PROFESSIONAL LIABILITY ISSUES

DIANA L. FAUST Cooper & Scully, PC

900 Jackson Street, Suite 100 Dallas, Texas 75202

(214) 712-9500 (214) 712-9540 (Fax)

diana.faust@cooperscully.com

State Bar of Texas 4TH ANNUAL ADVANCED

INSURANCE LAW COURSE March 29-30, 2007

Dallas

CHAPTER 15

Curriculum Vitae

DLANA L. FAUST

Cooper & Scully, P.C. Founders Square

900 Jackson Street, Suite 100 Dallas, Texas 75202

(214) 712-9538 FAX: (214) 712-9540

email: diana.faust~cooperscul1v.com www .cooperscully .com

BIOGRAPHICAL INFORMATION

EDUCATION Southern Methodist University J.D. - 1995 Cum Laude

University of Houston - Clear Lake BBS - 1990-1992 Magna Cum Laude

ACTIVITIES e Judicial Intern, Summer 1994, Briefing Intern assigned to Hon. Craig Enoch

e A.J. Thomas Outstanding Third Year Student 1995 * Advanced Moot Court Briefing Director 1994-1995 o Texas Monthly 2005 Rising Star e Sky Radio Network, America's Most Injluential Women,

February, 2007

PUBLISHED e Evolving Issues: Extrinsic Evidence and the Duty to Defend WORKS (Winter 2006)

0 Unchartered Water: Navigating the Pitfalls of Texas Civil Practice and Remedies Code Section 52.006 and Texas Rule of Appellate Procedure 24.2 - Post-Verdict Solutions (March and December, 2006)

a Products Liabiliiy Afier House Bill 4,46 SO. TEX. L.&V. 1159 (Summer 2005)

o Filing and Clzallenging Article 4590i, Section 13.01 Expert Reports (November, 2000)

e What Does it Mean Now?, 1999 Texas Insurance Law Symposium, (November., 1999)

TABLE OF CONTENTS

. . . . . . . . TABLE OF CONTENTS

. . . . TABL.E OF AUTHORITIES

I . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

D . Historical Development of Professional L.iability Insurance for Attorneys . . . . . . . . . . . . . . . . . . 1

III . Bases of Liability and Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - . . . . . . . . . . . . . . . . . . . . . 1

IV . Considerations in Purchasing Attorney Professional Liability Insurance . . . . . . . . . . . . . . . . . . . . 3

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A . Claims-Made Form 3

. . . . . . . . . . . . . . . . . . . . . B Insuring Clause

C . Professional Services or Legal Services . . . . . . . .

D . Wrongful Act . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . E . Duty to Defend

F . Disciplinary Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

G . Defense Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

H Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

I . Additional Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

J . Exclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

V . Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

TABLE OF AUTHORITIES

Abetter Trucking Co. v. Arizpe, 113 S W.3d 503 (?'ex.App.-Houston [Ist Uist.] 2003, no pet.)

Alexander v TUI trrr & Assocs , Inc , 146 S W 3d 113 (Tex 2004)

Ballesteros v Jortes, 985 S.W.2d 485 (Tex. App.-San Antonio 1998, pet denied)

Bzo-row v AI ce, 997 S W 2d 229 (Tex. 1999)

Calzt~r v Horany, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 S.W.3d 86'7 (Tex. App.-Dallas 22006, no pet ) 2

Cbsgr ove v GI imer, 774 S.W;2d 662 (Tex.1989)

Douglas v Delp, 98'7 S.W.2d 879 (Tex. 1999)

Hall 1). Rutherford, 91 1 S.W.2d 422 ('Tex App.-San Antonio 1995, writ denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Ititer~ia~ional Barilcers Life Irv Co, v Hol lo~~ay , 368 S W.2d 56'7 (Tex. 1963) . . . . . . . . .

Jarnes V Mazuca & Assocs 11 Schu17tari1ti, 82 S.W.3d 90 (Tex. App.-San Antonio 2002, pet denied )

Jampole 11 Ma~tliews, 85'7 S W 2d 5'7 ('Tex App -Houston [lst Dist ] 1003, writ denied)

Johrtsolt v Breiver & Pritchard, P. C., 73 S.W.3d 193 ('Iex. 2002). .

Kaltlt v Seely, . . . . . . . . . . . . . . . . . 980 S.W.2d '794 ('Tex App-San Antonio 1998, pet. denied)

Lathant v Castillo, 9'72 S.w 2d 66 (Tex 1998)

Likovel v Suriflo~~er Terrace, 696 S.W.2d 468 (Tex App.-Houston [lst Dist.] 1985, no writ)

Lopez v. Mtr~toz, Hocltenta & Reed, 22 S.W.3d 857 (Tex. 2000)

111 re Natio~zal S tude~~t Marlceting Litigation, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 445F.Supp 157(D.C.D.1978) 1

Qrrerner 11. Rindfirss, 966 S W.2d 661 (Tex. App.-San Antonio 1998, pet denied)

SuNii1a11 11. Biclcel & Brewer., 943 S.W.2d 477 (Tex. App -Dallas 1995, writ denied) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Wrigl~t 11. Cl~rirtiarz & S~ltith, 950 SW.2d 41 1 (Tex. App.-Houston [lst Dist.] 1997, no writ)

Zenith Star 111s Co 1,. WilIcer:ron, 150 S.W.3d 525 (Tex.App.-Austin 2004, no pet.) . . . . . . . . . . . . . . . . . . . . .

Statutes. Rules & Constitutions

15 U.S.C. 5 77 . . . . . . . . . . . . . . .

Miscellaneous

3 ROWLANDH. L.ONG, THEL,Aw OF LLABlLrN INSURANCE, 5 lZC.O1[1]

Professionat Liability Issues Chapter 15

I. Introduction

Nationwide, the availability of relief' by a client (and sometimes, a nonclient) against an attorney has expanded over the last 60 years With remedies expanding, professional liability insurance for attorneys has, over time, become less available and more expensive. Unlike physicians and health careproviders, the Legislature has not concluded that claims against attorneys be regulated or governed by statute, and, as a result, shortages in the availability of professional liability insurance have not reached a perceived crisis level in the State.

'This paper will explore the historical framework underlying the current market fbr professional liability insurance, will discuss some of the available remedies against attorneys, and will present considerations for evaluation of coverage by the attorney insurance consumer, in light of fbur current specimen policies issued by caniers in the Texas market.

11. Historical Development ofProfessional Liability Insurance for Attornevs

As statutory developments emerged throughout the twentieth century,' the need fbr professional liability insurance for attorneys also expanded. Policies were offered beginning in the 1940s and by the 1960s, most law firms owned insurance policies covering not orily indemnity fbr professional error, but also providing coverage for defense costs.' Policy language was, many times, negotiated by various bar associations3 Attorneys historically hit with the largest per capita numberofmalpractice lawsuits were theplaintiffs' bar4 Through the 1970s, investment advisors and attorneys practicing in the securities area were goups against whom claims began to soar; those practicing in the real estate field also became targets, with the expansion of construction of' homes and the evolving transient nature of the American population fueling the increasing

' See 3 ROWLAND H LONG, THE LAW OF LIABILITY INSURANCE, 5 12C O l [ l ] , cllrrzg 26 U S C 5 1, el seq (Internal Revenue Code); 15 U S C 5 7'7, el seq (Securit~es k c t ) ; 15 US C . 5 78, el req (Securities %change Act) (2006)

numbers of'real estate transactions The nature ofcivil and criminal issues arising in securities claims has been cited as only one example ofthe millions of dollars of claims dollars paid in awards and settlement, such that premiums escalated and re-insurers left the market, resulting in an insurance crlsis by the mid-1980s.6 Liability trends continued though the 1990s, firms carried less insurance and paid two to four times as much as they did years earlier for much more coverage '

Early policies were written on a claims-made basis, utilizing standard forms and a policy period of one year.' By the 1970s, insurers began inserting exclusions into liability policies concerning fraud, criminal activity, punitive damages, ERISA claims, and bodily injury.' By the mid-1980s and the insurance shortage, insurers made a "virtual uniform change" to include defense costs within policy limits, and included the insurer's right to control the defense." Today's policies are similar to accountants' policies, and are usually purchased from a commercial canier and sometimes through a professional society or bar association." Current policies are on a claims-made fbrm, and generally include retroactive coverage as well as extended reporting coverage, and defense costs are charged against the limits of' liability under the policies "

a. Bases of Liabilitv and Damaees

Under Texas law, various bases for actions against attorneys are available. Some include: (I) negligence or legal malpractice; (2) breach of fiduciary duty; (3) violations of' state or federal statutes; (4) common law fsaud; and (5) breach of contract. Both suits by clients

' Id

Id , citir~g In 1e Naliorzal Sfudeill Ma? keting Lirigario?i, 445 F . Supp. 15'7 (D C.D. 1978).

~d

8 12C 0 1 [ 2 ] .

~d

lo Id

"Id 5 12C 01[3]

' I Id

Professional Liability Issues Chapter 15

and suits by nonclients may be penni~sible. '~

A legal malpractice action in Texas is based on negl igen~e. '~ The elements of a legal malpractice claim are: (1) a duty; (2) a breach of duty; (3) the breach proximately caused the injury; and (4) resulting damages I s When a legal n~alpractice claim arises from prior litigation, the plaintiff has the burden to prove that but for the attorney's negligence, he or she would be entitled to judgment, and to show what amount would have been recovered in the judgment. 'Vhis is commonly referred to as the "suit within a suit" requirement." Examples of client actions for negligence can range from the failure to file court papers in a timely fashion, to failure to advise the client or furnishing negligently incorrect advice to the client, and failure to investigate and evaluate the legal and factual aspects of ihe case.

Breach of fiduciary duty arises out of the special relationship existing between attorney and client, and can involve failure to represent the client without conflict and failing to preserve client confidences." The elements of the cause of action include: (1) plaintiff and defendant had a fiduciary relationship; (2) defendant breached its fiduciary duty to the plaintiff; (3) the defendant's breach resulted in injury to the plaintiff

or benefit to the defendant." Remedies include actual damages, including economic damages (out-of-pocket losses and lost profits), mental anguish damages. exemplary damages, and equitable relief, such as fee forfeiture 20 Prejudgment and postjudgment interest are recoverable, as well as taxable costs; attorney's fees are not recoverable unless recoverable by statute or in equity.

Statutory claims involving violation of federal law can arise under both the Securities Act and the Civil Rights Act. Under state law, the Texas Deceptive Trade Practices Act provides limited means of redress based on a claim involving the rendering of professional service^.^' The claim must not involve claims based on the rendition of professional services characterized as advice, judgment, opinion, or similar professional skill." This is because these areas are reserved for a negligence suit." Examples of DTPAclaims against an attorney include misrepresentation, failure to disclose, unconscionable action, breach ofwananty, or involving the sale or illegal promotion of annuity contract^.^" Remedies may include actual damages, menial anguish, multiplied damages, and attorney's fees.

Common law fraud is also an available cause of action, the gist of which is deception about an existing fact." Examples have included overcharging by attorneys on contingency fee contracts or excessive

"See Lllcover 1, S1117floi~~e1 Tertace, 696 S W 2d 468 (Tex App.-Houston [Ist Dist ] 1985, no writ)

'Tosgrove v Grbrter, 774 S W 2d 662, 664 (Tex.1989); Zeititlr Star Iits Co 1, if'ilkerso~t, 150 S.W.3d 525, 530 (Tex.App -Austin 2004, no pet.); Hall 11 Rutherfo~.d, 91 1 S.W.2d 422,424 (Tex App-San Antonio 1995, writ denied)

" Alexander v Twtrrr & As,socs, Iitc , 146 S.W 3d 113, 117 (Tex. 2004); Cairtu v Horaiy, 195 SW 3d 867, 873 (Tex. App.-Dallas 22006, no pet.); Hall, 91 1 S W.2d at 424.

" Caitru, 195 SW3d at 873; Hall, 911 S.W.2d at 424,

I7 Ballerlei or 1, Jolter, 985 S W 2d 485,489 (Tex App -San Antonio 1998, pet denied)

's.Johnso~7 1, Brewer & Pritchard, P C , 73 S W.3d 193 (Tex 2002) (citing examples of fiduciary relationships); Burrow v Arce, 997 S.W 2d 229 (Tex. 1999) (holding client need not prove actual damages to obtain fee forfeiture in breach of fiduciary duty claim); Abetter Trucking Co ir Arizpe, 113 S W.3d503,508 (Tex App-Houston [IstDist.] 2003,nopet.) (stating elements of breach of fiduciary claim, including damages )

"See B~irrow, 997 S.W 2d at 243; Do~rglar 1, Deb, 987 S.W.2d 879,884 (Tex. 1999); IntrrrtolioitalBankE,.s L$e 111s Co v Hollon~aal)~, 368 S.W.2d 567, 584 (Tex 1963) See olsoKahn v. Seely, 980 S.W 2d 794, 799 (Tex App-San Antonio 1998, pet. denied).

2' See Lathant v Carlillo, 972 S w 2d 66, 69 (Tex 1998) (stating elements of claim for unconscionable conduct recovery under DTPA, including damages pursuant to section 17 50(a)(3)

" TEX. BUS & COM CODE ANN 5 17 49(c)

23 See.lonter Mazuca & Asrocr 11 Schumaititr, 82 S W 3d 90,94 (Tex App -San Antonio 2002, pet denied )

"See TEX BUS & COM CODE ANN 17 49(c)(l), (2), (3), (4), (5)

" S~rllivait v Bickel & Breiser, 943 S W i d 477, 481 (Tex App -Dallas 1995, writ denied). SeeDeSa17ti.s v iP'ackenhrrt Corp , 793 S W 2d 670,688 (Tex 1990) (stating elements of Fraud claim, including injury to party claiming fraud)

Professional Liability Issues Chapter. 15

legal fees, and knowing participation in fsaudulent activities while acting for the ~ l i e n t . ' ~ Remedies may include actual damages and exemplary damages.

Breach of contract claims can be bmught by clients against attorneys and the focus of the claim is whether the attorney performed the contract according to its terms. An example includes disputes over legal fees?'

rV Considerations in Purchasing Attorney Professional Liability Insurance

As the areas of legal practice continue to become more specialized, the adoption of collaborative law procedures, arbitration, mediation, and other alternative dispute resolution procedures continue to evolve and become mandatory, and with common law and statutory bases of'both quasi-criminal, punitive, and civil liability for the attorney, it becomes even more important for the attorney and law firm to become an educated consumer in considering the purchase of attorney professional liability insurance In addition to the obvious considerations of deductibles, self-insured retention, and the categories of individuals or entities that may be insured under any given policy, some important points to consider when evaluating the pros and cons of' coverages provided for under any policy should also include:

* Does the claims-made policy provide for reporting after the expiration of the policy?

* How are "professional services" or "legal services" defined?

* What constitutes a "claim" under the policy?

* How limited is the definition of "wrongfbl act?"

* Does the insured retain counsel of its own choosing?

'6 See Lopez v Munoz. Hockenla &Reed, 22 S.W.3d 857,859 (Iex. 2000); Ja~npole i c Marrhous, 857 S.W.2d 5'7,59 (T'ex App-Houston [Ist Dist.] 1003, writ denied). See also Qlrelner 11 Rindfirss, 966 SW2d 661, 666 (Tex. App.-San Antonio 1998, pet. denied).

27 See, e g , Lopez 11 Mtr~toz, Hockenla & Reed, 22 S W 3d 857, 859 (?'ex 2000) (contingency fee contract). K'righr v Cl~rirlian &Smith, 950 S W.2d411,412 (Tex App.-Houston [I" Dist ] 1997, no writ) (stating elernenis of hreach-of- contract claim, including damages arising 60m breach)

* Does the policy require consent to settle?

* Is there coverage for disciplinary and grievance proceedings?

* Are punitive damages covered?

Examinationof four cunent specimen policy forms written by St. Paul Fire and Marine Insurance Company [Ir' Choice Lawyers Professional Liability Pmtection (revised 2003)], Greenwich Insurance Company [Psofessionai Liability Insurance for Lawyers Claims Made and Reported Policy (March 2006)], Great American Insurance Company [Legal Professional Liability Claims-Made Fonn (March 1997)], and Chubb [Pro Lawyers Professional Liability (April 2004)l reveals that although the market provides choices for carriers, similar coverages are available, The four specimen policies are attached in the Appendix to this paper.

A. Claims-Made Form

Each of the policies are written on a claims-made form. The Chubb Pro Lawyers Professional Liability Insurance policy is claims made and not reported In other words, an insured may report a claim after the expiration of the policy period as long as the insured continues to renew with Chubb

But, what constitutes a claim? A claim means a "demand that seeks damages" under the St. Paul policy. Suit would include a civil proceeding seeking damages, including arbitration (participation mandatory or with insurer's consent) or any other alternative dispute resolution proceedings for damages (participation requires insuser's consent).

Greenwich defines claim more broadly, to include "any demand received by you for money, services or any other thing of value arising out of your acts, errors or omissions in providing professional services "

Great American also includes personal injury (a defined term) arising out performance of professional services

Chubb defines a claim broadly, to include:

* written demand for money or non-monetary relief;

* written demand for arbitration;

Professional Liability Issues Chapter 15

* civil proceeding;

* civil administration or regulatory proceeding, including a disciplinary proceeding; or

* written requested received to toll or waive statute of limitations relating to a potential claim.

B. Insuring Clause

The coverage agreement or insuring clause is the most important starting point in evaluating the claims- made form

For example, the obligation of St. Pant to its insured is to pay amounts any protected person is legally required to pay as damages for covered loss that (1) results from the performance of, or failure to perform, legal services by or on behalf of any protected person; and (2) is caused by a wrongful act committed on or after any retroactive date of the agreement.

Greenwich and Great American modify the St. Paul coverage agreement language, to include additional damages and defense or claim expenses arising out of a claim or pre-claim (early-reported) incident that you first become aware of and report in writing during the policy period.

Assuming a claim has been timely reported or made, each policy provides coverage for damages or loss on behalf of the insured, for a wrongful act - committed by the insured.

St. Paul defines damaees to include compensatory damages imposed by law, and punitive or exemplary damages imposed by law if such damages are insurable under the applicable law. Not included are fines, penalties, forfeitures, sanctions, and legal fees charged or incurred by any insured. The policy pays for some disciplinary proceeding expenses, but no duty to defend in such a proceeding exists. Defense costs are included within, are paid first, and reduce the limits of liability.

Greenwich and Great American define damaees to mean a monetary judgment or award, or a monetary settlement which Greenwich agrees to on the insured's behalf, but does not include punitive damages, fines, penalties, court-imposed monetary sanctions, or return of legal fees, costs or expenses

Chubb defines ]oss to include compensatory damages imposed by law, and punitive or exemplary

damages imposed by law if such damages are insurable under the applicable law, judgments, settlements, pre- judgment and post-judgment interest and defense costs.

C. Professional Services o r Legal Services

St. Paul and Great American define "legal services" to mean those "professional services performed, or failed to be performed, for others as duties in any of'the following capacities, regardless of whether or not a fee is charged for such services:

(1) lawyer, other than a city or county attorney;

(3) city or county attorney;

(4) lobbyist;

(5) mediator,

(6) notary public;

(7) administrator, conservator, receiver, executor, guardian, trustee, or any similar fiduciary capacity directly connected with the person's practice of law.

In addition to that provided in the St. Paul policy, Greenwich includes services provided as:

( I ) a title agent;

(2) a member o f a bar association or other legal or lawyer related ethics, peer review, accreditation, licensing or similar board, committee, or organization; or

(3) an author, but only for the publication or presentation of research papers or similar work and only if the fees generated annually from all such work are less than $25,000.

Chubb includes most of the above, but adds services provided as:

(1) governmental affairs advisor; and

(2) paralegal or legal assistant, solely in connection with the performance of professional services. Chubb expresses within its coverage agreement that it does not apply to the provision of any financial or investment advice.

Professionnl Liability Issues Chapter 15

D. Wroneful Act

Ideally, a broad definition of "wrongful act" is preferred. The St. Paul policy, for example, defines the term to include: (I) error, omission, or negligent act; or (2) personal injury offense. Chubb broadens the definition somewhat, including any "actual or alleged" act, error or omission committed, attempted, or allegedly committed or attempted, solely in the performance of or failure to perfbrm professional services.

E. Duty to Defend

The policies similarly address the duty to defend The duty to defend extends against a claim or suit for loss covered by the agxeement, even if the allegations of suit or claim are groundless, false, or fraudulent When the insurer defends, it should pay defense expenses incurred by or for the insured

The right to select defense counsel is not a right afforded the insured; rather, the right is retained by Greenwich, Great American, and St. Paul under their policies.

