclusions
a) Exclusions under the Property Damage Insurance, other than for consequential financial
losses as insured hereunder.
b) Delayed response by a public body or state authority.
3. Third Party Public and Products Liability Insurance
Insured Parties
a) The Authority;
b) The Contractor;
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c) The Finance Parties;
d) The Subcontractors (i.e. the Contractor's counterparties to the project documents) as
eo-insured and each for their respective rights and interests in the Project.
Interest
Legal liability of the Insured Parties to pay damages (including claimants' costs and
expenses) in respect of or consequent upon accidental:
a) death or bodily injury to or sickness, loss of sight, anguish or shock whether mental or
otherwise, or illness or disease contracted by any person;
b) loss or damage to property;
c) interference to property or any easement, right or air, light, water or way of the
enjoyment or use thereof by obstruction, trespass, loss of amenities, nuisance or any
like cause
happening during the Period of Insurance and arising out of or in connection with the
Project.
Limit of Indemnity
Not less than £25,000,000 in respect of any one occurrence, the number of occurrences
being unlimited, but £25,000,000 in the aggregate in respect of products liability and
pollution liability.
With effect from the RWTP Operational Commencement Date the limit shall be not less
than £50,000,000 in respect of any one occurrence, the number of occurrences being
unlimited, but £50,000,000 in the aggregate in respect of products liability and pollution
liability.
Territorial Limits
Worldwide excluding USA/Canada other than non-manual visits.
Jurisdiction
Worldwide (excluding USA and Canada).
Period of Insurance
From the Service Commencement Date, or in the case of the Works from the date when
the interest insured transfers from the Construction Insurance Programme, until the
earlier of the Expiry Date and the Termination Date.
Cover Features & Extensions
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a) Contractualliability.
b) Health & Safety at Work Act(s) clause.
c) Defective Premises Act clause.
d) Data Protection Act clause.
e) Cross liability clause.
f) Motor contingent liability.
g) Costs in addition to the limit (other than USA/Canada).
h) Contingent liability of the Insured Parties for the acts of their sub-contractors .
i) Insured to include directors, officers, and employees of the insured parties.
j) Consumer Protection Act 1987.
k) Libel and slander.
I) Social functions and activities.
m) Infringement of privacy and wrongful arrest.
Principle Exclusions
a) Liability for death, illness, disease or bodily injury sustained by employees of the
insured during the course of their employment i.e. Employers' Liability .
b) Liability arising out of the use of mechanically propelled vehicles whilst required to be
compulsorily insured by legislation in respect of such vehicles.
c) Liability in respect of predetermined penalties or liquidated damages imposed under
any contract entered into by the Insured Parties.
d) Liability in respect of loss or damage to property in the care, custody and control of
the Insured Parties but this exclusion is not to apply to all property belonging to the
Authority.
e) Liability arising out of technical or professional advice other than in respect of death or
bodily injury to persons or damage to third party property.
f) Liability arising from the ownership, possession or use of any aircraft or marine
vessel.
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g) Liability arising from seepage and pollution unless caused by a sudden, unintended
and unexpected occurrence.
h) War and related perils (UK market agreed wording).
i) Nuclear/radioactive risks (UK market agreed wording).
j) Liability arising from toxic mould.
k) Liability arising from asbestos.
I) Cyber risks.
Maximum Deductible
Not to exceed £50,000 each occurrence in respect of loss or damage to third party
property. (escalated periodically as appropriate)
Environmental Impairment Liability
Insured Parties
a) The Authority;
b) The Contractor;
c) The Finance Parties;
d) The Subcontractors (i.e. the Contractor's counterparties to the project documents)
as eo-insured and each for their respective rights and interests in the Project.
Interest
To indemnify the Insured Parties in respect of all sums that they may become legally
liable to pay consequent to a pollution incident and/or action by a relevant authority (e.g.
Local Authority or Environment Agency or a judicial authority) or a third party and
resulting in a claim or claims first made against the Insured Parties and reported to the
Insurer during the policy period. A pollution incident relates to either pre-existing pollution
or pollution subsequently caused by the Contractor in connection with the Project and the
provision of the Services.
Limit of Indemnity
Not less than £5,000,000 in respect of any one pollution incident loss, the number of pollution
incident losses being unlimited and not less than £15,000,000 in the aggregate for the Existing
Landfills and not less than £10,000,000 in the aggregate for non-landfill sites, in respect of
seepage, pollution and liability for a maximum period of 5 years.
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Territorial Limits
United Kingdom.
Period of Insurance
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From the Service Commencement Date until the earlier of the Expiry Date and the
Termination Date.
Cover Features & Extensions
a) Regulatory or third party claims for on site clean-up of pre-existing and new conditions
where otherwise not excluded.
b) Regulatory or third party claims for off-site clean-up of pre-existing and new
conditions where otherwise not excluded.
c) Third party claims for on-site and off-site property damage from pre-existing and new
conditions.
d) Third party claims for on-site and off-site bodily injury from pre-existing and new
conditions.
e) Legal costs.
f) No retroactive date.
g) Emergency costs to prevent a claim.
h) The Integrated Waste Management PFI Contract to be an insured contract.
Principle Exclusions
a) War and related perils (UK market agreed wording).
b) Terrorism.
c) Nuclear/radioactive risks (UK market agreed wording).
d) Asbestos and lead (this exclusion shall not extend to remediation costs with respect
to soil and groundwater).
e) Intentional, wilful or deliberate non-compliance with any EU, Authority decision or any
UK or EU regulation.
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f) Pre-existing conditions related to an old landfill (closed landfill site). This exclusion
shall not apply to the Old Connon Bridge Landfill Site in relation to which the
Contractor shall seek as wide additional cover as possible from the insurer which
insures the first Environmental Impairment Liability policy with effect from16 October
2006. The extent of such additional insurance cover is to be agreed between the
Contractor and the Authority before the date 3 months following 16 October 2006, and
the additional premium relating thereto shall be reimbursed to the Contractor in
accordance with the terms of Schedule 35.
g) Criminal fines and penalties.
h) On-site remediation costs on landfill sites.
i) Capital improvements .
j) Voluntary site investigation
k) Change in use/site development (other than changes in use/development to another
waste facility/refurbishment or landfill cell construction).
I) Contractual liability save where liability would arise in the absence of such a contract.
This exclusion shall not apply if such a contract is scheduled as an insured contract
under the policy.
m) Damage to property owned, leased, rented, licensed, occupied or loaned to an
insured.
n) Employers' liability of the Contractor.
o) Arising from a claim by an insured against any other person or entity who is also an
insured under this insurance save where the claim is made either (a) in relation to an
insured contract or (b) by the Authority.
p) Costs, charges, or expenses for goods or services of an insured or its parent,
subsidiary or affiliate, unless such costs, charges or expenses are emergency
expense or are incurred with prior written consent of insurers.
q) Known incidents prior to the policy inception date beyond those disclosed to the
insurer in the application for the policy arising from a pollution incident.
r) Underground storage tanks.
s) Liability based upon or arising out of any mildew, mould or other fungi, or their
mycotoxins, spores or other byproducts.
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t) Liability arising from naturally occurring substances unless such substances are
detected in levels or concentrations in excess of those naturally present at an insured
site.
u) Known Conditions as follows:
a. Landfill gas migration from the eastern boundary of the United Mines landfill site
b. The disposal of the Torrey Canyon waste deposited in the abandoned mine shaft
at the United Mines site
c. List I substances in the groundwater at the United Mines site until such time as
the source of the groundwater contamination has been proven not to be the
United Mines landfill
d. Past and future odour complaints at the Cannon Bridge landfill, subject to receipt
and satisfactory review of information pertaining to the cause of the odour
releases has been identified and a suitable remediation plan implemented,
completed and accepted by the Environment Agency and us, this restriction will
be removed for any new pollution incidents. This will include any odours
produced during the efforts to reduce the leachate head in phases 1, 2 and 3
along with cell 3c.
e. Mecoprop at or emanating from Cannon Bridge Landfill or from the United Mines
Landfill until such time as the source has been identified and appropriate action
taken.
f. Any liability associated with the former landfill operations undertaken on the
Wheal Prosper HWRC site, Bodmin and associated refuse transfer station and
MRF plant; Tiscott Wood HWRC site, Bude; and Bangers Quarry HWRC site,
Launceston except in so far as any loss arises directly from the actions taken by
or on behalf of the Contractor .
g. Any liability associated with the closed (former dilute and disperse area as shown
on the attached plan and referenced as Plan 1) landfill located at the Con non
Bridge site (except insofar as any loss arises from the operation of the leachate
treatment plant and associated management processes used to treat leachate
from this closed landfill) except in so far as any loss arises directly from the
actions taken by or on behalf of the Contractor.
h. discharge dispersal seepage migration release or escape of any gases arising
from former or active mine workings and coal seams
Maximum Deductible
Not to exceed £1 00,000 each and every loss and £1 ,000,000 in the aggregate with a
maintenance retention not to exceed £20,000 each and every loss thereafter. (escalated
periodically as appropriate)
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PART 2- CONSTRUCTION INSURANCE PROGRAMME
1. Contractors' All Risks Insurance
Insured Parties
a) The Authority;
b) The Contractor;
c) The Finance Parties;
d) The Construction Subcontractors and all other contractors and/or sub-contractors
and/or installing suppliers of any tier;
e) The Operating Subcontractor where phased handover or commissioning and testing
is likely to occur;
f) Professional consultants acting for any of the above for their site activities only,
as eo-insured and each for their respective rights and interests in the Project.
Insured Property
All building works, temporary works, materials and all other property of whatsoever nature
or description (but excluding construction plant and equipment) for use in connection with
or for incorporation therein, and all facilities relating to the service, design, supply,
erection, installation, testing, setting to work and commissioning of the Works, the
property of Insured Parties or for which they may be responsible.
Coverage
"All Risks" of physical loss, destruction or damage to the Insured Property from any cause
not excluded.
Sum Insured
At all times an amount not less than the full reinstatement or replacement value of the
Insured Property plus an amount sufficient to cater for the requirements of the principal
extensions.
Territorial Limits
United Kingdom including offsite storage and whilst in transit (other than by sea and air)
including loading and unloading incidental thereto.
Period of Insurance
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From the start of any Works until the date when the interest insured transfers to the
Operational Insurance Programme, and in addition the defects liability period specified in
the Construction Subcontract.
Cover Features & Extensions
a) Terrorism cover.
b) Professional fees.
c) Debris removal and demolition clause,
d) 72 hour clause (earthquake and weather).
e) Automatic increase clause .
f) Additional costs of completion clause,.
g) European authorities clause.
h) Automatic reinstatement of sum insured clause.
i) Munitions of war clause.
j) Expediting expenses.
k) Preventive measures clause.
I) Extended maintenance during the defects liability period for the RWTP, Guaranteed
maintenance otherwise .
m) Plans and documents.
n) Free issue materials, included with sum insured.
o) Marine 50/50.
p) Strikes, riot and civil commotion.
q) Inland transit.
r) Payments on account.
s) Computer data reinstatement.
t) Testing and Commissioning.