Some policies provide for the right to appeal a judgment for covered damages, and insurers will pay the cost of an appeal bond, but only for that part of the judgment for covered damages. Importantly, most policies state that the insurer will not be the principal under any appeal bond, and the insurer does not have the duty to furnish an appeal bond. The bond costs are supplemental to the limits of coverage.

Unlike the other three carriers, Chubb places the duty to defend claims and to retain qualified counsel onto the insured, with prior written consent. Chubb does give the insurer the right to associate with the insured, and requires that it be consulted in advance regarding investigation, defense, and settlement of claims. Chubb may withhold consent to representation of one insured by another insured, or if more than one insured is involved in a claim, to withhold consent for separate counsel, unless there is a material actual or potential conflict of interest among the insureds.

F. Disci~linarv Proceedines

The policies treat disciplinary proceedings consistently. Noduty to defendagainst any disciplinary proceeding generally exists under the professional liability policy. Nonetheless, some policies provide for disciplinary proceeding expenses where the proceeding:

(1) results from the performance of; or failure to perform, legal services by or on behalf'of'any protected person; and

(2) is caused by a wrongful act committed on or after any retroactive date that applies and before the ending date of the policy.

The disciplinary proceeding includes those conducted by any bar association or state regulatory or disciplinary official or agency

The Greenwich policy, for example, limits defense expenses to a maximum of $30,000 per policy period, while Great American limits expenses to $10,000 per policy period, but under both policies, the amounts paid do not reduce the limits of'liability. Other policies are silent on maximum limits for defense expenses associated with disciplinary proceedings.

G. Defense Expenses

The policies also similarly define defense or claim expense. Importantly, defense costs are included within, me paid first, and reduce the limits of liability under each of'the policies. Defense or claim expenses are those expenses that result directly fi.om the investigation, defense, or appeal of a specific claim or suit, and include: fees, costs, and expenses of hired or appointed attorneys; costs of proceedings involved in the suit, including fees ofcourt reporters, arbitrators and mediators; fees for witnesses; and independent experts and special investigator fees, costs, or expenses incurred by attorneys appointed by the caniers

H. Consent

Another important consideration is how the camer will handle settlement and issue of consent to settle. The St. Paul policy gives St. Paul the right to settle any claim or suit, however, it won't agree to the final settlement of any claim or suit without the insured's consent. If consent is refused, the policy will not pay more than the combined total of the damages and defense expenses incurred after the refusal to give consent.

Similarly, Greenwich will not settle without consent, and if the insured refuses to consent within a reasonable time or if consent is not provided, liability for the claim will not exceed the amount fbr which the claim could have been settled, plus defense expenses incurred up to the date of the refusal of consent or election to contest the claim,

Professional Liabilily Issues Chapter 15

Great American requires the insured to communicate within a reasonable period the consent or objection to any claim settlement it proposes But if an objection to any settlement is made, the insured must take full responsibility for, and pay for, further defense and settlement of the claim. Under these circumstances, the insurer is obligated to the amount proposed for settlement and claim expenses incurred through the time of receipt of the objection

Chubb places the duty to defend claims and to retain qualified counsel onto the insured, with prior written consent. Chubb does give the insurer the right to associate with the insured, and requires that it be consulted in advance regarding investigation, defense, and settlement of claims. Chubb may withhold consent to representation of one insured by another insured, or if more than one insured is involved in a claim, to withhold consent for separate counsel, unless there is a material actual or potential conflict of interest among the insureds Chubb requires that the insured not settle or offer to settle or incur any defense costs, to assume contractual liability, or admit liability without its prior written consent.

I. Additional Payments

All the policies include supplementary or additional payments provisions.

St. Paul provides for express additional payments, including: (1) its expenses other than defense expenses; (2) cost of bonds to release property used to secure a legal obligation, but only within limit of coverage; (3) expenses incurred by insured; (4) taxed costs; (5) prejudgment interest accruing before the date of a settlement offer to pay policy limits; and (6) post- judgment interest.

Greenwich considers the disciplinary proceedings defense expenses as supplementary, as well as other payments for loss of earnings and reasonable expenses incurred at Greenwich's request for attendance at trial or other proceedings The reimbursement is capped at $500 per day, $5,000 per claim, and $25,000 per policy period.

Great American similarly covers lost earnings and reasonable expenses incurred at its request, but these payments at $2501$5,000/$20,000

J. Exclusions

Similar exclusions are contained within the

attorney's professional liability policies

The St. Paul policy excludes:

(1) criminal, dishonest, or fraudulent wrongful acts or knowing violation of rights or laws; and

(2) known wrongful acts

Nonprofit services liability also excludes (I) claims or suits brought or made by the nonprofit entity; (2) ERISA or similar state violation; and (3) failure to obtain or maintain insurance or bonds.

In addition, Greenwich excludes any claim:

(1) arising out of activities as an investment advisor or accountant;

(2) arising out of activities as a fiduciary under ERISA;

(3) seeking damages for physical harm, sickness or death of any person;

(4) seeking damages for destmction, diminution in value or loss of use of tangible property;

(5) by an insured against another insured;

(6) involving liability of others assumed under contract or agreement;

(7) arising out of loss or destruction of or diminution in value of any asset in the insured's care, custody or control, or out of the misappropriation of or failure to give an account of any asset in the insured's care, custody, or control, including commingling of client funds.

Great American further excludes:

(1) acts, errors, or omissions while acting as a securities, real estate, or insurance broker, dealer, agent, or trader;

(2) acts, errors, or omissions while acting as a public officer or employee of governmental or quasi- governmental body, subdivision, or agency;

(3) sickness, disease, disability, disfigurement; and

(4) claim asserted against the insured as a beneficiary 01. distributee of a trust or estate

Professional Liability Issues Chapter 15

Chubb further excludes any claim based on:

(1) actual or alleged infringement of any certification mark, copyright, patent 01. trademark (including collective or service marks), trade secret, trade name, trade dress, misappropriation of ideas or other intellectual property; and

(2) the insured having gained any profit, remuneration or advantage to which he was not legally entitled.

V. Conclusion

While remedies for clients continue to expand under the common law and statutory law, options for expanded coverage under professional liability insurance for attorneys should not be expected. Rather, the market provides similar coverages, exclusions, and duties of the insurer and the insu~.ed Until a shortage of the availability of'coverage exists, this historical market trend will not likely change. Consequently, careful evaluation of the attorney's practice areas, ethical responsibilities to his or. her. client, and areas of potential liability must be undertaken when making a determination or selection of legal professional liability insurance

THE ST. PAUL PROFESSIONAL LIABILITY

GENERAL RULES .- TEXAS

This form contains various rules and changes that apply t o your policy. I t and the rest of your pol icy should be read carefully t o determine:

the extent o f the coverage provided by your policy; and the rights and duties o f you and any other person or organization protected under your pol icy.

Table of Contents Page

General Rules 1 Special Rights And Duties Of The First

Named insured 1 Policy Period 1 Policy Changes 2 Premiums 2 Our Right T o Inspect And Audit 3 Cancellation 3 Fraud And Material Misrepresentation 6 Assignments And Transfers 7 Lawsuits Against Us 7 Recovering Damages From A Third Party 7 Appraisal O f A Covered Loss Amount In

Dispute Under Property Or Other First- Party Protection 8

Bankruptcy Or Insolvency Of Any Person Or Organization Protected Under Liabi l i ty Protection 8

How Statutory Or Regulatory Law A f fec ts Your Pol icy 8

What To Do I f You Have A Loss B I f Your Policy Provides Property Or

Other First-Party Protection 9 I f Your Policy Provides Liabi l i ty

Protection 9

Changes That Apply I f Your Policy Provides Property Or Other First-Party Protection 12 Claim Handling A n d Payment Deadlines 12 Other Insurance 13 Special Rule - Art ic le 13 - Fire Policy As

Liquidated Demand 13

Changes That Apply I f Your Policy Provides Liability Protect~on 13 Claim Settlement Notice Deadlines 14 Intellectual Property Exclusion 14

General Rules

This General Rules section applies on ly i f the address shown for you in the lntroduction o f your pol icy is i n Texas. i f so, this General Rules section applies i n place o f any other General Ruies f o r m or section that is part o f your policy.

Special Rights And Duties Of The First Named Insured

When more than one insured is named in the lntroduction o f your policy, the f i r s t named insured has special rights and duties. Those rights and duties are explained in the fo l lowing General Ruies: o Cancellation. 0 Policy Changes. o Premiums.

Policy Period

Insuring agreements or endorsements in your po l icy begin on your policy's e f fec t ive date at 1201 a.m. at the address shown fo r you in the lntroduction o f your pol icy. But if your pol icy replaces a po l icy that ends at noon, rather than '12:01 a.m., coverage under your pol icy begins on your policy's e f fec t ive date at noon at such address.

Commercial General Liabi l i tv Protection - Certain Changes

Public Enti ty General Liabi l i ty Protection - Asbestos Exclusion

Umbrella Excess Liabi l i ty Protection - Certain Changes

Insuring agreements or endorsements added t o your pol icy after your pol icy's e f fec t ive date begin on their respective e f fec t ive dates at 12:01 a.m. at the address shown for you in the lntroduction o f your policy.

Coverage under your pol icy ends on your policy's expiration date at 12:01 a.m. at the address shown fo r you in the lntroduction o f your policy. But i f a l l or part of your po l icy is canceled fo r any reason before that date, the canceled coverage w i l l end on

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the caricellation date at 12:01 a.m. at such address.

Policy Changes

Your policy contains all of the agreements between you and us concerning the coverage provided by your poi!cy and can be changed only as described in this rule.

We can make changes in our standard insurance policy forms from time to time. Such changes must conform to applicable law and may be filed with insurance regulatory authorities for approval.

If we make any such change, while your policy is in effect, that:

would broaden or extend the coverage your policy provides; and

0 can be legally added t o your policy without increasing your premiurn;

you'll automatically receive the benefit of the broadened or extended coverage beginning at: e 12:01 a.m.; or D noon, i f coverage urider your policy

otherwise begins at that time;

e is signed by us or one of our authorized representatives. i

Premiums

We compute the premium for your policy in accordance with our rules and rates which apply to your policy.

Estimates. All or part of your premium may be based on estimates.

If estimates are used, your policy wi l l contain an endorsement, summary. or other form that shows:

we used estirnates; and o when and how we'll compute your actual

premium.

We'll compute your actual premium, when complete information is available, at the end of: 0 the policy period; o each one-year period that's part o f the

policy period, i f the policy period is longer than one year; and -

e any interim audit period that's shorter than one year. i f an interim audit period

on the effective date of the change at the applies during the policy period. i address shown for you in the Introduction For each such period, we'll compute your of your policy. actual orernium in accordance with our rules . -

and rat& which apply t o your policy and If we make any such change before your for that period. oolicv beqins and that change st111 applies i o a stanaard insurance polizy form 'which: your actual prenlium is: 0 is part of your policy when your. policy e more than the estimated premium you've

begins; or paid, you'll owe us the difference; or is rnade part of your policy after your 0 less than the estimated prernium you've policy's effective date; paid, we'll return the difference;

you'll automatically receive the benefit of except as described i r i the Additional or that broadened or extended coverage return premium section. beginning at the tirne and on the effective date that form is, or is made, Part of Your You must keep accurate records of the policy. information we'll need t o commte vour

actual premium. Your agent o i broker can We don't have to provide any written explain the type o f records we'll need. The notice, or a written form that's made part o f your policy, for you to receive such

first named insured must mail, deliver. or otherwise give t o us a copy of those

benefits. records when we request ttiern.

We can make other changes in Your policy H ~ ~ ~ ~ ~ ~ , we don't have to request or use and, with our consent, the f irst named any records t o compute your actual insured can make changes in your policy premium i f we determine, in accordance too. But such changes can be made only with a written form that:

with our rules and rates which apply t o your oolicv. that vour orernium based on

0 is made part o f your policy; and kstiin'ites is actual premium.

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Additional or return remium. We or your agent or broker w i I' I tell the first named insured about any additional or return premium for your policy.

However, we won't charge an additional premium, or refund a return premium, for any difference in premium o f $15 or less that results from: 0 your actual premium being more or less

than the estimated premium you've paid; or

o any change made in your policy, including any cancellation of all or part of your policy by you or us.

But we'll refund a return orernium o f $15 or less for your policy i f the first named insured requests that we do so. We'll apply this rule for waivina additional or return premiums separately each time your policy is changed.

In any event, your policy premium won't be less than the minimum policy premium we're allowed to charge in accordance with our rules and rates which apply to your policy.

Your bill. The first named insured: e will be the one we'll bi l l for all premiums

for your policy; is responsible for paying all premiums for your policy when due; and

e wil l be the one to whom we'll pay any return premium for your policy.

The due date for each premium owed us for your policy is the date shown as the due date on your bil l for that premium.

I f the first named insured is also the first named insured under:

any other policy with us; or 0 any policy with any o f our affil iated

insurance companies; we may bill, under one statement, the premium for: 0 your policy; and 0 any or all of those other policies; regardless of their type. what they cover, or their policy periods.

I f we bil l the premium for such policies under one statement: 0 we may adjust your bil l under that

statement to reflect the total of any

additional or return premium for any or all of those policies;

o we'll apply any partial payment of the minimum premium due under your bil l proportionately to each of those policies unless the first named insured requests at the time o f such payment that we apply it differently; and

o for any o f those policies with a return premium, the f irst named insured may request that we refund such premium with a separate payment.

Our Right To Inspect And Audit

You must allow us to inspect your property and operations during normal business hours while your policy is in effect.

However, we aren't required to: e make any such inspection; or

guarantee that your property or operations are safe, or conform to any code, law, regulation, or standard;

except as required by any applicable state or municipal code, law, regulation, or standard for the certification o f boilers, pressure vessels, or elevators.

This rule also applies to any person or organization that makes insurance inspections, surveys, reports, or recommendations for us.

You also must allow us to examine, audit, and make copies o f your financial books and records that relate t o the coverage provided by your policy at any time up to three years after your policy ends.

Cancellation

How you can cancel. The first named insured can cancel all or part of your policy for any reason a t any time before your policy's expiration date with an advance notice of cancellation to us or one of our authorized representatives.

To cancel, the first named insured; must mail or deliver to us; or i f that isn't possible, must deliver to one of our authorized representatives;

your policy, or the part o f your policy to be canceled, and provide the date coverage is to end.

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How w e can cancel new policies in effect for 60 days or less. If your poiicy: e has been in effect for 60 days or less;

and e isn't a renewal or continuation of a policy

wi th us or any o f our affil iated insurance companies;

we can cancel all or part of your policy for any reason.

To cancel, we'll rriail or deliver a cancellation notice to the f irst named insured at least 10 days before the date coverage w i l l end. The notice wi l l show the reason for the cancellation.

How w e can cancel other policies. If your policy:

has been in effect for more than 60 days; or is a renewal or continuation o f a policy wi th us or any o f our affiliated insurance companies;

we can cancel all or part o f your policy only for the fol lowing reasons:

1. Nonpqment of premium.

2. Fraud. We can cancel i f we discover that, in obtaining your policy, you or your represeritative has committed fraud.

3. Increase in hazard we're insuring against. We can cancel if, after we have issued or renewed your policy, ari increase occurs in a hazard which was within your control. But only if this increase in hazard would result in an increase in your premium.

4. Loss of reinsurance. We can cancel i f we lose reinsurance that covers all or part of the risk we're insuring against under your policy.

5. Our being placed into consen/atorship, receivership, or supervision We can cancel i f we're placed into coriservatorship. receivership, or supervision. But only If the legal coriservator, receiver, or supervisor approves o f the cancellation.

To cancel, we'll mail or deliver a cancellation notice to the f irst named insured at least 10 days before the date coverage wi l l end. The notice wl l l show the reason for the caricellation.

hionrenewal. We can decide to not renew your policy for any reason. [

To not renew, we'll mail or deliver a nonrenewal notice to the f irst named insured at least 60 days before the date your policy ends. The notice wl l l show the reason for the nonrenewal.

However, i f we mail or deliver the nonrenewal notice to the first named insured less than 60 days before the date your policy ends, your policy wi l l remain in effect until the 61st day after the date the notice was mailed or delivered. We'll use your policy's premium t o compute, on a pro rata basis, the additional premium for that extension o f coverage.

Transferring your policy to one o f our affil iated insurance companies won't be considered nonrenewal.

Mailing or delivering the notice. We can mail or deliver the caricellatlon or nonrenewal notice to the flrst named Insured.

I f that notice is mailed, proof of mailing t o the flrst named insured's last mailing address known t o us wi l l be considered proof that: i e the f irst named insured received such

notice; and e you were notified of the cancellation or

nonrenewal. The notice wi l l show the date coverage wi l l erid and the reason for the cancellation or nonr enewal.

Notice to mortgageholders. I f your policy provides property protection and you have a rnortgageholder. shown in your policy, we'll also mail or deliver a cancellation or nonrenewai notice to your mortgageholder at the mortgageholder's last mailing address known to us:

as soon as possible i f you cancel; and e with the same nurnber o f days o f notice

we're required to give the first named insured i f we cancel or nonrenew.

Cancellation return premium. We'll compute, in accordance with our rules and rates which apply to your policy, cancellation return premium, i f any, on a pro rata basis.

As soon as possible, we'll refund any cancellation return premium, except as described in the Additional or return (

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premium section o f the Premiums section, e i s not a renewal or continuation o f a t o the f i rs t named insured. The cancellation pol icy issued b y us; w i l l be ef fect ive whether o r not we've made we can cancel all or part of your policy for or of fered such a refund. any reason.

Special rule for condominium associations. To i f your policy: cancel or not renew your pol icy i f you're a condominium association with: has been in effect fo r 90 days or more;

e condominium property that contains at least one residence; or condominium declarations that conform wi th the Texas Uni form Condominium Act;

we must mail o r deliver any cancellation or nonrenewal notice t o the f i rs t named insured, and t o each unit-owner t o whom w e

0 is a renewal or continuation o f a pol icy issued b y us;

w e can cancel ai l or part o f your pol icy only f o r the fo l lowing reasons:

7. Nonpayment of premium.. issued a cert i f icate o r memorandum of insurance, at least 30 days before the date 2. Determination by the Texas Department coverage w i l l end. of Insurance that continuing your policy

would violate Texas law. i f the cancellation or nonrenewal not ice is mailed, proof o f mail ing t o the f i rs t named 3. Submission of a fraudulent claim by the insured's and each unit-owner's last mail ing insured. address known t o us w i l l be considered proof that: 4. Increase in the hazard insured against e the f i rs t named insured and each unit- by your policy, which was within the

owner received such notice; and control of the insured, and which would * you were not i f ied o f the cancellation or have caused an increase in the premium

nonrenewal. or rate for your policy.

I f requested b y the f i r s t named insured, T o cancel, we'll mail or deliver a we'll provide a wr i t ten statement o f the cancellation notice t o the f i rs t named reason or reasons fo r the cancellation or insured at least: nonrenewal. 10 days before coverage w i l l end if w e

cancei for nonpayment-of premium; and Special rule for elected officials of * 30 days before coverage will end if we governmental units. I f you're an elected cancel for any other reason. of f ic ia l o f a governmental unit, w e won't cancel or not renew vour ool icv sole lv The notice w i l l show the date coverage w i l l

~~~ ~ ~ . - ~-~~ , - ~~. r. ..., because you're an elected official.

Special rule for governmental units. I f you're a governmental unit, we won't:

cancel an insuring agreement under your pol icy unless w e cancel al l of your policy; or add any exclusion or l imi tat ion o f coverage endorsement after your pol icy takes ef fect unless you f irst agree t o the endorsement.

Also, if you're a governmental unit and your pol icy provides only property protection that covers governmental property, the fo l lowing applies.

I f your policy: has been in e f fec t fo r less than 90 days; and

end.

We can decide t o not renew your po l icy for any reason. T o not renew your pol icy, we' l l mai l or deliver a nonrenewal notice t o the f i rs t named insured at least 30 days before the date your pol icy ends. The notice w i l l show the date coverage w i l l end. However, i f w e fai l to give proper notice, the f i rs t named insured may require us t o renew your policy.

I f the cancellation or nonrenewal notice is mailed, proof o f mailing t o the f i rs t named insured's last mail ing address known t o us will be considered proof that: - the f i rs t named insured received such

notice; and you were not i f ied o f the cancellation o r nonrenewal.

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I f requested b y the first named insured, we'll provide a written statement o f the reason or reasons for the cancellation or nonrenewal.

Special rule for property protection only policies. I f your policy provides only property protection, we can cancel or not renew your policy for any reason. But this section doesn't apply i f you're a governmental unit and that property protection covers governmental property. Instead, the Special rule for governmental units section applies.

To cancel, we'll mail or deliver a cancellation notice to the f irst named insured at least: r 14 days before coverage wi l l end i f we

cancel for nonpayment o f premiurn; or r 30 days before coverage w i l l end if we

cancel for any other reason. The notice wi l l show the date coverage wi l l end.

To not renew your policy, we'll rnail or deliver a nonrenewal notice to the f irst named insured at least 30 days before the date your policy ends. The notice will show the date coverage wi l l end.

If the cancellation or nonrenewal notice is mailed, proof o f mailirig to the first named insured's last mailing address known t o us wi l l be considered proof that: o the f irst named insured received such

notice; and e you were notif ied of the cancellation or

nonrenewal.

I f requested by the first named insured, we'll provide a written statenlent of the reason or reasons for the cancellation or nonrenewal.

Fraud And Material Misrepresentation

This Fraud And Material Misrepresentation section applies only if your policy provides property or other first-party protection.

I f you commit fraud or material misrepresentation. If, before or after a loss, you: 0 hide any material information from us; 0 mislead, lie to, or defraud us; or e attempt any such actions:

about any material matter concernirig the property or other first-party protection provided by your policy, we can consider that protection to be void for you and all other persons arid organizations protected under your policy.

We'll consider such fraud or material misrepresentation committed by any o f the following to also be committed b y you:

Your spouse i f you're an individual. Any of your partners or co-venturers, or their spouses, i f you're a partnership or joint venture.

9 Any o f your members or managers i f you're a limited liability company.

o Any of your trustees i f you're a trust. Any of your shareholders i f you're a professional association.

9 Any of your appointed or elected off icials i f you're a public entity or tribal governrnent.

e Any of your directors or executive officers i f you're a corporation or an other organization.

I f other persons or organizations commit fraud or material misrepresentation. If, before or after a loss, anv ~ e r s o n or oraanization 1 protected ~ n d e r ' ~ o u r policy, oTher than you and the persons and orgariizations described in the last paragraph o f the i f you commit fraud or material misrepresentation section: o hides any material information from us; e misleads, lies to, or defrauds us; or e attempts any such actions; about any material matter concerning the property or other first-party protection provided by your policy, we can consider that protection t o be void for only that person or organization.

We'll consider such fraud or material niisrepresentation committed by any of the following t o also be committed by any such organization protected urider your policy: a Any of i ts partners or co-venturers i f that

organization is a partnership or joint venture.

r Any of i ts members or managers i f that organization is a limited liability company.

r Any of i ts trustees i f that organization is a trust. Any of i ts shareholders i f that organization is a professional association. (

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Any o f i t s appointed or elected o f f ic ia ls if that organization is a public ent i ty or tribal government. Any o f i t s directors or executive of f icers i f that organization is a corporation or an other organization.

Unintenlional errors or omissions. We won't consider errors or omissions that are unintended by: e you; and e all other persons and organizations

protected under your pol icy that are described in the last paragraph o f the I f you commit fraud or material misrepresentation section and commit such errors or omissions;

t o be fraud or material misrepresentation as described in that section.

Also, w e won't consider errors or omissions that are unintended by: e all other persons and organizations

protected under your policy; and

all persons and organizations described in the last paragraph o f the If other persons or organizations commit fraud or material misrepresentation section;

that commit such errors o r omissions t o be fraud o r material misrepresentation as described in that section.

Assignments And Transfers

Neither you nor any other person or organization protected under your pol icy can assign, transfer, or otherwise turn over, your interest in i t without consent f rom us in a wr i t ten fo rm that's made part o f your policy.

Lawsuits Against Us

No person or organization can sue us t o recover under your po l i cy unless ai l o f your pol icy's terms have been fu l ly complied with.

I f your policy provides property or other first-

P arty protection. A n y suit t o recover on a oss under any property or other first-party

protection provided b y your po l icy must begin wi th in t w o years after the date on which the direct physical loss or damage occurred t o the property that's required t o sustain such loss or damage f o r the loss t o be covered under that protection.

I f your policy provides liability protection. No person or organization can sue us t o recover on a loss under any l iabi l i ty protection provided b y your pol icy until the amount o f the l iabi l i ty o f a person or organization protected f o r that loss under your pol icy has been f inal ly decided either b y a judgment o r b y a wr i t ten agreement signed by: e us; e the person or organization protected under

your policy; and e the person or organization making a claim

or bringing a suit f o r the loss.

Once l iabi l i ty has been s o determined, that person or organization making the claim or bringing the suit may be able t o recover under your policy, up t o the l imi t o f coverage that applies. But such person or organization can't sue us direct ly or jo in us in a suit against that person o r organization protected under your po l icy unti l l iabi l i ty has been so determined.

However. i f you're an individual named Recovering Damages From A Third Party insured and you die:

e your legal representatives w i l l have your 'OU Or persons Or Organizations rights and duties under your policy, but protected under your po l icy may also be

only while acting wi th in the scope o f able t o recover f r o m others al l or part of their duties as your legal representatives: any loss for which w e make a payment.

. and

e until such legal representatives are Any such r ight o f recovery, and the proceeds o f any sett lement or judgment that

appointed. any Person or organization that may result f rom the exercise of that right, properly has temporary custody o f your belongs t o us. property w i l l have your rights and duties concerning that property under your policy. For that reason, you and all other persons

and organizations that: e are protected under your policy; and

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e are, or may be, involved in a loss for Bankruptcy Ur Insolvency Of Any Person Or which we make, or may make, a payment; Organization Protected Under Liability Protection (

must do all that's possible after the loss to: If your policy provides liability protection,

0 preserve for us any such right o f recovery the bankruptcy or insolvericy of: or any such proceeds; arid

0 cooperate with us in any attempt to any person or organization protected under

exercise any such right of recovery. that liability protection; or 0 any estate of that person;

However, before any loss, you or any other person or organization protected under your policy may waive its right o f recovery for the loss without our consent.

I f we exercise our right of recovery under your policy and we recover more than we've paid, the excess amount wi l l belong to the person or organization protected under your policy that had the loss. But we'll f irst deduct our recovery expenses from any such amourit recovered by us.

. won't relieve us of our obligations under such liability protection.

However, i f such liability protection coritains an exclusion or other coverage limitation for loss that results from such bankruptcy or insolvency, this rule doesn't change or eliminate that exclusion or other coverage limitation.

How Statutory Or Regulatory Law Affects Your Policy

Appraisal Of A Covered Loss Amount In Dispute part of your policy that conflicts with Under Property Or Other First-Party Protection any requirement of statutory or regulatory

law which applies is automatically changed If your policy provides property or other t o conform to that law. first-oar-tv orotectiori and vou arid we can't agree on'the aniount o f a 'loss covered under that protection, the following procedure wi l l be used to settle the dispute: What To 00 I f You Have A Loss

( 1. Either you or we wi l l make a written

demand for an appraisal of the covered loss amount in dispute.

2. Within 30 days of the demand, you and we wi l l each select a conipetent and impartial appraiser and not i fy the other o f the selection.

3. The appraisers wi l l select a competent and impartial umpire. I f they can't agree on ari umpire, either of them may request that the selection be made by a judge o f a court having jurisdiction.

4. The appraisers wi l l each state separately their appraisal o f the covered loss arnount in dispute. I f they can't agree on that amount, they'll submit their appraisals to the umpire. The umpire's agreement to one of those appraisals wi l l be binding.

This What To Do I f You Have A Loss section applies orily i f the address shown for you in the Introduction o f your policy is in Texas and: e your policy provides property or other

first-party protection and there's a loss that may be covered under that protection; or

o your policy provides liability protection and there's an accident, act, error, event, incident, offense, or omission that may result in damages or other amounts which may be covered under that protection.

I f so, this What To Do I f You Have A Loss section applies in place o f any other What To Do I f You Have A Loss form or section that is part o f your policy.

Coverage under your policy may be affected b y arty failure t o ful f i l l any of the duties described in this What To Do I f You Have A

5. You'll pay the fees of your appraiser. Loss section. We'll pay the fees of our appraiser. Other costs o f the appraisal, including However. neither this What l o Do I f You the fees o f the umpire, wi l l be shared Have A Loss section, nor any of these equally by you and us. duties, change or eliminate any coverage

condition or requirernent, or exclusion or (

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other coverage limitation, anywhere in the At our request, make an inventory of rest of your policy, such as: damaged or lost property and mail.

a specific coverage trigger, reporting, deliver, or otherwise give that inventory

notice, or knowledge condition or to US.

requirement; or an exclusion or other coverage limitation that's based, all or in part, on knowledge.

I f Your Policy Provides Property Or Other First- Party Protection

If your policy provides property or other first-party protection and there's a loss that may be covered under that protection, you must do all of the following in connection with that loss:

1. As soon as possible, tell us or one of our authorized representatives what happened. Include all of the following information: e The time, place, and specific nature of

the loss. e The cause, or likely cause, of the loss. m A description of the property involved.

The name and address of each person known to be a witness.

Our United States o f America (USA) Claim Call Center is available from anywhere in the USA at any time at the following toll-free telephone number to tell us this information:

1 -800-STPAUL-1 (1-800-787-2851)

Also, our Internet web site is available from anywhere at any time at the following address to tell us this information:

www.stpaul.com

2. Promptly not i fy the police i f a law may have been broken.

3. Do what is reasonable and necessary to protect covered property from further damage or loss. Keep a record of any expenses you incur in taking such action for our possible consideration in any settlement o f the loss.

4. Separate damaged property from undamaged property, i f feasible, to enable examination by us.

5. Cooperate with us in the investigation, or any settlement, of the loss.

Allow us, whenever we reasonably require, to: . inspect property involved in or proving

the loss; o examine, and make copies of, your

financial books and records relating t o the loss; and

0 take samples of property, whether damaged or undamaged, for analysis or testing.

6. Allow us to examine you, or any other person or organization protected under your policy, while:

under oath; and not in the presence of any other person protected under your policy.

We may do this, whenever we reasonably require, about any matter relating to: e your property or other first-party

protection; 0 the loss; or

your financial books and records relating to the loss.

Al l persons or organizations protected under your policy that are examined in this manner must sign a copy of their responses.

7. Within 60 days after our request, you must mail, deliver, or otherwise give t o US a signed, sworn proof of loss, using a form supplied by us that provides the information we need to consider whether the loss is covered by your policy.

Within 30 days after we reach agreement with you on what we owe for a covered loss, we'll pay that amount.

If Your Policy Provides Liability Protection

If your policy provides liabiiity protection and there's an accident, act, error, event, incident, offense, or omission that may result in damages or other amounts which

- -

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may be covered under that protection, you or any other person or organizatiori protected under your policy must do all of the fol lowing in corinection with that accident, act, error, event, incident, offense, or omission:

1. As soon as possible after having knowledge o f the accident, act, error, event, incident, offense, or omission, tell us or one o f our authorized represeritatives what happened. Do this even i f no demand against you or any other person or organization protected under your policy has been made. Include all of the following information that's reasonably available:

The time, place, and specific nature of the accident, act, error, event, incident, offense, or omission.

0 The type o f demand that has been or may be made against you or any other person or organization protected under your policy.

o The name and address of each person or organization that may make a claim or bring a suit.

0 The name arid address o f each person who may be a witness.

o The name and address of each person or organization that may be involved and is protected under your policy.

Our United States o f America (USA) Claim Call Center is available from anywhere in the USA at any time at the fol lowing toll-free telephone number to tel l us this information:

Also, our Internet web site is available from anywhere at any time at the fol lowing address to tell us this information:

www.stpaul.com

However, neither we nor any o f our authorized representatives need to be told o f an accident, act, error, event, incident, offense, or omission that first involves your workers coniperisatiori insurance unless the liability protection provided by your policy is likely to be involved.

2. Promptly not i fy the police i f your policy provides auto liability protection and a

covered auto under that protection is stolen.

(

3. As soon as possible after receiving them, mail, deliver, or otherwise give to us a copy of: 0 all written demands made; and r all legal documents relating t o any suit

brought; against you or any other person or organization protected under your policy.

4. Cooperate with and, when requested, assist us in: o securing and giving evidence; a attending hearings and trials; e obtaining the attendance o f witnesses;

and 0 taking other reasonable steps to help

us investigate or settle, or defend a person or organization protected under your policy against, a claim or suit.

5. Not assume any financial obligation or pay out any money. other than for f irst aid given t o others at the time o f an accident, without our consent.

When w e consider you to have knowledge of ( an accident, act, error, event, incident, offense. or omission. I f vou're an individual, we'll consider you to. have knowledge o f an accident, act, error, event, incident, offense, or omission only i f you have knowledge of it or any person has knowledge of it while he or she is your: 0 SDouse; o employee and is or acts as your insurance

or risk manager or holds a position in your insurance, risk management, or legal department; or

e employee, or authorized person, with a duty given b y you to tell us, one o f our authorized representatives, or any o f the persons described above, about that accident, act, error, event, incident, offense, or omissiori.

I f you're an organization, we'll consider you to have knowledge o f an accident, act, error, event, incident. offense, or omission only i f any person tias knowledge o f i t while he or she is your: o partner or co-venturer, or his or tier

spouse, i f you're a partnership or joint venture;

(

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a member or manager if you're a limited liability company; trustee i f you're a trust; shareholder i f you're a professional association;

e appointed or elected off icial i f you're a public entity or tribal government;

e director or executive officer i f you're a corporation or an other organization;

s employee and is or acts as your insurance or risk manager or holds a position in your insurance, risk management, or legal department; or

e employee, or authorized person, with a duty given by you to tell us, one o f our authorized representatives, or any o f the persons described above, about that accident, act, error, event, incident, offense, or omission.

However, if: you're a partnership, joint venture, limited liability company. trust. or professional association; and

b any of your partners, co-venturers, members, trustees, or shareholders is an organization;

we'll also consider you to have knowledge of an accident, act, error, event, incident, offense. or omission i f anv Derson has knowledge of i t while he or ahe is that organization's:

partner or co-venturer i f it's a partnership or joint venture;

a member or manager i f it's a limited liability company; trustee i f it's a trust;

a shareholder i f it's a professional association; appointed or elected official i f it's a public entity or tribal government; or

a director or executive officer i f it's a corporation or an other organization.

When w e consider other persons or organizations to have knowledge of an accident, act, error, event, incident, offense, or omission. We'll consider any person or organization protected under your policy, other than you, to have knowledge of an accident, act, error, event, incident, offense, or omission if you or any of the persons described in the When we consider you to have knowledge of an accident. act, error. event. incident,-offense, or omission sectidn has knowledge o f it.

Also. if any such other person protected under your policy is a sole proprietor, we'll consider that sole proprietor to also have knowledge of an accident, act. error, event, incident, offense, or omission i f any person has knowledge of i t while he or she is that sole proprietor's:

employee and is or acts as its insurance or risk manager or holds a position in its insurance, risk management, or legal department; or

e employee, or authorized person, with a duty given by that sole proprietorship to tell that sole proprietor, any of the employees described above, that sole proprietorship's insurer, or one of that insurer's authorized representatives, about that accident. act, error, event, incident. offense, or omission.

In addition, we'll consider any such organization protected under your policy to also have knowledge of an accident, act, error, event, incident, offense, or omission i f any person has knowledge o f i t while he or she is that organization's:

partner or co-venturer If it's a partnership or joint venture;

e member or manager i f it's a limited liability company;

e trustee i f it's a trust; * shareholder i f it's a professional

association; e appointed or elected off icial i f it's a

public entity or tribal government; director or executive officer i f it's a corporation or an other organization; employee and is or acts as its insurance or risk manager or holds a position in its insurance, risk management, or legal department; or

e employee, or authorized person, with a duty given by that organization to tell i ts insurer, one of i ts insurer's authorized representatives, or any of the persons described above. about that accident. act. error, event, incident. offense, or omission.

Finally, if: e any organization protected under your

policy, other than you i f you're an organization, Is a partnership, joint venture, limited liability company, trust, or professional association; and

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e any o f i ts partners, co-venturers, members, trustees, or shareholders is an organization;

we'll also consider such organization that's protected under your policy t o have knowledge o f an accident, act, error, event, incident, offense, or omission i f any person has knowledge of i t while he or she is such partner, co-venturer. member, trustee, or shareholder organization's:

partner or joint venture i f it's a partnership or joint venture; member or manager i f it's a liniited liabilitv comnanv. . . - - . . . . , - - . . . - . . , r

e trustee i f it's a trust; a shareholder i f it's a professional

0 specifically described in the part of this section which rnakes that change.

(

As a result, i f the address shown for you in the Introduction o f your policy is outside Texas, each change that's made by this Changes That Apply If Your Policy Provides Property Or Other First-Party Protection section to comply with Texas statutory or regulatory law applies only if, and to the extent: a your policy provides coverage for a loss

of or to, or that results from, property in Texas; and

e such regulatory or statutory law applies to such coverage.

association; 0 appointed or elected official if it's a

Claim Handling And Payment Deadlines public entity or tribal government; or Our initial response. We agree t o do the

e director or executive officer i f it's a following within 15 days after receipt of a corporation or an other organization. notice of property or other f irst party

insurance claim under this oolicv: Effect of failure to comply with the notice requirement in connection with a general liability claim or suit The failure to provide information or give us copies of any document in connection with a general liability claim or suit by anyone required to do so won't affect our obligation under any of the fol lowing general liability protection insuring agreements, unless the failure to comply with the notice requirement prejudices our response to the claim or suit: a Commercial General Liability Protection e Products and Completed Work Liability

Protection Owners Or Contractors Liability Protection

Changes That Apply I f Your Policy Provides Property Or Other First-Party Protection

If your policy provides property or other first-party protection. this Changes That Apply If Your Policy Provides Property Or Other First-Party Protection section changes your policy to comply with, or otherwise respond to, Texas law.

a Acknowledge receipt o f the clairn. e Begin any investigation o f the claim. e Request all items, statements and forrns

that we reasonably believe is needed frorn the claimant t o settle the claim. However, we still have the right to make , additional requests for information during the investigation o f the clairn if such requests are necessary.

Notice of property or other first party insurance claim means any written notice ttiat: e is rnailed or delivered to us; and e reasonably informs us o f a property or

other first party insurance claim and the facts relating to it.

Property or other first party insurance claim means a claim that: 0 is for loss, including loss or darnage t o

covered property, which is or rnay be covered by property or other first party insurance provided by this policy;

0 must be made against us by an insured under this policy; and

e must be paid by us directly to ttiat Therefore, each change rnade by this insured. Changes That Apply I f Your Policy Provides Property Or Other First-Party Protection section applies only to the extent: Covered prope* includes property covered

under iriland marine insurance only i f such e required by Texas statutory or regulatory insurance is governed by Article 5.53 of the

law; or Texas Insurance Code.

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Notice of acceptance or rejection. We w i l l send or deliver a wr i t ten acceptance or rejection o f the claim notice t o a claimant wi th in 15 business days after we receive a l l items, statements and forms required or requested by us t o complete the proof of loss. However, i f there's a reasonable basis t o believe that the claim involves arson, we can take longer t o send or deliver such notice once we've received all items, statements and forms required or requested b y us. But w e won't take longer than 30 days.

I f we reject a claim, we w i l l include the reason for the reject ion i n the notice.

Penalty for our Failure to meet the claim payment deadline. W e agree t o pay damages in addition t o the amount of a claim if w e delay payment o f the claim: e beyond the period o f t ime specif ied in

other applicable Texas statutes; o r e more than 60 days; after receipt o f all items, statements and forms that we reasonably requested and required. However, w e are no t responsible for such damages if it is determined b y arbitration or l i t igation that such claim is inval id and doesn't have t o be paid b y us.

Damages means: interest equal t o 18 percent o f the c la im Business day means any day other than a amount on an annual basis; and

Saturday or Sunday, or a holiday recognized b y the state o f Texas. * reasonable attorney fees as may be

determined b y a court or arbitrator.

Request for additional time. I n the event w e are unable t o accept o r reject a claim wi th in 15 business days, or 30 days if we suspect arson, w e w i l l send or deliver t o the claimant a wr i t ten notice that gives the reason(s) why we need additional t ime t o settle the claim. I-lowever, we won't take more than 45 days after the additional t ime needed notice t o send or deliver a wr i t ten acceptance or reject ion o f the claim notice t o the claimant.

Payment of claim deadline. W e w i l l send or deliver payment f o r a claim t o the claimant wi th in f i ve business days after the date that:

Other lnsurance

The fo l lowing replaces the text o f the Other lnsurance section that's part o f any property protection insuring agreement included in your policy:

When this agreement and other col lect ible property insurance both apply t o a covered loss, we'll pay only our share o f that covered loss. Our share will be the same proport ion o f the covered loss that our l im i t o f coverage bears t o the tota l o f al l available l im i ts o f coverage.

we sent or delivered a wr i t ten notice t o Special Rule - Article 13 - Fire Policy As the claimant that we would be making such payment; or

Liquidated Demand

the claimant has done what we specif ical ly required or requested in return for such payment.

Weather-related catastrophe claim-handling deadlines. In the event o f a weather-related catastrophe or major natural disaster, as defined b y the Texas Department o f Insurance, the handling and payment o f claim deadlines fo r property insurance claims are extended for an additional 15 days.

Catastrophe or major national disaster means a weather related event which: e i s declared a disaster under the Texas

Disaster Ac t o f 1975; o r is determined t o be a catastrophe b y the Texas Department o f Insurance.,

A f i re insurance policy, in case o f a to ta l loss b y f i re o f property insured, shall be held and considered t o be a liquidated demand against the company f o r the fu l l amount o f such pol icy. The provisions o f this article shall no t apply t o personal property.

Changes That Apply If Your Policy Provides Liability Protection

If your po l i cy provides l iabi l i ty protection, this Changes That App ly I f Your Pol icy Provides Liabi l i ty Protection section changes your po l icy t o comply with, or otherwise respond to, Texas law.

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"St fsul

Therefore, each change made by this Changes That Apply I f Your Policy Provides Liability Protection section applies only to the extent: 0 required by Texas statutory or regulatory

law; or o specifically described in the part of this

section which makes that change.

As a result, i f the address shown for you in the Introduction of your policy is outside Texas, each change that's made by this Changes That Apply I f Your Policy Provides Liability Protection section to c o m ~ l y with Texas statutory or regulatory law applies only if, and to the extent: 0 your policy provides coverage for a loss

that results from your operations in, or which affect, Texas; and

* such regulatory or statutory law applies to such coverage.

Claim Settlement Notice Deadlines

We'll send or deliver a written notice of a settlement offer to the first named insured within 10 days after an offer to settle a liability claim against a protected person is made. In addition, i f we agree to such a settlement, we wi l l send or deliver a written notice of the settlement to the first named insured no later than 30 days after the settlement date.

These notices apply t o any liability protection insuring agreement that:

doesn't require the protected person's consent to settle a clairn;

e isn't a fidelity, surety or guaranty bond; and is part o f a policy delivered, issued for delivery, or renewed, in Texas.

Intellectual Property Exclusion

If your policy includes any Technology Commercial General Liability Protection insuring agreement, or Technology Umbrella Excess Liability Protection insuring agreement, that contains an Intellectual property exclusion, such exclusion is replaced with the following. This revision doesn't change coverage.

lntellectual property. We won't cover injury or damage that results from any actual or alleged infringemerit or violation o f any of the following rights or laws:

Copyright. b Patent.

Trade dress. 0 Trade name. e Trade secret^

Trademark. e Other intellectual property rights or laws.

Nor wi l l we cover any other personal injury or advertising injury that's alleged in any claim or suit which also alleges any such infringement or violation.

But we won't apply this exclusion t o bodily injury or property damage that results from your products or your completed work.

Nor wi l l we apply this exclusion to advertising injury that results from the unauthorized use o f any: 0 copyrighted advertising material; 0 trademarked slogan; or

trademarked title; of others in your advertising.