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u) Fire Joint Code of Practice.
v) Temporary Repairs.
w) Unbuilt Portion/inflation on incomplete works.
x) Offsite storage and repair.
Principal Exclusions
a) War and related perils (UK market agreed wording).
b) Nuclear/radioactive risks (UK market agreed wording).
c) Pressure waves caused by aircraft and other aerial devices travelling at sonic or
supersonic speeds.
d) Wear, tear and gradual deterioration.
e) Unexplained shortages.
f) Consequential financial losses.
g) Design exclusion LEG03/06.
h) Waste fuel quality clause.
i) Refractory linings clause.
j) Cyber risks .
Maximum Deductible
Not exceeding
a) £350,000 each and every loss arising out of LEG 03/06 and during testing and
commissioning or during the extended maintenance period
b) £100,000 in respect of losses arising out of fire, lightning, storm, flood, tempest,
water subsidence, and/or collapse
c) £25,000 all other
2. Delay in Start Up Insurance
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Insured Parties
The Contractor;
1) The Finance Parties
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2) The Operating Subcontractor where phased handover or commissioning and testing
is likely to occur
as eo-insured and each for their respective rights and interests in the Project.
Indemnity
!n respect of:
1. loss of anticipated Revenue during the Minimum Indemnity Period, arising from a delay in
completion of the RWTP works only as a result of loss or damage covered under the
Contractors' All Risks Insurance effected in accordance with Item 1 of Part 2 of this
Schedule, including loss which would be indemnifiable but for the application of any
deductible;
2. the economic additional expenditure/increased cost of working necessarily and reasonably
incurred for the purpose of avoiding or reducing the loss of Revenue of the Contractor
from the delay in completion of the RWTP which without such expenditure would have
taken place, during the Minimum Indemnity Period.
Sum Insured
An amount sufficient to cover the sums the subject of the Indemnity for the Minimum
Indemnity Period, including additional increased cost of working .
Maximum Deductible
60days
Minimum Indemnity Period
42 months for the RWTP.
Period of Insurance
As per the Contractors' All Risks Insurance for the RWTP works period, excluding the defects
liability period.
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Cover Features & Extensions
a) Denial of access.
b) Utilities,.
c) Terrorism cover.
d) Automatic Reinstatement of sum insured, subject to the payment of any additional
premium requirement.
e) Professional fees.
f) Payments on account.
g) Suppliers extension.
h) Additional Increased Cost of Working .
2.8 Principal Exclusions
a) The exclusions under the Contractors' All Risks Insurance, other than for consequential
financial losses.
b) Delayed response by a public body or state authority.
3. Marine Cargo Insurance
Insured
a) The Authority;
b) The Contractor;
c) The Finance Parties
d) The Construction Subcontractors and all other contractors and/or sub-contractors and/or
installing suppliers of any tier;
e) Professional consultants acting for any of the above for their site activities only;
as eo-insured and each for their respective rights and interests in the Project.
Insured Property
a) All Property and interest of every description of a critical nature for all transits by sea or air
of all goods intended for the RWTP where such items are not otherwise covered by the
Contractors All Risk Insurance and are carried for the account and interest of the Insured
from risk attachment at factory premises to Site, including offsite storage.
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b) Open cover to accept all sendings despatched during the currency of the policy and to
accept all interests at lnsureds' risk in connection with the RWTP.
Coverage
a) All risks of loss destruction or damage to the Insured Property from any cause not
excluded.
b) Terrorism cover.
Limit of Indemnity
For any one sending/any one voyage not less than the full replacement value plus 10%
Territorial Limits
Europe
Jurisdiction
Worldwide (excluding USA/Canada).
Period of Insurance
From the commencement of appropriate transits until the delivery to the Site plus deferred
unpacking period.
Cover Features & Extensions
a) Institute Cargo Clauses (A)
b) Institute War Clauses (Cargo)
c) Institute Strikes Clauses (Cargo)
d) Institute Classification Clauses
e) Institute War Cancellation Clauses (Cargo)
f) Overland transit cover but only if not covered under Construction "All Risks" Insurance
Concealed Damage Clause
g) Notice of Cancellation: seven (7) days for war, strikes, riots, and civil commotion, except
forty-eight (48) hours for sending to and from the United States of America. Otherwise,
non-cancellable.
h) Accumulation clause (200%)
Principle Exclusions
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a) Ordinary leakage ordinary loss in weight or volume or ordinary wear and tear of the
subject matter insured;
b) Inherent vice or nature of the subject matter insured;
c) Insolvency or financial default of the owners managers charterer's or operators of the
vessel or aircraft, unless not material to the claim;
d) Un-seaworthiness of the vessel or craft, etc but only where the Insured is aware of the
un-seaworthiness;
e) Insufficiency or unsuitability of packing
f) Delay;
g) Vessel not ISM Code certified/SOLAS Convention;
h) War and Radioactivity on Land
Deductible
Not to exceed £100,000 each occurrence .
Marine Cargo Delay in Start Up
Insured Parties
a) The Contractor
b) The Finance Parties
as eo-insured and each for their respective rights and interest in the Project.
Indemnity
i) Loss of anticipated revenue of the Contractor anticipated during the Indemnity Period
arising from a delay in completion as a result of physical loss or damage covered
under Marine Cargo Insurance effected in accordance with paragraph 3 of Part 2 of
this Schedule including physical loss or damage which would be indemnifiable but for
the application of any deductible.
ii) The additional expenditure necessarily and reasonably incurred for the purpose of
avoiding or reducing the loss of fixed costs and debt service costs of the Contractor
Sum Insured
An amount sufficient to cover the sums the subject of the Indemnity for the Maximum
Indemnity Period, including in respect of additional increased costs of working.