We explain the terms your products and your conipleted work i r i the Products and completed work total limit section. 1

Commercial General Liability Protection - Certain Changes

I f your policy includes Conimercial General Liability Protection, the following applies.

1. Any exception paragraph in the Aircraft exclusion that broadens coverage for the "use o f an aircraft chartered by a protected person" is deleted. This deletion excludes coverage.

2. I f there's an "asbestos ceiling tile" example paragraph or "apartment with lead paint'' example paragraph that fol lows the definition o f protected person's premises in the Pollution injury or damage exclusion, those example paragraphs are deleted. Such deletions do not change coverage.

3. I f there's any statement that punitive or exemplary damages are or aren't covered, such statement is deleted from wherever it's part o f that insuring agreement.

(

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Public Entity General Liability Protection - Asbestos Exclusion

I f your policy includes any Public Entity General Liability Protection insuring agreement that contains an Asbestos exclusion, such exclusion is deleted.

However, your policy may still contain an Asbestos exclusion for that insuring agreement, in accordance with the regulatory requirements of the Texas lnsurance Department, i f the exclusion is in an endorsement that's made part of your policy. Any such endorsement is intended to exclude coverage with an Asbestos excltlsion that applies in place of any Asbestos exclusion deleted from your policy by the f irst paragraph of this section. Therefore, your policy should be read carefully to determine whether such an endorsement is part of your policy.

Umbrella Excess Liability Protection - Certain Changes

I f your policy includes Umbrella Excess Liability Protection, the following applies.

1. Whenever the term Deductible appears in the insuring agreement or Coverage Summary, i t is replaced with Self-Insured Retention.

2. If there's an "asbestos ceiling tile" example paragraph or "apartment with lead paint" example paragraph that fol lows the definition o f protected person's premises in the Pollution injury or damage exclusion, those example paragraphs are deleted. Such deletions do not change coverage.

3. I f there's any statement that punitive or exemplary damages are or aren't covered, such statement is deleted from wherever it's part of that insuring agreement.

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1st ChoiceSM

LAWYERS PROFESSIONAL LIABILITY PROTECTION - CLAIMS-MADE

This insuring agreement provides professional Important note. This is a claims-made and liability protection for the performance of, or reported insuring agreement that iricludes failure to perform, legal services by or on defense experises within the limits of behalf of any protected person. There are, coverage. To be covered, a claim, suit, or of course, limitatioris and exclusions, and disciplinary proceeding must be first made or terms with defined meanings. which apply to brought against a protected person and that protection. Certain terms that have or reported to us in the same policy year, iriclude defined meanings shown in this including, under certain circurnstarices, during agreemerit are listed in the List Of Terrns the limited reporting period, the non- With Defined Meanings Shown In This practicing attorney reporting period, or the Agreemerit section, which also shows where extended reporting period, i f such reporting their defined meariings are located. This period applies. This agreement should be agreement should be read carefully to read carefully, especially the What This determine the extent of coverage provided t o Agreernent Covers. When This Agreement you and other protected persons. Covers, Limits Of Coverage, and Deductible

sections.

Table of Contents Page

This Table of Contents lists: e the major sections o f this agreement;

and e the exclusions in the Exclusions - What

This Agreement Won't Cover section. Each listed section and exclusion begins on the page shown for it.

However, one or more endorsements or other forms made part o f your policy may, without changing this Table o f Contents: e delete, or change the name of, any of

the sections of, or exclusions in, this agreement; or

e add another section or exclusion to this agreement.

What This Agreement Covers 2 Lawyers professional liability. 2 Publishing and nonprofit services

liability. 3 Disciplinary proceeding expenses. 4 Right and duty to defend a protected

person. 4 Right to appeal a judgment against a

protected person. 5 Transfer of control of deferise of

outstanding claims or suits. 5 Additional payments. 6

When This Agreement Covers 6 When a claim, suit, or disciplinary

proceeding must be first made or brought against a protected person and reported t o us. 6

When we consider a clairn. suit. or disciplinary proceeding to be first

made or brought against a protected person.

When we consider a claim, suit, or disciplinary proceeding t o be first reported to us.

What we require in a written notice of a specific wrongful act or potential claim or suit.

When the limited reporting period wi l l apply"

How the limited reporting period applies.

When and how a non-practicing attornev reoortinq oeriod can be , . - . added.

How the non-oracticinq attornev reporting peiiod applhs.

When and how an extended reporting period can be added.

How the extended reporting period applies.

What we'll charge for the extended reporting period.

Where This Agreement Covers

Who Is Protected Under This Agreement Individual.

Limited liability company. Corporation, professional association,

o r other organization. Employees, o f counsel attorneys, and

independent contractors. Lawyers before they became your

partners, shareholders, or employees. Forrner partners, directors, executive

officers, shareholders, employees, independent contractors, or of counsel attorneys who have left your organization.

Legal representatives o f certain protected persons.

- -

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Predecessor firms. 11

Limits Of Coverage 11 Each wrongful act limit. 11 Total limit. 11 Publishing and nonprofit services

liability limit. 12 Disciplinary proceeding expenses limit. 12 How the limits of coverage apply to

the limited reporting period and the extended reporting period. 12

Deductibles 12 Each wrongful act deductible. 13 Total deductible. 13

Exclusions - What This Agreement Won't Cover 13

Criminal, dishonest. or fraudulent wrongful acts or knowing violation of rights or laws. 13

Known wrongful acts. 13 Nonprofit services liability exclusions. 14

Other lnsurance Excess insurance. Methods of sharing.

List Of Terms With Defined Meanings Shown In This Agreement 16

What This Agreement Covers

Lawyers professional liability. We'll pay amounts any protected person is legally required to pay as damages for covered loss that: a results from the performance of, or failure

t o perform, legal services by or on behalf o f any protected person; and

e is caused by a wrongful act committed on or after any retroactive date that applies and before the ending date o f this agreement.

But only i f such covered loss results in a claim or suit first:

made or brought against a protected person in a policy year and reported to us in the same policy year; made or brought against a protected person in a policy year and reported to us during the limited reporting period that starts on the ending date o f that policy year;

s made or brought against a protected person in the last policy year and reported to us during the non-practicing attorney

reporting period or the extended reporting period, i f such reporting period applies; or :

\ e made or brought against a protected

person during the non-practicing attorney reporting period or the extended reporting period and reported t o us during such reporting period, i f such reporting period applies.

We'll consider each wrongful act in a series of related wrongful acts to be committed on the date the first wrongful act in that series is committed.

We'll apply this agreement as excess insurance over any other insurance available to the protected person in the capacity as a City or County Attorney. We explain how we'll do so in the Other lnsurance section.

Protected person means any person or organization that qualifies as a protected person under the Who Is Protected Under This Agreement section.

Damages means: o compensatory damages imposed by law;

and e punitive or exemplary damages imposed

by law i f such damages are insurable ( under the law that applies.

But we won't consider damages to include any: 0 civil or criminal fines, forfeitures,

penalties, or sanctions; or e legal fees charged or incurred by any

protected person.

Legal services means those professional services performed, or failed t o be performed, for others as duties in any of the following capacities, regardless of whether or not a fee is charged for such services: a Lawyer, other than a City or County

Attorney. * Arbitrator.

City or County Attorney. Lobbyist. Mediator.

* Notary public. o Administrator, conservator. receiver.

executor, guardian, trustee, or any similar fiduciary capacity directly connected with the protected person's practice o f law. (

Wrongful act means any:

Page 2 of 16 cSt.Paul Fire and Marine lnsurance Co. 2003 Ai l Rights Reserved

0 error, omission. or. negligent act; 01

e personal injury offense.

Retroactive date means the earliest date a wrongful act may be cornrnitted and be covered by this agreement. The retroactive date is shown in the Coverage Summary. However, i f no retroactive date is shown in the Coverage Summary, then no retroactive date applies to this agreement.

Claim means a demand that seeks damages.

Suit means a civil proceeding that seeks damages. I t includes: 0 an arbitration proceeding for damages to

which the protected persorl must submit or subrnits with our consent; and

e any other alternative dispute resolution proceeding for damages to which the protected person submits with our consent.

City or County Attorney rneans a lawyer who is employed by a public entity to: 8 represent it in civi l matters; or

serve as its prosecuting attorney.

Personal injury offense means any of the following offenses: 0 False arrest, detention or imprisonment.

Malicious prosecution or abuse o f process. o Wrorlgful entry into, or wrongful eviction

from. a room. dwellins. or premises that a persori occupies, i f such entry or eviction is committed by or on behalf of the landlord, lessor, or owner o f that room, dwelling. or premises.

o Invasion o f the right of private occupancy of a roorn. dwelling, or premises that a person occupies, i f such invasion is committed by or on behalf of the landlord, lessor, or the owner of that room, dwelling, or premises.

Policy year means the policy period shown Libel or slander. in the Introduction. or the period of time e Making known to any person or that this agreement is in effect, whichever organization any material that disparages period is shorter. But when that period is the business, premises, products, services, longer than one year, policy year means work. or comoleted work of others. each of the following periods of time that Making to any or this agreement is in effect, starting with the beginning date of t h s agreement: organization any material that violates a

person's right of privacy. Each consecutive one-year period.

e Any period that rernains after the last consecutive one-year period.

However, i f the original policy period shown in the lntroduction is extended for a period of iess than one year, we'll consider each such extended period to be part o f the preceding policy year, regardless o f the number of extensions provided.

Last policy year means: a the final policy year that this agreement is

in effect i f this aareernent is in effect for more than one poncy year; or

e the only policy year that this agreement is in effect i f this agreement is not in effect for rnore than one policy year.

Related wrongful acts means two or more wrongful acts that have as a common connection, tie, or link any fact, circurnstarice, situation, event, transaction, cause, or series of related facts, circumstances, situations, events, transactions, or causes.

Lobbyist means a lawyer who is registered in accordance with any federal or state statute governing the conduct of lobbyists.

Publishing and nonprofit services liability. We'll pay amounts any protected person is legally required to pay as damages for covered loss that: e results from publishing, or the

~erformance of, or failure to perform, nonprofit services, by or on behalf of any protected person; and

e is caused by a wrongful act committed on or after any retroactive date that applies and before the ending date o f this agreement.

But only i f such covered loss results in a claini or suit first: e rnade or brought against a protected

person in a policy year and reported to us in the same policy year;

e made or brought against a protected person in a policy year and reported t o us during the limited reporting period that starts on the ending date o f that policy year;

m made or brought against a protected person in the last policy year and reported to us during the non-practicing attorney

43997 Rev. 12-03 Printed in U.S.A. Insuring Agreement oSt.Paul Fire arid Marine Insurance Co. 2003 Al l Rights Reserved Page 3 o f 16

reporting period or the extended reporting brought against a protected person in the oeriod. i f such reportins oeriod ap~l ies; or last oolicv-vear and reoorted to us durins i - . . .

the ion-pkacticing a t tokey reporting - \

0 made or brought against a protected person during the non-practicing attorney period or the extended reporting period, i f

reaortina oeriod or the extended re~o r t i ns such reporting period applies; or - period and reported to us during such brought against a protected person during reportins oeriod, i f such reportins period the non-~racticins attornev re~o r t i ns - . - . applies. period & the ext-ended reporting period

and reported to us during such reporting We'll apply this agreement as excess period, i f such reporting period applies. insurance over any other insurance or any indemnity the attorneys' bar association or B~~ we have a duty to defend any nonprofit entity provides or makes available protected against any disciplinary to such protected person. We explain how we'll do so in the Other Insurance section.

Publishing means creating and producing any material directly related to the practice o f law in any format for distribution or sale t o others, including preparing materials, or presenting seminars, for Continuing Legal Education credit.

Nonprofit services means services performed, or failed to be performed, by any protected person while: m serving in the capacity of a director,

officer, or committee member of an attorneys' bar association; or

o serving in the capacity of a director. officer, or trustee o f a nonprofit entity.

Nonprofit entity means any nonprofit corporation, community chest, fund, or foundation that is exempt from federal income tax as an organization described in Section 501(c)(3) o f the Internal Revenue Code of 1986, and its amendments.

Disciplinary proceeding expenses. We'll pay disciplinary proceeding expenses any protected person incurs for a disciplinary proceeding that:

results from the performance of, or failure to perform, legal services by or on behalf of any protected person; and . is caused by a wrongful act committed on or after any retroactive date that applies and before the ending date of this agreement.

But only i f such disciplinary proceeding is first: 0 brought against a protected person in a

policy year and reported to us in the same policy year; . brought against a protected person in a policy year and reported to us during the limited reporting period that starts on the ending date of that policy year;

Also, our duty to pay such disciplinary proceeding expenses ends when we have used up the Total l imit shown in the Coverage Summary with the payment of:

judgments; e settlements; or m defense expenses

Disciplinary proceeding expenses means the following fees, costs, and expenses that result from the investigation, defense, or appeal o f any disciplinary proceeding: 0 Fees, costs, and expenses charged for

such investigation, defense, or appeal by , any attorney that we approve.

e Our expenses. other than the expenses of our employees.

But, we won't consider disciplinary proceeding expenses to include any: o fines, penalties, or sanctions assessed

against any protected person as a result of any disciplinary proceeding; or

o legal fees charged by any protected person.

Disciplinary proceeding includes any formal scheduled hearing by any:

bar association; or o state regulatory or disciplinary off icial or

agency; to investigate any charges alleging professional misconduct in the performance of, or failure to perform, legal services.

Right and duty to defend a protected person. We'll have the right and duty to defend any protected person against a claim or suit for loss covered by this agreement.

We'll do so even i f any o f the allegations [ of such claim or suit are groundless, false, or fraudulent. But we won't have a duty to perform any other act or service.

Page 4 of 16 @St.Paul Fire and Marine Insurance Co. 2003 Al l Rights Reserved

When we defend a protected person against a claim or suit, we'll pay defense expenses incurred by, or for, the protected person for the claim or suit. For each claim or suit we defend, we'll pay such defense expenses before we pay any damages. Payment of defense expenses wi l l reduce the available limits of coverage. We explain how in the Limits Of Coverage section.

We'll have the right to investigate ariy wrongful act, clairn, or suit to the extent that we believe is proper. We'll also have the right to settle any claim or suit within: o any deductible that applies; or

the available limit of coverage.

However, we won't agree t o the final settlement of any claim or suit without your consent. If you refuse to give us your consent to a proposed settlement of a clairn or suit, we won't pay more than the amount o f such proposed settletnerit for the combined total o f the following for such claim or suit: 0 Damages.

Defense expenses incurred after you refuse to give us your consent to the proposed settlement.

Our duty to defend protected persons against claims or suits for loss covered by this agreement ends when we have used up the l imit of coverage that applies with the payment of: 0 judgments;

settlements; or o defense expenses.

Defense expenses means the following fees, costs, and expenses that result directly from the investigation, defense, or appeal of a specific claim or suit:

o Fees. costs, and expenses o f hired or appointed attorneys. The cost o f the proceedings involved in the suit, including court reporter's, arbitrator's, and mediator's fees.

0 Fees for witnesses.

o Independent expert's and special investigator's fees, costs, and expenses.

However, we won't consider any of the following to be defense expenses: o Our expenses, including salaries, wages,

and traveling expenses of our employees, other than fees, costs, or expenses

43997 Rev. 12-03 Printed in U.S.A. @St.Paul Fire and Marine Insurance Co. 2003 P

incurred by attorneys employed by us in connection with a specific claim or suit. Fees, costs, or expenses for coverage opinions.

* The cost o f appeal bonds. 0 Our recovery expenses.

o Adjuster's fees paid to independent adjusters or attolneys for adjusting claims.

Right to appeal a judgment against a protected person. We'll have the right to appeal a judgment that includes damages covered by this agreement if:

o we defend a protected persorl against the suit; and

8 the judgment is awarded against that protected person.

I f we appeal such a judgment, we'll pay the cost o f any required appeal bond, but only for that part o f the judgment that is for damages covered by this agreement and is within the available limit o f coverage. However, we'll pay, or reimburse the protected person for, the cost of a higher appeal bond amount i f we're required to do so under the law that applies. But we won't be the principal under any such bond. Nor do we have a duty to furnish any appeal bond. Such costs are in addition to the limits o f coverage. However, the results o f an appeal won't change the lirnits o f coverage that apply urider this agreement.

Transfer of control of defense of outstanding claims or suits. Before the available l imit o f coverage that applies Is used up, you may take over control of the defense o f any outstanding claim or suit previously reported to us i f you and we agree, or i f a court orders you t o do so.

I f the limit o f coverage that applies is used up, we'll not i fy you as soon as we can o f ail outstanding claims or suits that we are defending subject to that l imit so that you can arrange to take over control o f their defense.

During a transfer of control o f defense to you of any such outstanding clairn or suit, we agree to take whatever steps are necessary to contirlue that defense and avoid a default judgment. When we take such steps, you agree that we won't waive or otherwise give up any o f our rights under this agreement. You also agree to repay the reasonable expenses we incur for any such steps taken after the available lirnit of coverage is used up.

Insuring Agreement ,I1 Rights Reserved Page 5 o f 16

Additional payments. We'll have the duty to make only the payments described below, in addition to the limits of coverage, in connection with any claim or suit against a protected person when we:

investigate or settle the claim or suit; or 0 defend the protected person against the

claim or suit.

Our duty to make such payments in connection with claims or suits for loss covered by this agreement ends when we have used up the l imit of coverage that applies with the payment of: r judgments; r settlements; or 0 defense expenses.

Our expenses. All expenses we incur, o the~ than defense expenses.

Bonds to release property. The cost of bonds to release property that is being used to secure a legal obligation. But only for bond amounts within the limit of coverage that applies. We don't have to furnish such bonds.

Expenses incurred by protected persons. All reasonable expenses that any protected person incurs at our written request while helping us investigate or settle. or defend a protected person against, a claim or suit. However, we won't pay more than $500 per day for earnings actually lost by the protected person because of time taken of f work, and we won't pay more than a total o f $10,000 for all such expenses incurred by all protected persons for all claims or suits f irst made or brought against a protected person and reported to us in a policy year.

Taxed costs. Al l costs taxed against any protected person for loss covered by this agreement in a suit.

Prejudgment interest. Al l interest that accumulates before a judgment and is awarded against the protected person on that part of a judgment we pay. But i f we make a settlement offer to pay the available limit o f coveraae. we won't oav the prejudgment intsrest that accumulated after the date of that offer.

Postjudgment interest. All interest that accumt~lates on the full amount of that part of a judgment for which we make a payment. But only from the date o f the judgment to the date we pay, or deposit in

court, the l imit of coverage that applies to the judgment. !

When This Agreement Covers

When a claim, suit, or disciplinary proceeding must be first made or brought against a protected person and reported to us. We'll apply this agreement to claims or suits for loss covered by this agreement, or disciplinary proceedings that result in disciplinary proceeding expenses covered by this agreement, only when they're first : r made or brought against a protected

person in a policy year and reported to us in the same policy year;

e made or brought against a protected person in a policy year and reported to us during the limited reporting period that starts on the ending date of that policy year;

r made or brought against a protected person in the last policy year and reported to us during the non-practicing attorney reporting period or the extended reporting period, if such reporting period applies or

o made or brought against a protected person during the non-practicing attorney reporting period or the extended reporting period and reported to us during such reporting period, i f such reporting period applies.

Limited reporting period means the 60 days, starting with the ending date of a policy year, during which claims or suits for loss covered by this agreement. or disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement, that are f irst made or brought against a protected person in that policy year may be first reported to us.

Non-practicing attorney reporting period means the unlimited time period starting wi th the ending date of this agreement, during which claims or suits for loss covered by this agreement, or disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement: r that are f irst made or brought, in the last

policy-year, against the protected person named in the Non-Practicing Attorney Reporting Period Endorsement may be first reported to us; or

e may be first made or brought against such ( protected persons and reported to us.

Page 6 of 16 mSt.Paul Fire and Marine Insurance Co. 2003 Al l Rights Reserved

We'll consider all claims or suits for loss covered by this agreement that is caused by: 8 the same wrongful act; or

related wrongful acts; to have been first made or brought against a protected person when the first o f those claims or suits was first made or brought against a protected person, regardless of whether such date is before or while this agreement is in effect.

We'll consider all disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement that are caused by: e the same wrongful act; or

0 related wrongful acts;

to have been first brought against a protected person when the first o f those disciplinary proceedings was first brought against a protected person, regardless o f whether such date is before or while this agreement is in effect.

Extended reporting period rneans the 12- month, 24-month, 36-month. or unlimited time period, as specified in the Extended Reporting Period Endorsement, starting with the ending date o f this agreement, during which claims or suits for loss covered by this agreement, or disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement:

that are f irst made or brought against a protected person in the last policy year may be first reported to us; or

a may be first made or brought against a protected person and reported to us.

When w e consider a claim, suit, or disciplinary proceeding to be first made or brought against a protected person. We'll consider a claim or suit for loss covered by this agreement, or a disciplinary proceedirig that results in disciplinary proceeding expenses covered by this agreement, to be first made or brought against a protected person on the earlier of the following dates: 0 The date that we or any protected person

first receives a written notice o f such claim, suit, or discipiirlary proceeding.

e The date that we first receive a written notice from any protected person o f a specific wrongful act that caused the loss which resulted in such claim or suit, or that caused such disciplinary proceeding.

When w e consider a claim, suit, or disciplinary proceeding to be first reported to us. We'll consider a claim or suit for loss covered by this agreement, or a disciplinary proceeding that results in disciplinary proceeding expenses covered by this agreement, to be first reported to us on the earlier of the following dates:

e The date that we first receive a written notice of such claim, suit, or disciplinary proceeding from any protected person or from the person or organization making the claim or bringing the suit or disciplinary proceeding.

8 The date that we first receive a written riotice from any protected person o f a specific wrongful act that caused the loss which resulted in such claim or suit or that caused such disciplinary proceeding.

We'll consider all clairn5 or suits for loss covered by this agreement that is caused by:

8 the same wrongful act; or e related wrongful acts; t o have been first reported t o us when the first of those claims or suits was first reported to us.

We'll consider all discplir~ary proceedings wh~c l i result in disciolinarv p~oceedinq expenses covered b\j thisagreement that are caused by: e the same wrongful act; or 0 related wrongful acts; to have been first reported t o us when the first of those disciplinary proceedings was first reported to us.

What w e require in a written notice of a specific wrongful act We'll consider a claim, suit, or disciplinary proceeding to be first made or brought against a protected persorl and reported t o us on the date we first receive a written notice from any protected person o f a specific wrongful act only i f that notice also contains all o f the following information: e A descriptiori of what damages may result

from the wrongful act in a potential claim or suit.

0 'The identity o f the claimant or potential claimant.

0 The identity o f the protected person that comrriitted the wrongful act.

0 A description of the date, time, place, and circumstances of the wrongful act.

Notice to us that:

43997 Rev. 12-03 Printed in U.S.A. lnsurlrlg Agreement oSt.Paul Fire and Marine Insurance Co. 2003 Al l Rights Reserved Page 7 of 16

all or part o f any protected person's legal services may in the future be discovered to be a wrongful act; and

any protected person may in the future receive written notice of a wrongful act, claim, suit, or disciplinary proceeding from one of the protected person's clients or others resulting from such services;

is not notice o f a specific wrongful act.

When the limited reporting period will apply. The limited reporting period wi l l automatically apply on the ending date of the policy year without an additional premium. The limited reporting period may not be canceled by you or us once i t applies.

However, the limited reporting period won't apply to claims or suits for loss covered by this agreement, or disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement, that:

o are covered by any other insurance you buy which takes effect on or after the ending date of this agreement; or

e i f the limits o f coverage of such other insurance have been used up, would have been covered by such other insurance i f such limits hadn't been used up.

How the limited reporting period applies. The limited reportins period doesn't extend the time that 'this G&ement is in effect. As a result, when the limited reporting period applies, we'll consider any claim or suit for loss covered by this agreement, or any disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement, that is:

f irst made or brought against a protected person in a policy year;

0 and reported to us during the limited reporting period that starts on the ending date of that policy year;

to have been reported to us on the ending date o f that policy year.

When and how a nun-practicing attorney reporting period can be added. If the non- practicing attorney reporting period conditions are met, a non-practicing attorney reporting period can be added with a Non- Practicing Attorney Reporting Period Endorsement, without an additional premium.

Non-practicing attorney reporting period conditions means all o f the following:

We receive a written request for the Non- Practicing Attorney Reporting Period

Endorsement for a protected person who is stated in the request t o be retiring f rom, the practice o f law. We receive such written request within 60 days after the ending date of the policy year in which such protected person retires from the practice of law. The license or other right to practice law of such protected person isn't revoked or suspended by, or surrendered a t the demand of, any regulatory authority.

o We, or any o f our affil iated insurance companies: have cont in~~ously provided lawyers professional liability insurance protection to you for at least f ive years before the date the Non-Practicing Attorney Reporting Period Endorsement is requested.

e The earned premium for this policy is paid in full. Any deductible you owe us under this agreement is repaid.

0 You and the protected person requested to be named in the Non-Practicing Attorney Reporting Period Endorsement have fulfil led all other duties, and complied with all other conditions and requirements, under this agreement.

But once the Non-Practicing Attorney I Reporting Period Endorsement takes effect, it may not be canceled by you or us.

How the non-practicing attorney reporting period applies. When the non-practicing attorney reporting period applies, i t doesn't extend the time that this agreement is in effect. As a result, when the non-practicing attorney reporting period applies, we'll consider any claim or suit for loss covered bv this agreement, or any disciplinary p;oce&ding which results in disciplinary proceeding expenses covered by this agreement, that is:

f irst made or brought, in the last policy year, against the protected person named in the Non-Practicing Attorney Reporting Period Endorsement and reported to us during the non-practicing attorney reporting period; or

0 first made or brought against such protected person and reported to us during the non-practicing attorney reporting period;

to have been first made or brought against a protected person and reported t o us on the ending date o f this agreement.

However, the Non-Practicing Attorney Reporting Period Endorsement won't amlv to claims 6 suits for loss covered by this '

~~~ ~ ~ ~~~ ~~-~~ ~ ~~-~~~ ~~~~~~~~~~~~ ~~ ~ ~ -p

Page 8 o f 16 oSt.Pau1 Fire and Marine Insurance Co. 2003 Al l Rights Reserved

agreement, or disciplinary proceedings which In addition. the extended reporting period result in disciulinarv proceedins expenses wi l l cause us to ~ D D ~ Y this asreement as covered by this agieement, thai: excess insurance ove; certainlother e are covered by any other insurance; or insurance. We explain when and how we'll

do so in the Other Insurance section. i f the limits of coverage o f such other insurance have been used would have What we'll charge for the extended reporting beer1 covered by such other insurance i f such limits hadn't been used up. period. We'll charge an additional premium

for the extended reporting period. The arnount o f that premium differs depending

When and how an extended reporting period can on the length of extended reporting periods be added. If this agreement is canceled or available. The premium for each available not renewed for any reason, an exterided option is shown in the Coverage Summary. reporting period can be added with an Extended Reporting Period Erldorsoment and the payment of an additional premium. Where This Agreement Covers

However, the Extended Reporting Period Endorsement won't take effect tmless we We'll apply this agreement to loss and

~ ..... receive all the following within 60 days disciplinary proceeding expenses covered by after the ending date of this agreement, and this agreement that are caused bY wrongful you have fulfil led all other duties, and acts committed anywhere in the world. complied with all other conditions and requirements, under this agreement: Who Is Protected Under This Agreement

A written request from you to purchase the Extended Reporting Period Endorsement. Individual. I f you're shown in the

0 Full payment of the earned premium for introduction as a named insured and an this agreement. iridividual, you and your spouse are

protected persons only for: 0 Payrnent o f the additional premium for the

Extended Reporting Period Endorsement. legal services of your business o f which you're the sole owner; and

Repayment of any deductible you owe us under this agreement. e your publishing or nonprofit services.

But once the Extended Reporting Period Endorsement takes effect, i t may not be canceled by you or us.

How the extended reporting period applies When the exterided reporting period applies, i t replaces the limited reporting period. Ttie extended reporting period doesn't extend the time that this agreement is in effect. As a result, when the extended reporting period applies, we'll consider any claim or suit for loss covered bv this aareement. or anv disciplinary proceeding-wllich ~Gsults in disc:plinary proceeding experlses covered by this agreement, that i i : 0 first made or brought against a protected

person in the last policy year and reported to us during the extended reporting period; or

Partnership. I f you're shown in the lntroduction as a named insured and a partnership you're a protected person. Your partners and their spouses are 'protected persons only for: * legal services of such partnership; and

your partners' publishing or nonprofit services.

Limited liability company. I f you're shown in the lntroduction as a named insured and a limited iiability company, you're a protected person. Your members and managers are protected persons only for: e legal services o f such limited liability

company; and - their pubiishing or nonprofit services. . .

e first made or brought against a protected Corporation, pr0feSSi0nal association, or other person and reported to us during the organization. I f you're shown in the extended reporting period; Introduction as a narned insured and a

corporation, a professional association, or to have been first made or brought against an other organization, you're a protected a protected person and reported to us on person. Your directors, executive officers, the ending date of this agreement. and shareholders who are lawyers are

protected persons only for:

43997 Rev. 12-03 Printed in U.S.A. Insuring Agreement @St.Paul Fire and Marine Insurance Co. 2003 Al l Rights Reserved Page 9 o f 16

legal services of such corporation, professional association, or other organization; and

labor leasing firm; or temporary help service.

e their publishing or nonprofit services. Leased temporary worker means a leased worker who is hired to:

Other organization means an organization e temporarily take the place of a permanent other than a corporation, professional employee on leave; or association, partnership, or limited liability . meet seasonal or short-term workload company. conditions.

Executive officers means any person holding an officer position created by the charter, constitution, by-laws, or any other similar governing document, o f a corporation or other organization.

Employees, of counsel attorneys, and independent contractors. Your empioyees, of counsel attorneys. and independent contractors are protected persons only for claims or suits for loss covered bv this asreement. or disciplinary proceedings wFich result in disci~l lnarv uroceedinq expenses covered by this agreement, that result from work done within the scope o f their employment by, or contract with, you and: e the performance of. or failure to perform,

your legal services or their nonprofit services; or

e their publishing.

But, we won't apply this Employees. o f counsel attorneys, and independent contractors section to the following protected persons:

Your managers i f you're a limited liability company. Instead, we'll apply the Limited iiability company section to them.

o Your executive officers or shareholders i f you're a corporation. an other organization. or a professional association. instead, we'll apply the Corporation, professional association, or other organization section to them.

Employee includes a leased worker and a leased temporary worker.

Leased worker means any person who: e is hired from an employee leasing firm

under a contract or agreement between the hirer and that firm; and

o is performing duties related to the conduct o f the hirer's business.

Employee leasing firm means any person or organization that hires out workers to others. i t includes any: - employment agency, contractor, or service;

Lawyers before they became your partners, shareholders, or employees. Your partners. shareholders, and employees who are lawyers are also protected persons for claims or suits for loss covered by this agreement, or disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement, that result from the performance of, or failure to perform, legal services by or on behalf of such lawyer before such lawyer became one of your partners, shareholders, or employees.

However, as with ail protected persons, such loss or disciplinary proceeding expenses covered by this agreement must be caused by a wrongful act committed on or after any retroactive date that applies and before the ending date o f this agreement.

In addition. we'll apply the coverage ', provided in this section as excess insurance over any other insurance. We explain how we'll do so in the Other Insurance section.

Former partners, members, directors, executive officers. shareholders. emolovees. indeoendent contract'ors, or of counsel' atiorneys who have lef t your organization. I f you're a partnership, any o f your partners who has lef t your partnership is a protected person, but only for:

legal services of such partnership; and e publishing or nonprofit services while such

partner was one of your partners.

If you're a limited liability company, any o f your members who has left your limited liabiiity company is a protected person, but only for:

legal services of such limited liability company; and

e publishing or nonprofit services while such member was one of your members.

If you're a corporation, a professional association, or other organization, any of your directors, executive officers, or shareholders who are lawyers who has left your corporation, professional association,

Page 10 of 16 ceSt.Pau1 Fire and Marine Insurance Co. 2003 Al l Rights Reserved

or other organization is a protected person, but only for:

legal services o f such corporation, professional association, or other organization; and

publishing or nonprofit services while such director, executive officer, or shareholder was one o f your directors, executive officers, or shareholders.

Any o f your employees who has lef t your organization is a protected person, but only for claims or suits for loss covered by this agreement, or disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreernerit, that result from work done within the scope of the employee's eniployment by you and:

the performance of, or failure t o perform. your legal services, or nonprofit services while such employee was one of your employees; or

e publishing while such employee was one of your employees.

Ariy of your of counsel attorneys or independent contractors who is no longer providing services as an o f counsel attorney or independent contractor to your organization is a protected person, but only for claims or suits for loss covered by this agreement, or disciplinary proceedings which result in disc~plinary proceeding expenses covered by this agreernent, that result from work done within the scope o f the of counsel attorr~ey's or independent contractor's employment by, or contract witti, you and:

8 the performance of, or failure to perform. you; legal services, or nonprofit services while such o f counsel attorney or independent contractor was one of your of courisel attorneys or independent contractors; or

e publishing while such of counsel attorney or independent contractor was one o f your of counsel attorneys or independent contractors.

policy year. Legal representatives of certain protected persons. Any legal representative o f a We explain when we consider a claim 01 protected person who has died, become suit to be: mentally incompetent, insolvent. or bankrupt . first made or brought against a protected is a protected person only for the rights and and duties of that deceased, mentally incom~eterit, insolvent, or bankruot protected * first reported to US; . . persoti under this agreement. in the When This Agreernent Covers section.

Legal representative includes the estate and any heir, executor, administrator, and trustee.

Predecessor firms. Any predecessor firrn is a protected person only for legal services o f such firm.

Predecessor firm means any legal entity:

e that was engaged in the practice of law; arid to whose financial assets and liabilities you are the majority successor in interest.

Limits Of Coverage

The limits o f coverage shown in the Coverage Summary and the information contained in this section f ix the most we'll pay under this agreernent. regardless of the number of: e protected persons;

claims rnade or suits or disciplinary proceedings brougtit; or

e persons or organizations making claims or bringing suits or disciplinary proceedings.

I f you refuse to give us your consent to the settlemerit of a claim or suit, the limits o f coverage available for damages and certain defense expenses for that claim or suit are reduced to the amount of such proposed settlement. We explain how in the Right and duty to defend a protected person section.

Each wrongful act limit. This is the most we'll pay as damages arid defense expenses for all claims or suits for loss covered by this agreement, other than under the Publishing and nonprofit services liability section, that is caused by: e the same wrongful act; or e related wrongful acts.

Total limit This is the most we'll pay as damages and defense expenses for the combined total of all clairns or suits for loss covered by this agreement that are f irst made or brought against one or more protected persoris and reported t o us in a

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Publishing and nonprofit services liability limit . first made or brought against such This is the most we'll pay for the combined protected person and reported to us during ( total of: the non-practicing attorney reporting

o all damages covered under the Publishing period, i f such endorsement is added.

and nonprofit services liability section; and If the extended reporting period is added,

the Total limit and the Disciplinary a l l defense expenses for claims or suits proceeding expenses l imit that apply on the seeking such damages; ending date of this agreement aren't

for al l claims or suits that are first made or renewed for claims or suits for loss covered brought against one or more protected by this agreement, or for disciplinary Dersons and reported to us in a P O ~ ~ C V Year. Droceedinas which result in d isc i~ l inarv

This l imit is part o f and not in addition to the Total limit shown in the Coverage Summary.

We explain when we consider a claim or suit t o be:

f irst made or brought against a protected person; and

o f irst reported to us; in the When This Agreement Covers section.

Disciplinary proceeding expenses limit This is the most we'll pay for the combined total of all disciplinary proceeding expenses covered under the Disciplinary proceeding expenses section for all disciplinary proceedings that are first brought against one or more protected persons and reported to us in a policy year.

We explain when we consider a disciplinary proceeding to be:

first made or brought against a protected person; and

o f irst reported to us; in the When This Agreement Covers section.

How the limits of coverage apply to the limited reporting period, the non-practicing attorney reporting period, and the extended reporting period. The limits of coverage that apply at the ending date of this agreement aren't renewed or increased for claims or suits for loss covered by this agreement, or for disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement, that are:

first made or brought against a protected person in a policy year and reported to us during the limited reporting period that starts on the ending date of that policy year; f irst made or brought, in the last policy year, against the protected person named in the Non-Practicing Attorney Reporting Period Endorsement and reported to us during the non-practicing attorney reporting period, i f such endorsement is added: or

broceedin; expenses covered by 'this '

agreement, that are f irst made or brought against a protected person in the last policy year that this agreement is in effect and reported t o us during the extended reporting period. However, the Total l imit and the Disciplinary proceeding expenses l imit that apply on the ending date o f this agreement are renewed in ful l for claims or suits for loss covered by this agreement, and for disciplinary proceedings which result in disciplinary proceeding expenses covered by this agreement, that are first made or brought against a protected person and reported to us during the extended reporting period.

Deductibles

The deductibles shown in the Coverage Summary and the information contained in this section fix the amount of damages, incurred by you or any other protected person, that you'll be responsible for paying and over which the limits of coverage wi l l apply, regardless of the number of: 0 protected persons; o claims made or suits brought; or e persons or organizations making claims or

bringing suits.

The deductibles won't apply to payments We make under the: . Disciplinary proceeding expenses section;

or . Additional payments section.

Nor wi l l the deductibles apply to defense expenses.

If we settle a claim or suit, or pay a judgment awarded in a suit, that is subject to a deductible, we'll pay the deductible as part of the settlement or judgment. You agree to repay us the deductible amount as soon as we not i fy you of any settlement or ( judgment.

Page 12 of 16 oSt.Paul Fire and Marine Insurance Co. 2003 Al l Rights Reserved

I f you fail to repay us a deductible amount we've paid, and we're awarded the deductible amount we sought, or any part of that arnount, in any legal proceeding against you, you agree to pay us the amount o f the award and the following: e Our deductible recovery expenses. o Interest, from the date o f our notice of

payment to you, on the deductible amount awarded t o us.

Our deductible recovery expenses nieans all fees, costs, and expenses incurred by us arid our attorneys to recover a deductible amount in a legal proceeding brought by us against you. However, i f the deductible amount awarded to us is less than the full arnount of the deductible payment we sought, our deductible recovery expenses wi l l be a proportional amount based ori the ratio o f the deductible arnount awarded t o the ful l amount o f the deductible payment we sought.