Maximum Indemnity Period
24 months
Period of Insurance
From the commencement of appropriate transits until the delivery to the Site plus deferred
unpacking period.
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Cover Features & Extensions
a) As per Marine Cargo policy plus;
b) Additional increased costs of working; and;
c) Payments on account.
Deductible
Not to exceed 30 days each occurrence .
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5. Third Party Public Liability Insurance
Insured
a) The Authority;
b) The Contractor;
c) The Finance Parties;
d) The Construction Subcontractors and all other contractors and/or sub-contractors
and/or installing suppliers of any tier;
e) The Operating Subcontractor where phased handover or commissioning and testing is
likely to occur;
f) Professional consultants acting for any of the above for their manual site activities only;
as eo-insured and each for their respective rights and interests in the Project.
Interest
Legal liability of the Insured Parties to pay damages (including claimants' costs and
expenses) in respect of or consequent upon accidental:
a) death or bodily injury to or sickness, loss of sight, anguish or shock whether mental or
otherwise, or illness or disease contracted by any person;
b) loss or damage to property;
c) interference to property or any easement, right of air, light, water or way of the
enjoyment or use thereof by obstruction, trespass, loss of amenities, nuisance or any
like cause;
happening during the Period of Insurance and arising out of or in connection with the
Works and the Project.
Limit of Indemnity
Not less than £25,000,000 in respect of any one occurrence, the number of occurrences
being unlimited, but £25,000,000 in the aggregate in respect of pollution and
contamination liability.
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With effect from the commencement of Works in relation to the RWTP the limit shall be
not less than £50,000,000 in respect of any one occurrence, the number of occurrences
being unlimited, but £50,000,000 in the aggregate in respect of pollution and
contamination liability.
Territorial Limits
Worldwide excluding USA/Canada other than non-manual visits.
Jurisdiction
Worldwide.
Period of Insurance
From the start of any Works until the date when the interest insured transfers to the
Operational Insurance Programme, and in addition the defects liability period specified in
the Construction Subcontract.
Cover Features & Extensions
a) Contractualliability.
b) Liability arising out of CDM Regulations.
c) Health & Safety at Work Act(s) clause.
d) Cross liability clause.
e) Motor contingent liability .
f) Costs in addition to the limit (other than USA/Canada).
g) Munitions of war clause.
h) Data Protection Act clause.
i) Insured to include directors, officers, and employees of the insured parties
j) Consumer Protection Act 1987
k) Libel and slander
I) Social functions and activities
m) Infringement of privacy and wrongful arrest
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Principle Exclusions
a) Liability for death, illness, disease or bodily injury sustained by employees of the
insured during the course of their employment i.e. Employers' Liability.
b) Liability arising out of the use of mechanically propelled vehicles whilst required to be
compulsorily insured by legislation in respect of such vehicles.
a) Liability in respect of predetermined penalties or liquidated damages imposed under
any contract entered into by the Insured Parties.
b) Liability in respect of loss or damage to property in the care, custody and control of
the Insured Parties but this exclusion is not to apply to all property belonging to the
Authority .
c) Liability arising out of technical or professional advice other than in respect of death or
bodily injury to persons or damage to third party property.
d) Liability arising from the ownership, possession or use of any aircraft or marine
vessel.
e) Liability arising from seepage and pollution unless caused by a sudden, unintended
and unexpected occurrence.
f) War and related perils (UK market agreed wording).
g) Nuclear/radioactive risks (UK market agreed wording).
h) Liability arising from toxic mould .
i) Liability arising from asbestos.
j) Cyber risks.
Deductible
Not to exceed £50,000 each occurrence in respect of loss or damage to third party
property.
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PART 3- BROKER'S LETTER OF UNDERTAKING
{To be typed on Broker's letterhead}
Broker's Letter of Undertaking
To: The Authority
Dear Sirs
Agreement dated [ ] entered into between
SITA Cornwall Limited (the "Contractor") and Cornwall Council (the "Authority") (the
• "Agreement")
1. We refer to the Agreement. Unless the context otherwise requires, terms defined in the
Agreement shall have the same meaning in this letter.
2. We act as insurance broker to the Contractor in respect of the insurances (which are defined in
clause 96 and schedule 26 of the Agreement attached hereto as Appendix A) evidenced by the
cover notes attached hereto as Appendix 8 ("Required lnsurances") and in that capacity we
confirm that the Required lnsurances:
2.1 where appropriate name you and such other persons as are required to be named pursuant to
the Agreement for their respective interests;
2.2 are, to the best of our knowledge and belief (after making all reasonable enquiries), as at
today's date, in full force and effect; and that
• 2.3 all premiums due as at today's date in respect of the Required lnsurances are paid and the
Required lnsurances are, to the best of our knowledge and belief, placed with insurers which, as
at the time of placement, are reputable and financially sound. We do not, however, make any
representations regarding such insurers' current or future solvency or ability to pay claims; and
that
2.4 the endorsements set out in Part 4 to Schedule 26 of the Agreement attached hereto as
Appendix C are to the best of our knowledge and belief as at today's date in full force and
effect.
3. We further confirm that the cover notes attached hereto as Appendix 8 confirm this position.
4. Pursuant to instructions received from the Contractor and in consideration of your approving our
appointment or continuing appointment as brokers in connection with the Required lnsurances,
we hereby undertake in respect of the interests of the Authority in relation to the Required
lnsurances:
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4.1 Notification Obligations
(a) to notify you at least 30 (thirty) days prior to the expiry of any of the Required
lnsurances if we have not received instructions from the Contractor to negotiate renewal
and in the event of our receiving instructions to renew, to advise you as soon as
reasonably practicable, and in any event within 3 working days, of the details thereof;
(b) to notify you at least 30 (thirty) days prior to ceasing to act as brokers to the
Contractor unless, due to circumstances beyond our control, we are unable to do so in
which case we shall notify you as soon as reasonably practicable and in any event
within 3 working days; and
(c) to pay into the Joint Insurance Account without set off or deduction of any kind or
for any reason, all payments in respect of claims received by us from insurers in relation
to the Required lnsurances specified in Clause 98 of the Agreement attached hereto as
• Appendix D.
•
4.2 Advisory Obligations
(a) to notify you as soon as reasonably practicable, and in any event within 3 working
days, of any default in the payment of any premium by the Contractor to us tor any of
the Required lnsurances;
(b) to notify you if any insurer cancels or gives notification of cancellation of any of the
Required lnsurances, at least 30 (thirty) days before such cancellation is to take effect
or as soon as reasonably practicable in the event that notification of cancellation takes
place less than 30 (thirty) days before it is to take effect;
(c) to notify you as soon as reasonably practicable of any act or omission, breach or
default of the Contractor of which those of our employees directly involved with the
placement or administration of the Relevant lnsurances becomes actually aware in their
capacity as brokers to the Contractor which acting reasonably they consider may
invalidate or render unenforceable in whole or in part any of the Required lnsurances or
which may otherwise materially impact on the extent of cover provided under the
Required lnsurances; and
4.2.4 in accordance with our duty to the Contractor, to advise the Contractor of its
duties of disclosure to insurers including:
4.2.4.1 the types of facts, circumstances and beliefs that should generally be
disclosed to insurers; and
4.2.4.2 the obligation not to misrepresent any facts, matters or beliefs to insurers.
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4.3 Disclosure Obligations
(a) subject to the prior written consent of the Contractor (and we undertake to notify
you as soon as reasonably practicable if such consent is withheld} to disclose to
insurers all information made available to those of our employees directly involved with
the placement of the Relevant lnsurances in their capacity as brokers to the Contractor
and any fact, change of circumstances or occurrence made known to such employees
which in our reasonable opinion is material to the risks insured against under the
Required lnsurances and which properly should be disclosed to insurers (in accordance
with the Contractor's duty of disclosure to insurers) as soon as practicable after we are
in receipt of such information; and become aware of such information, fact, change of
circumstance or occurrence whether prior to inception or renewal or otherwise ; and
(b) to treat as confidential all information so marked or otherwise stated to be
confidential and supplied to us by or on behalf of the Contractor or the Authority and not
to disclose such information, without the prior written consent of the supplier, to any
third party other than those persons who, in our reasonable opinion have a need to have
access to such information from time to time, and for the purpose of disclosure to the
insurers or their agents in respect of the Required lnsurances in discharge of our
obligation set out at clause 4.3.1 of this letter. Our obligations of confidentiality shall not
conflict with our duties owed to the Contractor and shall not apply to disclosure required
by an order of a court of competent jurisdiction, or pursuant to any applicable law,
governmental or regulatory authority having the force of law or to information which is in
the public domain.
4.4 Administrative Obligations
(a) to hold copies of all documents relating to or evidencing the Required lnsurances,
including but without prejudice to the generality of the foregoing, insurance slips,
contracts, policies, endorsements and copies of all documents evidencing renewal of
the Required lnsurances, payment of premiums and presentation and receipt of claims;
(b) subject to our lien over the Policies for premiums and/or commissions due, to
supply to the Authority and/or its insurance advisers (or the Authority's authorised
representatives) as soon as reasonably practicable, on written request copies of the
documents set out in clause 4.4.1 of this letter, and to the extent available, to make
available to such persons as soon as reasonably practicable, upon the Authority's
request the originals of such documents;
(c) to administer the payment of premiums due pursuant to the Required lnsurances
such that, in so far as we hold appropriate cleared funds from the Contractor, all such
premiums shall be paid to insurers in accordance with the terms of the Required
lnsurances;
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(d) to administer the payment of claims from insurers in respect of the lnsurances
(the "Insurance Claims") including:
(i) negotiating settlement of Insurance Claims presented in respect of the
Required lnsurances;
(ii) collating and presenting all information required by insurers in relation to
Insurance Claims presented in respect of the Required lnsurances, and
(iii) insofar as it is relevant and practicable, liaising with and reporting to each
Authority throughout the settlement, payment and administration of such
Insurance Claims.
(e) to advise the Authority as soon as reasonably practicable upon receipt of notice
of any material changes from the Contractor which we are instructed to make in the
terms of the Required lnsurances and which, if effected, in our reasonable opinion
as insurance brokers would result in any material reduction in limits or coverage or
in any material increase in deductibles, exclusions or exceptions; and
(f) to advise the Authority in advance, to the extent we are actually aware of in
advance, of any material change to the terms of, or any lapse, non-renewal and/or
cancellation of Required lnsurances.
4.5 Insurance Cost Reporting Procedures
5.
5.1
(a) to prepare following request, at the expense of the Contractor, a Joint Insurance Cost Report
on behalf of both the Contractor and the Authority in accordance with the Insurance Review
Procedure as set forth in Schedule 27 of the Agreement attached hereto as Appendix E. We
shall ensure that the information in the Joint Insurance Cost Report is fairly represented,
based on the information available to us.
Notification Details
Our obligations at clause 4 of this letter to notify or inform you shall be discharged by providing
the requisite information in hard copy to:
County Solicitor, Cornwall Council, New County Hall,
Treyew Road, Truro TR1 3AY, Cornwall
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The undertakings given and obligations set out in this letter are given subject to any liability we
may incur to you arising out of or in connection with this letter whether in contract, tort (including
but not limited to negligence) or otherwise being limited in aggregate to £5,000,000.