Each wrongful act deductible. You'll be responsible for the arnount o f damages within this deductible for all loss covered by this agreement that is caused by: o the same wrorigful act; or 8 related wrongful acts.

Total deductible. This is the most you'll be responsible for paying for all Each wrongful act deductibles for all claims or suits for loss covered by this agreement that are first made or brought against orie or rnore protected persons and reported to us in a policy year.

We explain when we consider a claim or suit to be: e first made or brought against a protected

person; and first reported to us;

in the When This Agreement Covers section.

I f NIA is shown for the Total deductible in the Coverage Sumrnary or i f i t is left blank, you'll be responsible for paying the Each wrongful act deductible regardless of how often i t applies.

I f the extended reporting period is added, the Total deductible that applies on the ending date o f this agreement doesn't apply separately t o claims or suits for loss covered by this agreement that are first made or brought against a protected person during the last policy year and reported to us during the extended reporting period. However, the total deductible that applies or1 the ending date o f this agreernent applies separately t o claims or suits for loss covered by this agreement that are first made or brought against a protected person and reported to us during the extended reporting period.

Exclusions - What This Agreement Won't Cover

Criminal, dishonest, or fraudulent wrongful acts or knowing violation of rights or laws. We won't cover loss that results from any crimirial, dishonest, or fraudulent wrongful act or any knowing violation of rights or laws corrimitted by: e any protected person; or e anyone with the consent or knowledge o f

any protected person.

But we won't apply this exclusion to any protected person who isn't shown in the lritroduction as a named insured and who didn't:

e commit, have knowledge of, or acquiesce in such wrongful act or violation; or

8 gain an advantage, as a result o f sucti wrongful act or violation, to which sucti protected person knew or should have known the protected person otherwise wouldn't be entitled.

Also, we won't apply this exclusion to loss caused by malicious prosecution or abuse of process.

Known wrongful acts. We won't cover loss that results from any actual or alleged wrongful act, including any part o f such related wrongful acts, that any described individual protected person knew about before the beginning date o f the following:

I f the non-practicing attorney reporting * This agreement, i f this agreement is riot in period is added, the Total deductible that effect for more than one policy year. applies on the ending date o f this agreement * The policy year in which the clairn or suit doesn't apply separately to claims or suits for such loss is f irst made or brought to which the Non-Practicing Attorney against a protected person, i f this Reporting Period Endorsement applies. agreement is in effect for more than one

policy year.

43997 Rev. 12-03 Printed in U.S.A. Insuring Agreement @St.Paul Fire arid Marine Insurance Co. 2003 Al l Rights Reserved Page 13 o f 16

Described individual protected person means a person that is any of the following or was any of the following at the time of the person's knowledge of such wrongful act:

You or your spouse i f you're an individual. Any of your partners or their spouses i f you're a partnership.

o Any of your members and managers i f you're a limited liability company.

e Any of your directors, executive officers, or shareholders who are lawyers i f you're a corporation, a professional association, or an other organization.

o Any of your employees who is or acts as your insurance or risk manager.

Nonprofit services liability exclusions. The following exclt~sions apply only to the nonprofit services liability protection provided by the Publishing and nonprofit services liability section and they apply to that protection in addition to the exclusions set forth above: . Claims or suits made or brought by the

nonprofit entity. o Employee Retirement Income Security Act. o Failure to obtain or maintain insurance or

bonds.

Claims or suits made or brought by the nonprofit entity. We won't cover loss that results from any claim or suit that is made or brought by or on behalf of: . the nonprofit entity or any of i ts affiliates

or subsidiaries; or 0 the attorneys' bar association; for which the protected person's nonprofit services are performed or failed to be performed.

Nor wi l l we cover loss that results from any claim or suit that is made or brought by or on behalf of any of the directors, officers, or trustees of such nonprofit entity or attorneys' bar association.

But we won't a o ~ l v this exclusion i f the

Employee Retirement Income Security Act. We won't cover loss that results from any violation of responsibilities, obligat~ons, or i duties imposed by the: e Employee Retirement Income Security Act

of 1974, or any of i ts amendments; or any similar state or provincial law.

Failure to obtain or maintain insurance or bonds, We won't cover loss that results from the failure to obtain or maintain any:

insurance; self-insurance;

0 self-insured retention; or bond;

including inadequate coverage or limits.

Other Insurance

This agreement is primary insurance. However, i f there is any valid and collectable other insurance for loss or disciplinary proceeding expenses covered by this agreement, we'll apply this agreement in connection with that other insurance in accordance with the rest of this section.

Other insurance means insurance, or the i funding of losses, that is provided by or through:

another insurance company; e us, except under this agreement; r any of our affiliated insurance companies; r any risk retention group; r any self-insurance method or program,

other than any funded by you and over which this agreement applies; or

o any similar risk transfer or risk management method.

However, we won't consider umbrella insurance, or excess insurance, that you bought specifically to apply in excess o f the limits of coverage that apply under this agreement t o be other insurance.

claim or suit i s inade or brought and When there is primary other insurance, we'll continued by or on behalf of such nonprofit share with that insurance the payment of entity or attorneys' bar association without loss or disciplinary proceeding expenses the solicitation, assistance, active covered by this agreement. We'll do so participation, or intervention of the: with one of the methods o f sharina . . , . . , - . . - - . . . . - . . . - . . . - - - - - -

directors, officers, or trustees of such described in the Methods o f sharin; section. nonprofit entity or attorney's bar association; or However, i f the extended reporting period such nonprofit entity or attorneys' bar applies, we'll apply this agreement as excess(

association itself. insurance over that part of any other insurance that is in effect during the extended reporting period and pFovides

- Page 14 of 16 @St.Paul Fire and Marine Insurance Co. 2003 Al l Rights Reserved

C1 m m D

8 0

"'=stkuI

0 0

coverage for clairrls or suits for loss 0 the total amount that all such other covered by this agreement, or disciplinary insurance would pay i f this agreement proceedings which result in disciplinary didn't exist; and proceeding expenses covered by this agreement, that are: 0 the total of all deductible and self-insured

0 arnounts under all sucti other insurance.

0 f irst made or brought against a protected I- person in the last policy year and reported But we won't pay more than the l imit of

8 to us during the extended reporting period; coverage that applies under this agreement. 0 or -. f irst made or brought against a protected NlethodS of sharing. We'll use One the w

N person and reported t o us during the methods o f sharing described below: o extended reporting period.

Contribution by equal shares I f a l l of the I * We'll do so whether such other insurance other insurance permits contribution by equal

applies on a primary, excess, contingent, or "lare the 'Overed loss Or

m any other basis. disciplinary proceeding expenses equally. But we won't pay more than the l imit of

P coverage that applies under this agreement. Also, we'll apply this agreement as excess if the limit of coverage that applies under t? insurance over: any of the applicable insurance, including 8 .- any other insurance available to the this agreement, is used up before the entire m protected person in the capacity as a City arnount of the covered loss or disciplinary 3 w or County Attorney; proceeding expenses is paid, the insurance . any other insurance or any indemnity the that remains wi l l share the balance o f the 0 attorneys' bar association or nonprofit covered loss or disciplinary proceeding 0 v entity provides or makes available t o the expenses equally until: o protected person for loss covered by the 0 the limits of coverage that apply under the * Publishing and nonprofit services liability remaining insurance have beer1 used up; or

section; and e the entire amount o f the covered loss or any other insurance for loss or disciplinary proceeding expenses is paid. disciplinary proceeding expenses covered by the Lawyers before they became your For example: - - - partners, shareholders, or employees

?szz section. You're required by a court to pay damages - = of $10,000,000. Besides this agreement.

We'll do so whether such other insurance or which we'll consider to be a policy for indemnity applies or1 a primary, excess.

- contingent, or any other basis. purposes of this example, two other

z?z=zz - policies (Policy B and Policy CI apply to the judgment. The limit of coverage that = We explain how we'll apply this agreement applies - as excess insurarice in the Excess insurance

section. 0 this agreement is $5,000,000; . .. - =

Policy B is $1,000,000; and Excess insurance. When this agreement is = excess insurance, we won't have a duty to

0 Policy C is $3,000,000. defend the protected person against the part ~ i ~ ~ t , $1,000,000 is subtracted from EEE! or parts of any claim or suit for which any poliqs limit of coverage because *hat is provider of other insurance has the duty t o the lowest limit of that a plies ~ ~~ - defend that protected person.

iiii?il = under any of the three policies. T e result - However, we'll defend the protected person

R - 3 against a claim or suit for loss covered by $4,000,000 remains of this agreement's m this agreement i f no provider of other limit of coverage;

insurance wil l do so. In return, we'll require = that we be given a l l of the protected Policy LTs limit of coverage is used up;

person's rights against each such provider of $2,000,000 remains of Policy c s limit of other insurance. coverage," and

Also, we'll pay only the amount o f loss or 0 the balance due on the judgment is disciplinary proceeding expenses covered by $7,000,000; this agreement that are in excess of:

43997 Rev. 12-03 Printed in U.S.A. Insuring Agreement eSt.Pau1 Fire arid Marine Insurance Co. 2003 Ai l Rights Reserved Page 15 of 16

Next, $2,000,000 is subtracted under this List Of Terms With Defined Meanings Shown In agreement and under Policy C because that This Agreement amount equals the smallest amount i

remaining of the limit of coverage that applies under the initial This section lists in alphabetical order the

$7,000,000 payment. The result is: terms that have or include defined meanings shown in this agreement. The defined

$2,000,000 .. . . remains of this agreement's meaning for each o f these terms: limit of coverage; begins on the page shown for that term; Policy Cs limit of coverage is used up; and and the balance due on the judgment is now $3,000,000.

Finally, the remainder of the limit of coverage under this agreement is paid. 7he result is: 0 this agreemenfs limit of coverage is used

UP," o the total paid under the three policies is

$9,000,000; and 0 the balance due on the judgment is now

S 1,000,000, that you must pay.

Contribution by limits of coverage. i f any of the other insurance doesn't permit contribution by equal shares, we'll pay the portion of the covered loss and disciplinary proceeding expenses that is equal to our percentage of the total of all l imits of coverage that apply. But we won't pay more than the limit o f coverage that applies under this agreement. For example:

You're required by a court to pay damages of $6,000,000. Besides this agreement, which we'll consider to be a policy for purposes of this example, another policy (Policy 5) applies to the judgment. The limit of coverage that applies under this agreement is $3,000,000. Policy B has a $1,000,000 limit of coverage that a plies. The total of all limits of coverage t at apply is $4,000,000.

R

o is usually located immediately fol lowing where that term is f irst used in this agreement.

However, one or more endorsements or other forms made part o f your policy may, without changing this section: 0 delete or change the defined meaning for

any of these terms; or 0 add a defined meaning for any other term.

Term City or county attorney Claim Damages Defense expenses Described individual protected Derson Disciplinary proceeding Disciplinary proceeding expenses . . - . Employee Employee leasing firm Executive officers Extended reporting period Last policy year Leased temporary worker Leased worker Legal representative Legal services Limited reporting period Lobbyist Non-practicing attorney reporting period Non-practicing attorney reporting period

conditions Nonprofit entity Nonprofit services

Page 3 3 2 5

14 4 4

10 1 10 '1 0 7 3

10 10 11 2 6 3 6

8 4 4

-.,,.., ,,. "... ..#,*" 8 - Our percentage is 75% Other organization 10 13,000,000/4,000,000 of the total of all Our deductible recovery expenses 13 limits of coverage that apply. But we Personal injury offense 3 wodf pay 75% of the judgment because Policy year 3 that $4,500,000 share is more than our Predecessor f i rm 11 limit of coverage. We'll only pay our limit Protected Person 2 of coverage, which is $3,000,000. Publishing 4

Related wronaful acts 3 Retroactive dste Suit Wrongful act

Page 16 o f 16 @St.Paul Fire and Marine Insurance Co. 2003 Al l Rights Reserved

GREENWCH INSURANCE COMPANY PROFESSIONAL, LIABILITY

PROFESSIONAL LIABILITY INSURANCE FOR LAWYERS CLAIMS MADE AND REPORTED POLICY

THlS IS A CLAIMS MADE AND REPORTED POLICY. THlS POLICY APPLIES ONLY TO CLAIMS FIRST MADE AGAINST THE INSURED DURING THE POLICY PERIOD. THE CLAIM MUST BE REPORTED IN WRITING TO THE COMPANY DlJRlNG THE POLICY PERIOD OR WITHIN 30 DAYS AFTER THE END OF THE POLICY PERIOD SHOWN IN THE DECLARATIONS UNLESS AN EXTENDED CLAIM REPORTING PERIOD APPLIES. DEFENSE EXPENSES ARE WITHIN AND REDlJCE THE LIMIT OF LIABILITY. PLEASE REVIEW THlS POLICY CAREFULLY.

A. DEFINITIONS

Whenever used in this policy, the term:

1. Claim means any demand received by you for money, services or any other thing of value arising out of your acts, errors or omissions in providing professional services

2. Defense expenses means:

a. Fees charged and expenses incurred by attorneys designated by us to represent you;

b. All other fees, costs and expenses incurred at our request in connection with a pre-claim incident, claim or disciplinary action

Defense expenses do not include salaries, compensation or overhead paid or incurred by u s or you

3 Damages means a monetary judgment or monetary award which you are legally obligated to pay or a monetary settlement which we agree to on your behalf, but does not include punitive or exemplary damages, fines, penalties, court-imposed monetary sanctions, or return of legal fees, costs or expenses

4 Disciplinary action means an action brought against you by a bar association, licensing board, disciplinary board. peer review committee or similar entity alleging professional misconduct or violation of the Code of Professional Responsibility.

5. Named lnsured means the person or entity designated in the Declarations as the Named lnsured

6. Our, us, we means the insurance company whose name appears in the Declarations of this policy

7 Policy period means the period from the effective date and time of this policy to the policy expiration date and time as set forth in the Declarations, unless the policy is terminated earlier, in which event the policy period shall end on the date, and time, of such earlier termination

8. Pre-claim incident means an act, error or omission in providing professional services which is reported to us before it is a claim.

9. Professional services means services you perform:

a. For a client in your capacity as a lawyer;

b.. As a mediator, arbitrator, notary public or a title agent;

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lnsured Copy

c . As an administrator, conservator, executor, guardian, trustee, receiver or in any similar fiduciary capacity, provided that such services are performed in connection with and incidental to your practice of law;

d. As a member of a bar association or other legal or lawyer related ethics, peer review, accreditation, licensing or similar board, committee or organization; or

e. As an author, but only for the publication or presentation of research papers or similar work and only if the fees generated annually from all such work are less than $25,000.

10,. You, your or lnsured means:

a,. The Named Insured;

b. Any past or present partner, principal, shareholder, member, officer, director, "of counsel," employed lawyer or independent contractor of the Named Insured, but only while rendering professional services in the course and scope of their duties on behalf of the Named Insured:

c. Any past or present non-lawyer employee of the Named Insured, but only while assisting an lnsured in providing professional services; or

d.. The estate of a deceased lnsured;

e. The guardian, trustee or other fiduciary of a banltrupt lnsured;

f. The guardian, trustee or other fiduciary of an lnsured who has been judiciaily declared incompetent

B. WHAT IS COVERED

Subject to all terms and conditions of this policy, we will pay on your behalf all damages and defense expenses arising out of a claim or pre-claim incident that you first become aware of and reporito us in writing during the policy period

C. DEFENSE AND SETTLEMENT

We will provide for the defense of claims against you seeking damages When we have paid our Limits of Liability, our obligation to deferid you ends While we may seek your input in selecting defense counsel, we retain the right to make that selection

We will not settle any claim without your consent If you refuse to consent within a reasonable time or if you elect to contest the clairn or to continue legal proceedings, then our liability for the claim will not exceed the amount for which the claim could have been settled, plus defense expenses incurred up to the date of your refusal or election to contest or coritir~ue

D. LIMITS OF LIABILITY

1. For each claim, the limit shown in the Declarations as Per Claim is the maximum amount we are obligated to pay for the combined total of all covered darnages and defense expenses arising out of or in connection with the same or related acts, errors, or omissions

2. Subject to the Per Claim limitation above, the maximum amount we are obligated to pay for the combined total of all damages and defense expenses arising out of any and all claims during the policy period will be the amount shown in the Declarations as Aggregate

3. Defense expenses we pay reduce the Limits of Liability

XLSP-LPLPPF (03106) Page 2 Greenwich Insurance Company Printed in U.S.A.

lnsured Copy

E. DEDUCTIBLE

You are obligated to pay all defense expenses and damages up to the amount of the Deductible shown in the Declarations The Deductible shall be payable as defense expenses are incurred or as damages are paid Payment of the Deductible, or portions thereof, shall be made by the Named lnsured within thirty (30) days of our demand for payment

If you purchase an aggregate Deductible option and an amount for the Annual Aggregate Deductible is entered in ltem 5 in the Declarations the most you will be required to pay as the Deductible in any one policy period regardless of the number of claims will be the amount shown in ltem 5 . Annual Aggregate Deductible

F. SUPPLEMENTARY PAYMENTS

1 Defense Of Disciplinary Actions

We will provide for the defense of any disciplinary action brought against you during the policy period. We will pay defense expenses up to a lnaxilnum of $30,000 per policy period, regardless of the number of disciplinary actions brought against you. The Deductible is not applicable to the defense expenses for disciplinary actions, and payments of defense expenses for disciplinary actions will not reduce the Limits of Liability.

2. Other Payments

We will reimburse you for actual loss of earnings and reasonable expenses incurred at our request for attendance at trial or court-ordered hearing, arbitration or mediation Our obligation to reimburse you under this Supplementary Payments provision is limited to $500 per day and $5,000 per claim and $25.000 per policy period The Deductible is not applicable to these payments and payments made under this provision will not reduce the Limits of Liability

This insurance does not apply lo:

1. Any claim arising out of your activities as an investment advisor or accountant

2. Any claim arising out of your activities as a fiduciary under the Employee Retirement Income Security Act of 1974 and its amendments This exclusion does not apply if you are deemed to be a fiduciary solely by reason of legal advice rendered with respect to an employee benefit plan.

3. Any claim seeking damages for physical harm, sickness or death of any person

4. Any claim seeking damages for the destruction, diminution in value or loss of use of tangible property

5. Any claim made by or against any business enterprise not named in the Declarations:

a. Which you controlled or in which you maintained a pecuniary interest at the time of the act, error or omission that gives rise to the claim; or

b. Which arises out of your acts, errors, or omissions in your capacily as an officer, director, partner or employee of such enterprise

You will be deemed to have a pecuniary interest in any enterprise in which you own or hold ten percent (10%) or more of the equity or in which you hold ten percent (10%) or more of all debt instruments issued by such enterprise

6. Any claim by an lnsured against another lnsured

XLSP-LPLPPF (03106) Page 3 Greenwich Insurance Company Printed in U.S.A.

Insured Copy

7. Any claim arising out of acts, errors, or omissions that occurred prior to the effective date of this policy if, on or prior to such date, any insured knew or had a reasonable basis to believe either that a professional duty had been breached or that a claim would be made

8. Any claim arising out of a criminal, intentiorially wrongful, fraudulent or malicious act or omission

This exclusion will not apply to any lnsured who:

a,. Did not participate or acquiesce in such act, error or omission; and

b. Had no knowledge of or reason to suspect such act, error or omission; and

c. Immediately notified us after obtaining Itnowledge of such act, error or ornission

9. Any claim alleging that you are liable for the cost of actual, alleged or threatened discharge, dispersal. seepage, migration, release or escape of pollutants at any time This iricludes any loss, cost or experise arising out of any requested, demanded, ordered or voluntary, testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing or in ariy way responding to or assessing the effects of pollutants Pollutants rneans any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acid, alkalis, chemicals arid waste. Waste includes materials to be recycled. reconditioned or reclaimed.

'10. Liability of others which you assume under any contract or agreement

11. Any claim arising out of the loss or destruction of or diminutiori in the value of any asset in your care, custody or control, or out of the misappropriation of or failure to give an account of any asset in your care, custody, or control, including the cornmirigling of client funds

H ADDITIONAL TERMS AND CONDITIONS

1. Claim or Pre-Claim Incident Reporting Requirements

If you become aware of a claim or report a pre-claim incident. you must:

a,. Advise us inimediately in writing, giving us all details including the specific act, error or omission; the injury or damage which has or may result from such act, error or omission; the circumstances by which you first became aware of the act, error or omission; and, the names, addresses and telephone numbers of all persons who may have knowledge or relevant information;

b. Preserve all documents and other evidence relating to the claim or pre-claim incident;

c. Send u s documents relating to the claim or pre-claim incident when requested;

d. Cooperate with us and defense counsel in the investigation, defense and settlernent of a claim and enforcement of contribution or indeninification actions against others;

e. Attend hearings, depositions, and trials if requested

You niust not admit liability, make any offer of settlement or payments, incur any expense; or assume any obligation arising out of or in any way connected with a claim without our written consent.