All liability we may incur to you, whether in contract, tort (including but not limited to negligence)
or otherwise for loss of profit, loss of savings, loss of opportunity or any indirect or consequential
loss is hereby expressly excluded.
No limit of liability shall apply in the case of death or personal injury caused by our negligence, or
in respect of any loss caused by our fraud.
The undertakings given and obligations set out in this letter are given subject to insurers right to
cancel the Relevant lnsurances, are given solely in our capacity as broker to the Contractor,
relate only to the Relevant lnsurances and are subject to our continuing appointment as broker to
• the Contractor. Following termination of such appointment, we are, for the avoidance of doubt
and without prejudice to your accrued rights, released from all our ongoing obligations set out in
this letter.
•
You may not rely on any advice which we have given to the Contractor and we do not represent
that any of the Relevant lnsurances are suitable or sufficient to meet your needs and you must
take steps and advice of your own as you consider necessary in order to protect your own
position.
In the event that this letter is disclosed to any third party, any and all liability howsoever arising to
such third party is hereby expressly excluded to the extent permitted in law.
No person, except you, has any rights arising out of this letter under the Contract (Rights of Third
Parties) Act 1999 .
This letter shall be governed by and construed in all respects in accordance with the laws of
England and Wales.
This letter is given by us at the request of the Contractor and with the Contractor's full knowledge
and consent as to its terms, who confirms that we are authorised to give and comply with the
undertakings and acknowledges that compliance with the undertakings may be in conflict with the
interests of the Contractor, as evidenced by the Contractor's signature below.
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Yours faithfully
For and on behalf of [Contractor's broker]
Accepted for and on behalf of the Contractor
•
•
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PART4-ENDORSEMENTS
LENDERS' AND AUTHORITY'S ENDORSEMENTS
These endorsements are to apply to the Required lnsurances in the Project Agreement and those
insurances required by the Common Terms Agreement other than those insurances required by
law and Professional Indemnity Insurance.
Notwithstanding any other provision of this Policy the following endorsement shall apply:
Section 1: Definitions
1 . In this endorsement
Authority means Cornwall Council
Global Agent means Mizuho Corporate Bank, Ltd in its capacity as global agent for the
Finance Parties and includes its successors in that capacity
Finance Parties for the purposes of this insurance schedule only, has the meaning given
to it in the Common Terms Agreement and includes any assignee, transferee, successor
or novated replacement or additional creditor of or in relation to any of the foregoing
Insured means those parties so described in the Policy Schedule
Company means [name of insurance company]
Joint Insurance Account means the account held in the joint names of Borrower and the
Authority with Mizuho Corporate Bank, Ltd with account number H10-741-087143 and
sort code 40-50-69
Project has the meaning given to it in the Common Terms Agreement
Borrower means SIT A Cornwall Limited
Borrower Insurance Proceeds Account means the account in the name of the Borrower
with Mizuho Corporate Bank, Ltd with account number H10-741-087054 and sort code
40-50-69
Common Terms Agreement means the common terms agreement dated 16 October 2006
(as amended and restated from time to time) and made between amongst others the
Borrower, Hold Co, the Global Agent and the Finance Parties
Security Agent means The Law Debenture Trust Corporation p.l.c.
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Section 11: Policy formation I basis
2. Separate Policy
2.1 This Policy shall operate as if there were a separate policy covering each Insured.
Accordingly the liability of the Company under this Policy to any one of the
Insured shall not be conditional upon the due observance and fulfilment of any
other Insured of the terms of this Policy and of any duties imposed upon it relating
thereto and shall not be affected by any failure in such observance or fulfilment of
any such other Insured
2.2 All the Sums Insured and Limits of Indemnity stated in the Schedule and all limits
on the Company's liability stated elsewhere in this Policy shall be the maximum
amount payable by Company in the circumstances stated in the Schedule or
elsewhere in the Policy irrespective of the number of Persons Entitled to
Indemnity under this Policy in respect of any insured Event or during any Period
of Insurance
3. Interest of the Finance Parties and the Authority
3.1 The Company acknowledges that the Finance Parties and (in respect of third
party liabilities) their respective officers directors and employees are each
additional co-insureds under this Policy arising only from the risk which is the
subject matter of this insurance and that the premium specified in this Policy
provides consideration for their being eo-insured parties
3.2 The Company acknowledges that the Authority and (in respect of third party
liabilities) its officers directors and employees are each additional co-insureds
under the sections of this Policy relating to material damage risks and third party
liability risks arising only from the risk which is the subject matter of this insurance
and that the premium specified in this Policy provides consideration for their being
eo-insured parties
4. Liability for premium
Neither the Global Agent the Finance Parties nor the Authority shall be liable for the
payment of any premium under this Policy although they may choose to pay the premium.
This shall not relieve Project Co from its obligations to pay any premium under this Policy
5. Disclosure
5.1 The Finance Parties shall have no duty of disclosure to the Company in relation to
the Policy. Nevertheless on the written request of the Company the Finance
Parties shall provide the Company with access to any relevant due diligence
report(s) commissioned by the Finance Parties relating to the Project and the
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Company shall keep such report(s) confidential and shall accept such information
without rights of recourse against the party I parties that prepared the said reports
5.2 The Company acknowledge to the Finance Parties alone that (i) they have
received adequate information in order to evaluate the risk of insuring Project Co
in respect of the risks hereby insured on the assumption that such information is
not materially misleading (ii) there is no information which has been relied on or is
required by the Company in respect of their decision to eo-insure the Finance
Parties or their directors officers employees or agents and (iii) in agreeing to enter
into this Policy they have not relied upon or taken into account any information
supplied to them by any Finance Party. The acknowledgements provided by the
Company in this clause 5.2 shall have no effect on any rights that the Company
might have had under or in relation to the Policy against any party (including
Project Co) other than the Finance Parties and the Global Agent in the absence of
such acknowledgements
5.3 Non-disclosure or misrepresentation by one Insured shall not be attributable to
any other Insured who did not actively participate in that non-disclosure or
misrepresentation. Without prejudice to the protections afforded to the Insured by
this endorsement no one Insured represents or warrants the adequacy or
accuracy of any information provided or representation made by or on behalf of
any other Insured
5.4 Subject to clause 5.5 hereof, no party other than the Authority has any authority to
make any warranty, disclosure or representation in connection with this policy on
behalf of the Authority .
5.5 Where any warranty, disclosure or representation is required from the Authority in
connection with this policy the Company will contact the Authority in writing (in
accordance with clause 15 hereof) and set out expressly the warranty, disclosure
and/or representation required within a reasonable period of time from the
Authority (regarding itself). Save as set out in such a request from the Company
to the Authority, the Authority shall have no duty to disclose any fact or matter to
the Company in connection with the policy save to the extent that for the Authority
not to disclose a fact or matter would constitute fraudulent misrepresentation
and/or fraudulent non-disclosure.
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Section Ill: Rights to avoid I cancel or change Policy terms
6. Non-vitiation
6.1 The Insurers agree that the policy shall not be invalidated as regards the
respective rights and interest of each Insured and that the Insurers will not seek
directly or indirectly to avoid any liability under this policy because of any act,
neglect, error or omission made by any other Insured (whether occurring before or
after the inception of the policy), including (without limitation), any failure by any
other Insured to disclose any material fact, circumstance or occurrence, any
misrepresentation by any other Insured, any breach or non-fulfilment by any other
insured whether or not any such act, neglect, error or omission, could, if known at
any time, have affected the decision of the Insurers to grant the policy, to agree to
any particular term or terms of the policy (including without limitation this
provision) and the amount in relation to this policy or to liability which might arise
thereunder.
7. Cancellation
7.1 The Company agrees that they shall not seek to cancel or suspend the
construction phases of this insurance except for (a) non payment of premium or
(b) consistent non compliance by an insured party with insurer's requirements
relating to survey or loss control or if (c) there is a breach of the Joint Code of
Practice.
7.2 The Company shall promptly notify the Global Agent and the Authority in writing in
the event of any suspension cancellation termination or non-renewal of this Policy
by the Company or by the Insured. The cover provided by this Policy shall
continue in force and unaltered for at least 30 days after written notice of such
suspension cancellation termination or non-renewal is given to the Global Agent
and the Authority. Nothing in this clause shall give the Company any right to
suspend cancel or terminate this Policy which the Company do not otherwise
have under this Policy
7.3 The Company shall promptly notify the Global Agent and the Authority in writing of
7.3.1 any default in the payment of premium and shall give the Global Agent
and the Authority at least 30 days notice in writing before cancelling this
Policy for non-payment of premium in order to give an opportunity for that
premium to be paid within the notice period. However where no premium
has been received cancellation will be effective from the date of first
inception of this policy,
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7.3.2 of any act, omission or event of which the Insurers have actual knowledge
(including the non-payment of premium) which might invalidate or render
unenforceable in whole or in part the insurance under this policy, as soon
as practicable after becoming aware of the same;
7.3.3 of any claim under this policy where the claim is in a sum in excess of
£50,000 (before deductibles).
8. Changes in cover
Prior written consent of the Global Agent and the Authority is required before any
reduction in cover or increase in excess or deductible under this Policy takes effect, but
this shall not apply to any new risks that are added to the policy. Further, in no event
shall the Company give the Global Agent and the Authority less than 30 days prior notice
in writing of any proposed reduction in cover or increase in excess or deductible under
this Policy. Nothing in this clause shall give the Company any right which they do not
otherwise have to reduce cover or increase any Insured's contribution or deductible under
this Policy
9. Amendments to Endorsement
During the term of this Policy the provisions of this endorsement may only be amended by
written agreement between Project Co the Company the Global Agent and the Authority
such amendment to be endorsed on the Policy
Section IV: Claims
1 0. Notice of claims
1 0.1 Notice of claim by the Authority or the Finance Parties or any other party entitled
to indemnity under the Policy shall in the absence of manifest error be accepted
by Company as a valid notification of claim on behalf of all other lnsureds subject
to the full terms of the Policy
11. Claim Payments I Loss Payee
Payments made in accordance with this clause 11 shall to the extent of the payment
discharge the Company's liability to pay Project Co or any other Insured
11.1 In respect of the insurance under this Policy of material damage risks only
All claim payments over £50,000 shall be paid into the Joint Insurance Account.
Claims under this or return premium shall be paid into the Joint Insurance
Account or to such other account as the Global Agent as loss payee may specify
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in writing. The Company may at their discretion deduct overdue unpaid premium
from claims settlements but shall not set off or deduct premium that is not overdue
or any other amounts payable by the Borrower under or in relation to the Policy.