XLSP-LPLPPF (03106) Page 4 Greenwich Insurance Company Printed in U.S.A.

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2. Claim Reporting Grace Period

This policy will provide coverage for claims made against you during the policy period and which you report to us in writing within thirty (30) days following the cancellation or nonrenewal of this policy, provided you are in compliance with all the terms and conditions of this policy, including payment of all premiums and Deductibles when due

The claim reporting grace period does not extend the policy period

3.. Multiple Claims

Two or more claims arising out of the same or related transaction or event, or arising out of the same or related act, error or omission, will be considered a single claim and subject to the Per Claim Limits of Liability stated in the Declarations of the policy in effect at the time the first related claim was made against you,

4. Other lnsurance

This policy is excess over any other insurance applicable to a claim, whether such other insurance is stated to be primary, pro rata, contributory, excess, contingent or otherwise This provision will not apply to other insurance written specifically as excess of this policy

5. Representations Of lnsured

The lnsured understands and acknowledges that the decision to issue this policy was based upon the information provided in the application, including any supplements, attachments and replies to underwriter's inquiries The lnsured represents and warrants that all such information is true, accurate and complete

6. Extended Claim Reporting Options

a. Extended Claim Reporting Endorsement If you or we cancel or do not renew this policy, the Named lnsured may have the option to purchase an Extended Claim Reporting Endorsement that would extend the period of lime during which claims may be reported The Extended Claim Reporting Endorsement applies only to claims arising out of professional services rendered prior to the end of the policy period and otherwise covered by this policy

The Named lnsured may purchase an Extended Claim Reporting Endorsement only if:

1) Prior to cancellation, nonrenewal or expiration of this policy, the Named lnsured was in compliance with all the terms and conditions of this policy, including payment of all premiums and deductibles when due; and

2) The Named lnsured agrees that the additional premium paid for the ExLended Claim Reporting Endorsement is non-refundable; and

3) The Named lnsured made no material misrepresentation in the application, any supplements, attachments and replies to undetwriter's inquiries: and

4) The Named lnsured exercises this option and pays the additional premium within thirty (30) days following the cancellation, nonrenewal or expiration of this policy

The additional premium for an Extended Claim Reporting Endorsement shall be:

a) One hundred percent (100%) of the annual premium for a one-year extended reporting period;

XLSP-LPLPPF (03106) Page 5 Greenwich Insurance Company Printed in U.S..A,

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b) One hundred eighty-five percent (185%) of the annual premium for a three-year extended reporting period:

c) Two hundred twenty-five percent (225%) of the annual premium for a five-year extended reporting period.

d) Two hundred fifty percent (250%) of the annual premium for a seven-year extended reporting period

b. Retirement Option Upon retirement from the practice of law, any lawyer who qualiiies as an lnsured shall be entitled to an Extended Claim Reportirig Endorsement with an unlimited reporting period and with no additional premium if the lawyer:

2) Is at least fifty-five (55) year$ otd; and

2) Was employed by the Named lnsured during the policy period and had been insured by us for at least four (4) consecutive policy periods; and

3) Notifies u s of the retirement and requests this Extended Claim Reporting Endorsement within thirty (30) days of the cancellation, nonrenewal or expiration of this policy,.

c. Death or Permanent Disability Option. Any lawyer who qualifies as an lnsured who dies or' becomes permanently disabled shall be entitled to an Extended Claim Reporting Endorsement with an unlimited reporting period and with no additional prernium, if:

1) The lawyer was employed by the Named lnsured during the policy period and died or became disabled during the policy period; and

2) Satisfactory written evidence of death or permanent disability is provided to us; and

3) The lawyer or lawyer's representative notifies us of the death or disability and requests issuance of an Extended Clairn Reporting Endorsement within thirty (30) days following the cancellation, nonrenewal or expiration of this policy

7. Cancellation

The Named lnsured or we can cancel this policy by notifying the other in writing Any return premium will be calculated on a pro rata basis. If we cancel, a written notice of cancellation will be sent to the Named lnsured at the address shown in the Declarations The notice will state the date on which the cancel la ti or^ will become effective The effective date of cancellation will be not less than ten (10) days after notice is mailed to the Named lnsured The effective date of cancellation as stated therein will become the end of the policy period

8. Our failure to enforce any ierms, provisions or conditions, or our failure to exercise any right or privilege, shall not operate or be construed as a waiver of any terms, provisions, conditions, rights or privileges.

9. The first Named lnsured in Item 1 in the Declarations is your sole agent and will act on behalf of all of you in connection with anything that relates to this policy.

10. Assignment

Your interest under this policy may not be assigned without our express written consent

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11. Territory This policy applies only to claims arising from professional services rendered worldwide, provided that the suit is brought or claim is made within the United States, its territories, its possessions, or in Canada

This policy shall nol apply to any claim which would be in violation of the laws of the United States, including, but not limited to, U S economic or trade sanctions or export control laws administered by the U S Treasuiy. Slate Department or Commerce Department

XLSP-LPLPPF (03106) Page 7 Greenwich Insurance Company Printed in U.S.A.

Insured Copy

,ENT BY: GREAT AMERICAN I N S CO;

: GREAT AMERIC4N INSURANCE COMPANIED@ svb.;dieti.. 01 Amrllcnn Flnanclol Corpor.llon

; sm WALNUT s 3 5 T . CIHCtNNATl. OHIO 4520l CG 80 42 (Ed 03 97)

LEGAL PROT~SSIONAL LIABIUTY CLAIMS-MADE FORM

A. DEFINITIONS 6. Our, Us, We means the insurance company whose name appears on the Decbratlons

Whenever used in this policy, the term of this policy

Claim means ,any demand received by you 7. Personal lnjkiry means for money or services (a). arising out of your acts, errors' or omissions in provid- a false arrest detention or imprison- ing Protesslonel Services; or (b! for ment Peis&aI lnjuiy arising out of your per- forniece .of Professional Se~ lcss . . . . . . . . .. . . .. . C,hi~:-Exps"s&=nirisns:

policy period shall end on the date of such earlier termkition

onetary judgment. monetary eward or monetary settlement 9. PradCcessq Flrm m q s any k w lfih to which you are legally obligated to pay, but whose financial assets and liiilities the does not include punitive or exemplary Named inswed is the majority successor damages. :fines, petuiltks, court imposed in interest and which you designate as a monetary sanctions, or return or restitu- Prsdecannor Flrm in your application for tion of legal fees, costs and expenses. this coverage.

4. Esrly Reported lnaidont mama en act. 10. Protoselonal Services mews ssrvlces error, or omission in providrng Profss- you perfonn for a client in your capacrty rstonnl Services which is not the subject as of a written demand received by you for money or serv~ces and m i c h rs reported a a lawyer; to us in writing during the Policy Period in accordance with Section H., No I. b. a med~ator or arbitrator, (Claim or Incident Reporting Requ~rementsl of ttus policy a. a notary public: or

5 Nemed inwrod means the person or en- d. as w admmisb-ator, conservator. ex- t ~ t y designated in the Declarations as the ecutor, guard~an, trustee, recsiver, or Nemed Insured in any slmilar flduc~ary capsc~ty. pro-

C;G 80 42 (Ed 03/97) XS (Page 1 of 71

SENT BY: GREAT AMERICAN I N S CO; 71 380661 41 ; OCI -31 -01 12 :28FM; v ~ t i k alu

. . vided that such services are connected : > I with and incidental to your profession

as a lawyer.

11. You, Your or- Insured means:

a. the Named lnsured and any Prede- cessor Firm:

i b. any paat or present partner. principal, shareholder, member, officer, director,

any Claim settlement we propose to make, you must take full responsibility for, and pay - for; further defense and settlement of the Clalm. Our obligation to you for s Claim settlement we propose to make but to which you object will be limited to the amount of the Claim settlement we propose to make and me Clalm Expenses incurred by us mrough the time we receive your dtijiction to the proposed settlement

"of counsel," or employed lawyer of the Namad lnsured w a Pcedecessor We welcome your input in selecting defense

Firm, but only while rendering Protes- counsel, however we retain the exclusive right

sional Servlaes in the course and to make that selection . .

scope of his or her duties on the be- wf of the Named Insured or a Pm- D- DEFENSE OF DISCIPLINARY IONS deceasor Firm:

Subject to itions of this E. SUPWMENTAkY PAYMENTS

ur behalf all Dam- es arising out of a Wm will reimburse you for actual :loss of

,'Claim or Early Raportiid fnoident which you wrlings m d reasonable expenses inarrred 8t

i l first become aware of and you report to us our request, for attendance at .xiat or court- . . : :in writing durlng the Policy Period ordered hearing, arbitration or mediation Our

, . obliwtion to reimburse vou under this SUD-

C. DEFENSE AND S€ITEMENT

We will provide for the defense of Claims agalnst you seekrng D m g e s that are covered by this policy even if the allegations against you are groundless, false, or fraudulent When we have psid our Ltmits of Liability, our ob- ligation to defend you ends. We have no right OF duty to defend Claims seeking Damages not covered by this policy

;We will not settle any Claim without your ;consent However, you must communicate to

:;us, wnhln a reasonable period of time, your consent or objection to any Claim settlement

:'which we propose to make. I f you object to

plaiientary Payments piovision is limited 'to 8250 psr day, $5,000 per CImlm, and $20 000 in the aggregate. h e r e win be no deductible for payments made under this pro- vision, and any such peyments will not reduce me Limits of Lability available to pay Claim Expensss or Demn~ss.

F. LIMITS OF LIABILITY AND DEDUCIIBLE

1. For eech Clnfm. ihe limit shown in the Declarations as Per Claim is the maximum amount we are obligated to pay for the combined total of all covered Dnrnages and Clalm Expensas arising out of or in connection with the same or related acts,

CG 80 42 (Ed. 03/97) XS (Page 2 of 71

SENT B Y : GREAT AMERICAN I N S CO; PAGE 418

errors, or omiss~ons This limitation applies d. a public officlal or an employee of a regardless of the number of persons govemm%rrtal or quasi-governmental covered by this policy. body, subdivision or agency; or

- 2. Subject to the P u Claim limitation above, the maximum amount we are obligated to pay for the cornb~ned total of all covered Damseras and Claim Expenses arising out of any and all Claims; will not exceed the amount shown in me Declarrrbons as Ag- gregate

3. Claim Ex$answ we pay reduce the Limits of 1.iability available to pay Dmmogos.

h From the amount of Damages and Clalms - Exoffn~sct we oav. we will subtract

o. a real estate title insurance agent or real estate title abstractor, unless the Title Agent Endorsement has been added to this policy

2 Bodily injury, sickness, disease, disability. disfigurepent or death; injury to or destruction of apy rangible .property, in- cluuing the loss of uae thereof. ::

. . 3. Any ~ t a i m &ads by or agkinii rshy bwi-

new enter ine not nsmod 'h the Doo- ierations: " -. I

, .

*. Any cj&* abiu'rirtrirtya" br6ugm by your

cmrwt .+r fiirmer ' p$r+n&r, d + e ~ ~ r , of- ficer, st&ktioldsr, marnher, employee, or in~dperi&m'.':wiit~a~tor, except :Claims arising out of ' sd i affomey-client reletion-

G EXCLUSIONS ship between . . . . you and your current or forher partner, direator. officer. ;stock-

:This insurance does not apply to-: hold*. member, employee or mdependent contractor, This policy does not apply to any claim by ati Insured 'against 'hother

: 1. Your actsr. errors or omiasions while ect- lowred ing in the capacity of:

, a. 8 [iecurWas, real estate or insurance broker, agent deeler or trader;

: i b. an investment advisor or accomtant;

0. a fiduc~ary under the Employee Retire- ment Income Security Act of 1974 and its amendments. This exclus~on does not apply if you are deemed to be a fiduciary solely by reason o f legal advice rendered with respect to an employee benefi plen;

5. Any Claim arising out of your notarized certlflcation or ecknowledgement of a signature without the physical appearance before you of the person who is or claims to be the person so signing

6. Any Claim arising out of acts. errors, omissions or Personal lnjurles which oc- curred prior to the effecbve date of this policy if, on or prior to such date, you knew or had a reasonable basis to balleve either tA6t s professional duty had been breached or Uut a Claim would be made.

CG 80 42 i~d Q3f97) xs (Page 3 of 7) - -

SENT BY: GREAT AMERICAN I N S CO; 71 380661 41 ; OCT-31-01 12:27PM; I'AUt 9 / t!

1 7. Any Clelm arlslng our o f any crimlnal, : : dishonest intentionali fraudulent Or me-

lialous act, error, or omlsslwr: however, we will provide for. the defense of Claims alleging Personal Injury arising

: : out of your performance of Professional Servio~s. This exclusion will not apply to any Insured who did not personally par- ticipate in or acquiesce to the committing of such act, error, or omission; had no

: knowledge Or reason t6 believe' such an , act, error, lor omission was being commit- : ted, did not remain pakslve after learning : of the act, error or omission, and who ! immediately notified us afbr obtaining . . T ~ersonal knowledae of such act. error or

a report it immediately to us in :writing, giving us all details including the spe- cific act, error or omission; the injury or damage which has or may rwlt from such act, error or omisdon: the circumstances by which you first be- came awere of the act, error m omis- aion; and, the names, addredes and telephone numbers of ell persons who may have knowledge or relevant in- formation;

b. preserve all dacunents end other forms of evidence relating to the Claim or Early Reported Incident;

An$ claim alleging that you are liable for ti+ cost gf sc+ijii,, alieged or threatened

end hearings and trials i f re4uested

f. assist in '&curing and giving evidence

You &st not;

0) halri, , h y offer of settlement or payments;

10. Any CIalm arising out of the diminution of . . ; the valw of any asset in your care, a s - tddy or control, or out of the misappro-

j priation ofLor failure to give an account of i any as$et in your m e , cktody; or con- : trol, including the commingling o f client

, . funds.

'It. Any Claim asserted against y w as the . . i beneficiary or distributes of a trust or

estate,

H. ADDITIONAL TERMS AND CONDITIONS

1. Claim or Ineldent Reporting Requite- ments

If you become aware of a Claim or w~sh to report en Eerly Reported Incldent, y w must

W admit liability;

(3) incur any expense; or

(4) assume any obligaticrn

arising out of or in any way connected with a Claim without wr written con- sent

2. Automatlo Extsnded Claims Roponing Period

This policy will also provide coverage for Claims made against you during the Poll- ciy Perlod and which you report to us in writing within thirty (30) days following the expiration of this policy, provided tha: the following conditions have been met

(Page 4 of 7)

SENT BY: GREAT AMERICAN I N S CO;

a. the Clelrn was reported to us no later not exceed the highest applicable Limit of than thirty 130) days from the date the Liability which remains available to pay Clalrn was first made against you; Clsims under any one policy.

b. prior to cancellation, nonrenewal or 6. Subrogatlon exp~ration of this policy, you were in compliance with all the terms and con- In the event of any payment pursuant to ditions of this policy, ~ncluding pay- this policy, we shall be subrogated to the rnent of ell premiums and deductible5 extent of such payment to all of the rights when due; of tl'm Inswad to recovery thereof, and

the Insured shall execute all oaoers re-

a. your license or right to practice law quired 8xl shall do evaryrhing %t may be

has not been revoked, suspended. or necessary to preserve, secure and pursue

surrendered: and such rights, including the executron of such documents as mav be necessarv to

d. you made no material misrepresenta- enable us to bring suit in me name o f the

ti& in obtaini i the coverage provided Insured. The In

i;y mi$ policy.

Other Insurance its territories or possessions, or Canada

This poiidy is e~bess bver any other in- surance, whether 'collectible or not, avail- able to en Insured and applicable to a

I Claim, whethei such other insurance is , :

I stated to b e primary, pro rat., contribu- ; tory. exce'ss, conting,ent pr otherwise. This : provision will not apply to other insurance

written specifically as excess of this poli- ; .; cy's limik. , . . ,

i If L o or: more policiea of insurance is- : sued ,by us pravidp .coverage to an In- : sured for the same Claim or Claims. the

maximum amount we ere oblig8ted to pay i per dsim :,and in the aggregste on behalf

:: of the Insured under all such policies shall

9. Integration

By acceptance of this policy. you ac-,. knowledge and agree that

e. the representations contained in the spplicetion for this policy, including all supplements, etiachmnts and replies to undsrwriters' inquiries. are true, correct and complete:

b. this policy was issued in reliance upon your Applicetion; and

c. your Application. the Declaretions, the policy wd endorsemants form the complete agreement between you and us.

tG 80 42 (Ed. 03/97) XS (Page 5 of 71

SENT BY: GREAT AMERICAN INS CO; 71 38866141 3 U L I - ~ 1 . ~ 1 I C : L ( I T I ~ ~ ruuc I 1 0

Changes to the Polloy b. Named Insured Optlon 'The additional premium required to purchase an Ex- -

This policy can only be changed by our tended Claims Reporting Endorsement issuing en endorsement or substitute Dec- on behalf of the Named Insured shall larations be calculated as follows:

Extendnd Claims Reporting Optlons b) Ona hundr.ed percent (100%) of

a. Extended Claims Reporting Endorse- ment If you or WE cancel or do not renew this oolicv. YOU mav have the

the Named Insured's last annual premium for a one-year sx- tended reporting period;

option to p&chase &I ~xterided Claims (z) One hundred eighty-five percent Reporting Endorsement that would ex- tend the period of time during which

I1 85%) of the Named lnsurebs last annual premium for a three-

you may report Claims under this year extended reporting period; policy. The &tended Claims Reporting Endorsement'is subject to this policy's terms and conditions and applies only to Clalrns arising out of Professionnl Services rendered prior to the ex- piratldn or tsmination of this policy. The Extehded Claims Reporting En- d&&nent will not extend me Pollcy

unlimited ex-

conditioried on me follo&g

Reporting Endorsement Is one (1) the Insured is at least fifty-five hundred percent (100%) earned 155) years of age at ihe time of upon receipt and nonrefundable; retirement

(8) your license or right to practice law has not barn rsvoked, sus- pended or surrendered; and

(41 you made no material misrepre- sentation in obtaining the cover- age provided by thispolicy.

If you have complied with the above requirements, you have the option to pw chase an Extended Claims Report- ing Endorsement You must exercise this option and pay the add~tronal pre- mium wltliln Chirry (30) days following the cancellation, nonrenewal or expi- rabon of this policy

(2) the Insured was employed by the Named Insured during me Policy Period and had been insured by us for five or more consecutive Policy Periods:

(3) the lnsured notifies us of his or her retirement and requests the issuance of an Extended Claims Reporting Endorsement within thirty (30) days following the cancellation. nonrenewal or expi- ration of this policy; cad

(4) the conditions described above :n Subsection 11.a have been met

CG 80 42 (Ed 03/97) XS .- - (Page 6 of 7 )

SENT BY: GREAT AMERICAN I N S CO; 71 38966141 ; UCI-31 - ~ l 1 a : z r r ~ ; PAUL: 0 1 0

d. lndivldual Death or Parmensnt Dls- ~ b l i l t y Optlon. Any lawyer who quali- fies as an Insured and who dies or becomes permanently disabled, shall be entitled to an Extended Claims Re- porting Endorsement with an unlimited reporting period at no additional pre- mium Such Insured's right to the is- suance of en Extended Claims Report- ing Endorsement is conditioned on the following

days following the cancellation. nonrenewal or expiration of this policy; and

(5) the conditions described above in Subsection H"a, have been met

12. Cancellation

Either y w or we can cancel this policy by notifying the other in writing.

(11 ~e Insured was employed by the If you cancel, the return premium' will be

Named Insured during the Polley calculated using a customary short rate

Period and suffered death or penalty or ten percent (10%) of the es-

disability during the Policy Period; timated premium for the remeinder of the

(2) in the event of disability, the In- sured is totally end continuously disabled from the practice of law a minimum of six months prior to the election of this option;

. Our failwe to insist on sb-ict compliance with eny of the terms. provisions, or con- ditions to coverage or the failure to ex- ercise any ri* or privilege shall not op- erate or be construed as e waiver of any provisions, conditions, privileges or rights

In Witness Whereof, we have caused thls pollcy to be executed and attested, and. if required by state law. this policy shall not be valid unless countersigned by our authorized representative

EG 80 42 (Ed. 031971 XS

8

President

(Page 7 of 7)

GREAT AMEMCAN INSURANCE COMPANIES

PROFESSIONAL LIABILITY

,ENT BY: GREAT AMERICAN I N S CO;

GREAT AMERlC4N INSURANCE COMPANIES@ +U~~;O~DII .S of Amer1c.n Flnsnslel Corwr.tlon

, 580 WALNUT STREKT. CINCINNATI. OHIO 415201

LEGAL P~O~~SS~ONAI. LIABILITY CLAAVIS-MAE FORM

A. DEFINITIONS

Whenever used in this policy, the term

6. Our, Us, We means the insurance company whose n ' h appears on the Declarations of this policy.

:. : 1. Claim mebns any demand received by you I ) 7. PMSOMI Injtizy means

for money or services (0). ,kising out of your acts, errors or missions in provid- a false arrest detention or imprison-, ing Profasalonal Services; or b) for ment Peisoi i~ l l n l u ~ dslna out of vour ~ e r - a

b. w r o n m r of right of pri

penses -m you. or your is terminated earher, in which event the m~lovees ~olicv oer~od shall end on the date of such , . u- earser ierm'&tion . . .