11.2 In respect of the insurance under this Policy of public liability risks only
All claim payments in respect of a third party liability shall be paid to person(s)
whose claim(s) constitute the legal liability insured against. Any return premiums
shall be paid to the Borrower Insurance Proceeds Account or such other account
as the Global Agent directs in writing
11.3 In respect of the insurance under this Policy of loss of revenue risks only
• All claim payments or return premiums shall be paid to the Joint Insurance
Account or such other account as the Global Agent directs in writing
•
12. Waiver of subrogation
The Company waive all rights of subrogation howsoever arising which they may have or
acquire against any Insured described within the appropriate Schedules arising out of any
Event in respect of which any claim is admitted and is insured hereunder for the benefit of
such Insured except against any
(i) Insured (or officer director employee agent or assign) who has caused or
contributed to such an Event or claim by fraud deliberate misrepresentation
deliberate non-disclosure or deliberate breach of Policy Condition or
(ii) Insured to the extent that their professional errors omissions or activities not
insured by this Policy have caused or contributed to an Event covered under this
Policy or
(iii) supplier or manufacturer to the extent that their errors omissions or activities not
insured by this Policy have caused or contributed to an Event covered under this
Policy or
(iv) Insured to the extent that they are entitled to Indemnity in respect of an Insured
Event falling within sub-clause 13(a)-(e) below (or would be so insured if cover in
the terms set out in this Policy had not been taken out) or
(v) in relation to losses paid under material damage and loss of revenue Sections for
the operational period any Insured (other than the Authority) who is not covered
under those Sections
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13. Primary insurance
For non-Ell covers:
The Company agrees that this insurance provides the primary cover for risks insured
under this Policy. In the event that any risk insured under this Policy is also insured under
any other policy of insurance effected by any Insured the Company agrees to indemnify
the Insured as if such other policy of insurance did not exist except in respect of
(a) excess layers of third party liability cover effected specifically for the Project
(b) any public liability claim against the Insured which exceeds the applicable limit of
indemnity under this Policy in which case the liability of the Company for
additional legal costs and expenses shall be limited to the proportion that the
applicable limit of indemnity bears to the total claim against the Insured
(c)
(d)
(e)
any claim under this Policy to which a Marine 50/50 Clause applies
any claim made under a Contingent Motor Liability extension to this Policy or
any claim relating to a loss which is insured against (or would be insured but for a
double insurance provision or similar or the application of a deductible} under
(i) any other policy specifically effected for the construction or operational
phase(s) of the Project or
(ii) a latent or inherent defects policy or engineering or mechanical
breakdown policy specifically effected for the Project or
(iii) a related Business Interruption insurance policy
For the Ell policy, the following applies:
This policy is primary except in relation to sudden and accidental pollution cover afforded
by the third party liability policy, where this policy will act in excess of any claims monies
paid by that policy.
Section V: Miscellaneous
14. Notice of Security Interest
The Company acknowledge that by an assignment contained in a debenture dated 16
October 2006 (the "Assignment") the Borrower assigned by way of security to the Finance
Parties all benefits and rights in respect of this insurance and all claims and returns of
premiums in respect thereof to which the Insured is or may at a future time become
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entitled. The Company confirms that they have not been notified of any other assignment
of or security interest in the Borrower's interest in this insurance
15. Notice
15.1 All notices or other communications under or in connection with the Policy will be
given by tax and post. Any such notice given by the Company will be deemed to
be given on the earlier of
15.1.1 if by tax when transmitted but only if the sender's fax machine confirms
successful transmission and
15.1.2 if by post within 2 business days of release from the relevant Company's
office .
15.2 The address and tax number of the Global Agent for all notices under or in
connection with the Policy are those notified from time to time by the Finance
Parties for this purpose to the insurance broker at the relevant time the initial
address and tax number of the Global Agent is as follows
The Global Agent: Mizuho Corporate Bank, Ud
Address: Bracken House, One Friday Street, London EC4M 9JA
Fax No: +44 207 0112 4053
Attention: Loans Agency
15.3 The address of the Authority for all notices under or in connection with the Policy
• are those notified from time to time by the Authority for this purpose to the
insurance broker at the relevant time the initial address of the Authority is as
follows
The Authority: Cornwall Council
Address: New County Hall, Treyew Road, Truro TR1 3AY, Cornwall
Attention: County Solicitor
16. General
16.1 The Insurers acknowledge that they have received consideration for their agreement to
eo-insure the Finance Parties and the Authority.
16.2 This endorsement overrides any conflicting provision in this policy.
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PART 5- Not used
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Part6
Definitions
"Revenue" is defined as the projected Unavoidable Fixed Costs and Senior Debt Service Costs
of the Contractor.
"Senior Debt Service Costs" shall mean interest and debt service costs incurred in respect of
the Senior Financing Agreements less
(a) sums which are in arrears;
(b) all sums reserved by the Contractor and which the Contractor is entitled to use to
make such payments, without breaching the Senior Financing Agreements.
• "Unavoidable Fixed Costs" should mean the fixed costs incurred by the Contractor which first
fall due for payment by the Contractor during the period of indemnity but excluding:-
•
(a) costs which could have reasonably been mitigated or avoided by the Contractor;
(b) payments to the Contractor's Associated Companies;
(c) payments which are not entirely at arm's length;
{d) payments to holders of equity in the Contractor, Subordinated Lenders and any other
financing costs other than Senior Debt Service Costs;
(e) indirect losses suffered or allegedly suffered by any person;
(f) fines, penalties or damages for unlawful acts, breaches of contract or other legal
obligations;
(g) payments the Contractor can recover under contract or in respect of which the Contractor
has a remedy against another person in respect of the same liability;
(h) payments to the extent that the Contractor has available to it
i. reserves which the Contractor can draw upon without breaching the Senior
Financing Agreement;
ii. standby or contingent facilities or funds of Senior Debt or equity which the
Contractor is entitled to have available;
(i) payments representing any profits of the Project (to the extent not already excluded in (e)
above).
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