, . 1 Domagers a monetary judgment. monetary eward or monetary settlement 9. Prodecesslv Flrm means any k w $irk to

i which you we legally obligated to pay, but , . whose financial assets and liabilities the does not include punitive or exemplary Nomod l'nswed is the majority successor

i damages, fines, pehalties, court imposed in interest w d which you 'designate as a : monetary s~nctions, or return or restitu- Predacao~or Flnn in yow appliqation for

I , tion of legal fees, 'costs and expenses. this coverage.

4. Esrly Ropocted inuidont means an act, 10. Profosslonel Sarvicos means services error, or omission in providing Profes- you perform for a client in your capacity rsional Services which is not Wwd subject BS: of a written demand received by you for money or services and which IS reported a a lawyer, to us in writing during the Policy Period in accordance with Section fC, No 1. b. a mediator or arbitrator, (Claim or Incident Reporting Requ~rements) of thts policy u. a notary public; or

. 5 Named insured means the pwhon or en- d. as an admiiisb-ator, conservet~r, ex- tity designated in the Declarations as the eCUtOr. gwrdian, bustse, receiver, or Named Inswed in any similar f~duciary capacity. pro-

CG 80 42 (Ed 03/97) XS (Page 1 of 7)

SENT BY: GREAT AMERICAN I N S CO; 71 38966141 ; OCi-31-01 12:28I'M; I 'At i t 3 / M

vided that such services are connected any Clam settlement we propose to make, with and incidental to your profession you must take full resporisibility for, and pay as a lawyer for, fwther defense and settlement of the

Clelm. Ow obligation to you for a Claim 11. You, Your or Insured means' settlement we propose to make but to wh~ch

you object will be llm~ted to the amount of a. the Named Insured ffl~d any Prede- the Claim settlement we propose to make

csssor Firm: and the Clalm Ex~enses lncurred bv us through the time we receive your dti$ction

; b. any past or present partner. principal, to the proposed settlement shareholder; member, officer, director, "of counsel;' or employed lawyer of We welcome your input in selecting defense the Named insved w a Prcsdecesrior counsel; however we retain the exclusive right Firm, but only while rendering Profes- to make that selection

. . . . sional Servloes in the course and scope' of his or her duties on the be- half of the Named lnniured or a Re- D. DEFENSE OF DISCIPLfNARY

decessor Firm:

c. any past or present nonlawyer ern-

Insured or a Predeoessor.

E. SUPWMEWAAY PAYMENTS

We will reimburse you for actual loss of earnings and reasonable expenses incurred at our request for attendance at =:id or coun- ordered hearing, arbittation or mediation Our obligation to reimburse you under this Sup-

C. DEFENSE AND SETTLEMENT

We will provide for the defense of Claims :'against you seeking Damages that are covered '.by this policy even if the allegations against

you are groundless, false, or fraudulent When I r e have paid our Limits of Liability. our ob- .:ligation to defend you ends. We have no right or duty to defend Claims seeking Damegee not covered by this policy.

We will not settle any Claim without your consent However, you must communicate to us, wlthln a reasonable period of time, your consent or objection to any Claim settlement which we propose to make If you object to

plementary Payments provision is limited to 9250 per day, 85,000 per Ctalm, and $20.000 in the aggregate There win be no deductible for payments made under thrs pro- vision, and any such payments will not reduce me L~mits of Llabil~ty available to pay Claim Expensas or Damages.

F. LIMITS OF LIABILITY AND DEDUCTIELE

1. For each Clelm, the limit shown in the Declarations as Per Claim is the maximum amount we are obligated to pay for the combined total of all covered Damages and Clalm Expenses arising out of or in connection with the same or related acts.

CG 80 42 (Ed. 03/97) XS (Page 2 of 71

SENT BY: GREAT AMERICAN I N S CO;

: errws, or omissions This limitation applies : , regardless of the number of persons : covered by this policy.

: 2. Subject to the Pu Claim limitation above, the maximum amount WE 8r.e obligated to

: pay for the combined total of all covered : Damsges and Claim Expensas arising out

of any and all Claims will not exceed the , amount shown in the Declarations as Ag-

gregate.

3. Cisim Expamsos wa pay reduce the Limits of Liability available to pay Dmagos.

4 From the mount of Damssee and CIalms E x r w n ~ s a we Dav. we will subtract

PAGE 418

d. a public officlal or an employee of a g o u m r r t a l or quasi-governmental body, subdivision or agency: or

a. a real estate title insurance agent or reel estate title abstractor, unless the Title Agent Endorsement has been added to this policy

2 Bodily injury, sickness, disease, disability. d is f . igu~ent or death; injury to or destruction of any tangible .property, in- clu&ing the loss of use thereof. ;

. . 3. Any ~ l . i m mad6 by or aghiriii any busi-

ness enteqirine not nsmod '@I the Doo- ierarlons: '. a, i'

for<+ claim Mar: mat first an Emly R6-d incidqnt during the policy peria:$,;50% o f the ati6unt specified in , .

. .

*' Al;y C,:;i;+ s,$lii., yo" brbugnt by your 6,. *her' $&,&, of-

ficer, sttjcktioldar, member, qnployee, or inireperi&~.':~ritraetor~ except :Claims arising out of 'ipiatfomey -client relation.-

G 'EXCLUSIONS ship between you and yo? current or foriner 'partner, dirktor. officer. - stock-,

:This insurance. does not apply to: holder. mernbrjr, employee or independent contractor. This policy does not apply to my claim by an' Inaur~d 'against 'another

: 1. Your acts, errors or omissions while act- Inwred ing in the capacity of:

5. Any Clalm arlsing om o f your notarized a. a securities, real eetate or insurance certltrcation or acknowledgement of a

broker, agent, dealer or trader; s~gnature without the phys~cal appearance before you of the person who 1s or

b. an investment advisor or accountant, claims to be the person so signlng

c. a fiduc~rsy under the Employee Retire- 6. Any Claim arising out of acts. errors. meot hcome Security Act of 1974 omissions or Parsons1 lnjurles which oc- and its amandments This exclusion curred prior to the effectwe date of th~s does not apply if you we deemed to policy if, on or prior to such date, you be a fiduciary solely by reason of legel knew or had a reasonable basis t o belleve advice rendered with respect to an either that e professional duty had been employee benefit plan; breached or that a Claim would be made.

CG 80 42 (Ed 03/97] xs (Page 3 of 7) - -

SENT BY: GREAT AMERICAN I N S CO; 71 389661 41 ; O C T - 3 1 - 0 1 12:27PM; t'AUt 3 / u

Any Clalm arising our o f any crlmlnal. dishonest intentional, fraudulent or me- llolous act, error, or ornlsslan: however, we will provide for the defense of Claims alleging Personal Injury arising out of your performance of Professional Serviaas. This exclusion will not apply to any Insured who did not personally par- ticipate in or' acquiesce to the committing of such &t. error, or omission; had no knowledge Or reason ti, believe' such an act, error, Lor omission W8S being commit- ted, did not remain passive after. learning of the act. error or omission, and who immediately notified us after obtaining person.al knowlddge of such act error or omission.

a. report it immediately to us inlwriting. giving us all details including the spe- cific act, error or omission: the injury or. damage which has or may result from wch act, error or omisdon: the circumstanaes by which you first be- came aware of the act error at omis- sion; and. the names, addresses and telephone numbers of. all persons who may have knowledge or relevant in- formation;

b. presanre all docunents: md other. forms of evidence relating : to the Claim or Early Reported Incident;

c orornotlv send =.all & h e n & relat-,

' 1 8. Any ~ l a l t i alleging that you are liable for the cast of aditjab, alleged or threatened

end hearings end trials i f ret)uested

f. assist in 'securing snd giving evidence

You i k s t not;

0) , ~ y offer of settlement or payments;

. . . . lo. Any Clalm arising out of the diminution of , . * .. : the valw of any asset in your Care. cus- i tody or control, or out of the misappro- : priation oflor failure to give an eccount of : any as$et in your care, cktody; or con-

Wol, including the commingling of client

, . funds.

'11. Any Claim asserted against y w as the . . : b5neficiar.y or distributee of a trust or.

estate

H. ADDITIONAL TERMS AND CONDITIONS

: 1. Claim or ' lneldent Reporting Require- ments

: If y w become aware of a Claim or wish ::: to report an Early Reported Incident, yW i must

W admk liability;

(3) incur any expense; or

(4) assume any obligation

arising out of or in any way connected with a Claim without w r written con- sent

2. Automatic Extended Claims Reporting Poriod

This policy will also provide coverage for Clalms made against you during the Poll- oy Perlod and which you report to us in writing within thirty (30) days followrng the expiration of this policy, provided ltia: the following conditions have been met

CG 80 42 (Ed 031971 XS . .-

(Page 4 of 7)

SENT BY: GREAT AMERICAN INS CO;

a. the Clalm was reported to us no later not exceed the highest appl~cable Limit of than thirty (30) days from the date the Liability which remains available to pay Claim was first made against you; Claims under any one policy.

b. prior to cancellstion, nonrenewal or 6. Subrogatlon expiration of this policy, you were in compliance with all the terms and con- In the event of any payment pursuant to ditions af this pollcy, ~ncluding pay- this policy, we shell be subrogated to the ment o f all premiums a n d deductible5 extent of such payment to all of the rights ...* -... A,.-. of the Insured to racoverv thereof. and ""IIPI, ""Cl,

the Insured shall execute a11 ~ a ~ e r i re-

a. your license or right to practice law quired and shall do everything &t may be

has not been revoked. suspended. or necessary to preserve, secure end pursue

surrendered: and such rights, including the execmon of such documents as mey be necessary to

d. you made no material misrepresenta- enable us to bring suit in the name o f the

tlon in obtaining the coverage provided Inarrsd. The In ... by this policy,

possesdons;, or Canada Wa my, at our option, "elee at ariy time to investigate, settle M defend Cliims brouaht anwhere -

Other Insurance

This Is excess over any other in- surance, whether collectible or not, avail-

; able to en Insured and applicable to a Cleim, whethe? such other insurance is

; stated to b e primary, pro rata, eontribu- 1 tory. exce'm, conrjngent or otherwise. This

provision will not apply to other insurenca written specifically as excess of this poli-

; j cy's limit& . . .

: : If two or more policies of insurance is-

: sued.by us provido coverage to an In- : sured For the same CLnim or Clafms, the

maximum amount w e ere obligared to pay i per daim,,and in the aggregete on behalf ; of the I n w e d under all such policies shell ,;

olher than the United states-of ~inrxica, its territories or possessions, or Canada

@. Integration

By acceptance of this policy, you ac-,. knowledge and agree that

a. the representations contained in the application for this policy, including all wpplemants, attachments and replies to underwtters' inquiries, are true, correct and complete:

b. mis policy was issued in reliance upon your Applicution; end

6. your Application, the Declarations, the policy and endorsements form the complete agreement between you and us.

CG 80 42 Ed 03/97) XS (Page 5 of 71

SENT BY: GREAT AMERICAN I N S CO; 7138YSB141 ; U ~ I - ~ i - u i 1 ~ : ~ o r m ; ~ A U C I / O

10. Changes ro the Pollcy

This policy can only be changed by our issulng an endorsement or substitute Dec- larations

11. Extendad Claims Reporting Options

a. Extended Clalms Reporting Endorsa- rnent. If you or WP cancel or do not renew this pol~cy, you may have the option to purchase an Extended Clrums Reporting Endorsement that would ex- tend me period of time during which you may report Claims under this ~ o l ~ c v . ?he Extended Claims Reporting

b. Named Insured Optlon The additional premium required to purchase an Ex- tended Claims Reporting Endorsement on behalf of the Namad Insured shall be calculated as follows:

h) One hundred percent (100%) of the Named insured's last annual premiurn for a one-year ex- tended reporting period;

(2) One hundred eighty-five percent (185%1 of the Named Insured's last annual premium for a wee- year extended reporting period;

~ndo&ement'is subject to this policy's terms and conditions and applies only to Clalms arising out of P~ofassional Serviocs riaderad prior to the ex- piration or tomtination of this policy. The Extdhded Claims Reporting En- dorshent will not extend me Polloy Portob. ured's laft annual

an unlimited ex-

retirement from the practice: of law, anylawyer who qualifies as an Insured shall be entitled to an Extended Claims Reporting Etidorsement with2* unlim- ited raporting period at no additional premium. An Insured's right tb the in- surance of s i l l an endorsdment is condltiorisd on the following '

Reporting Endorsement is one (1) the Insured is at least fifty-five hundred percent (1 00%) earned 155) years of age at the time of upon receipt and nonrefundsble; retirement

(8) your license or right to practice (2) the Insured was employdd by the law has not bwn revoked, sus- Nomad lnaured during 'the Policy pended or surrendered; and Period and had been insured by

us for five or more consecutive (4) you made no material misrepre- Policy Periods:

aenfstion in obtaining the cover- age prwlded by this policy. (3) the Insured notifies us o f his or

her- retirement and requests the If you have complied with the above issuance of an Extended Claims requirements, you have the option to Reporting Endorsement within purchase an Extended Claims Report- thirty (301 days following the ing Endorsement You must exercise cancellation, nonronewal or enpi- this option end pay the additional pre- ration of this policy; and mium Fwlthln thiny (30) days following the cancellation, nonrenewal or expi- (4) the conditions described '@hove in ration of this policy. Subsection 11.8, have been met

CG 80 42 (Ed 031971 XS .- - (Page 6 of 7)

d. Individual Death or Psrmanont Dfa- ability Optlon. Any lawyer who quali- fies es an Insured and who dies or becomes permanently disebled, shall be entitled to an Extended Claims Re- porting Endorsement with an unlimited reporting period at no additional pre- mium Such Insured's right to the Is- suance of an Extended Claims Report- ing Endorsement is conditioned on the following;

days following the cancellation. nonrenewal or expiration o f this policy; and

(5) the conditions described above in Subsection 11.9. have been met

12. Cancellation

Either you or we can cancel this policy by notifying the other in writing

(1) the insured was employed by the If you cancel, the return premium will be

Named Insured during the Pollcy calculated using a customary short rate

Pcriod and suffered death or penalty or ten percent (10%) of the es-

disability during the Policy Period; tirnated premium for the remainder of the

(2) in The event of disebility, the in- sured is totally and contlnuwsly disabled from the practice of law a minimwn of six months prior to the election of this option;

(3) satisfactory written evidence

. Our failure to insist on strict compliance with any of the terms. provisions, or con- ditions to coverage or the failure ,to ex- ercise any ri@ or privilege shall not op- erate or be construed as a waiverof any provisions. conditions, privileges or rights

In Wltnsss Whereof, we have mused mls poIIcy to be executed and attested. and, if required by state law. this policy shall not be valid unless comersigned by our authorized representative.

Presidant

(Page 7 of 7 )

CHUBB PRO LAWYERS PROFESSIONAL LIABILITY

CHUB6 PRO LAWYERS PROFESSIONAL LIABILITY

In consideration of payment of the premium and subject to the Declarations, limitations, conditions, provisions and other terms of this Policy, the Company and the lnsured agree as follows:

I. INSURING CLAUSE

The Company shall pay Loss on behalf of an lnsured on account of any Claim first made against such lnsured during the Policy Period or, if exercised, during the Extended Reporting Period, for a Wrongful Act committed by the lnsured before or during the Policy Period

11. DEFINITIONS

Application means all signed applications, including attachments and other materials submitted therewith or referenced or incorporated therein, submitted by or on behalf of the lnsured to the Company for this Policy or for any policy of which this Policy is a direct or indirect renewal or replacement All such applications, attachments and materials are deemed attached to, incorporated into and made a part of this Policy

Claim means:

(1) any of the following:

(d) a formal civil administrative or civil regulatory proceedins (includins a disciplinary or grievance proceeding before a court or bar association)commenc~d by thk filing of a notice of charges or similar document or by the entry of a formal order of investigation or similar document.

against an lnsured for a Wrongful Act, including any appeal therefrom; or

(2) a written request received by an lnsured to toll or waive a statute of limitations relating to a potential Claim described in paragraph (1) above

Except as may otherwise be provided in Section X Reporting, a Claim will be deemed to have been first made when such Claim is commenced as set forth in this definition (or, in the case of a written demand or written request, including but not limited to a demand for arbitration, when such demand or request is first received by an lnsured).

Controlled Enterprise means any business enterprise (other than an lnsured or a business enterprise in which the ownership. control, operation or manasement bv the lnsured is exclusivelv in a fiduciary capacitv as an administrator: ionsewitdr, executor, trustee, guardian, receiver or committee br in any simiiar '

fiduciary capacity incidental to the practice of law by an lnsured) if at the time the Wrongful Act occurs:

(1) such business enterprise is a publicly traded entity and five percent (5%) or more of its issued and outstanding securities or voting rights to elect or appoint a board of directors or an equivalent governing body is owned or controlled, individually or collectively, by the Firm or by one or more lnsured Persons;

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(2) such business enterprise is not a publicly traded entity and twenty-five percent (25%) or more of the legal andlor equitable ownership of such enterprise is owned or controlled, individually or collectively, by the Firm or by one or more lnsured Persons; or

(3) such business enterprise is coritrolled, operated or managed by the Firm or by one or more lnsured Persons.

Defense Costs means that part of Loss consisting of reasonable costs, charges, fees (including attorneys' fees and experts' fees) and expenses (other than regular or overtime wages, salaries, fees, overhead or benefits of any lnsured) incurred in defending any Claim and the premium for appeal, attachment or similar bonds; provided that the Company will have no obligation to procure or provide any bonds.

Domestic Partner means any natural person qualifying as a domestic partner under the provisions of any applicable federal, state or local law or under the provisions of any formal program established by the Firm,.

Financial lmpainnent means the status of a Firm resulting from:

(1) the appointment by any state or federal official, agency or court of any receiver, conservator, liquidator, trustee, rehabilitator or similar official to take control of, supervise, manage or liquidate the Firm; or

(2) the Firm becoming a debtor in possession under the United States bankmptcy law or the equivalent of a debtor in possession under the law of any other country

Firm means the organization(s) Declarations, whether as a part lim~ted lia Declaratio

lnsured means the Firm arid any lnsured Person

lnsured Person means any natural person or entity:

(1) who was, now is or shall become a partner, principal, director, officer, shareholder or member of the Firm;

(2) who was, now is or shall become designated (as evidenced in the Firm's records) as "counsel" or "of counsel" by the Firm; or

(3) whose labor or service is engaged by and directed by the Firm to perform Professional Services, including full time, part-time, seasonal, contracted, leased and temporary employees, or volunteers,

but only while acting in his, her or its capacity as such

lntra Firm Representation means Professional Services provided with the prior written consent of the Firm by an lnsured Person to any other:

(1) lnsured Person or his or her estate in connection with estate planning matters, estate administration, trust administration or probate proceedings; or

(2) lnsured Person in connection with house or apartment closings, personal bankruptcies, incorporation of family businesses or personal injury litigation

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Loss means the amount that an lnsured becomes legally obligated to pay as a result of any covered Claim, including but not limited to damages (including punitive or exemplary damages if and to the extent that such punitive or exemplary damages are insurable under the law of the jurisdiction most favorable to the insurability of such damages, provided such jurisdiction has a substantial relationship to the relevant Insured, to the Company, or to the Claim giving rise to the damages), judgments, settlements, pre- judgment and post-judgment interest and Defense Costs Loss does not include:

(1) any costs incurred by an lnsured to comply with any order for injunctive or other non-monetary relief, or to comply with an agreement to provide such relief;

(2) any amount incurred by an lnsured in the defense or investigation of any action, proceeding. demand or request that is not then a Claim even if such matter subsequently gives rise to a Claim;

(3) taxes, fines, penalties (except as provided above with respect to punitive or exemplary damages), liquidated damages or the multiple portion of any multiplied damage award;

(4) the cost of correcting, re-performing or completing any Professional Services or any amount which constitutes restitution, reduction, disgorgement, or set off or return of any fees or expenses paid to or charged by an lnsured for Professional Services; or

(5) any amount not insurable under the law pursuant to which this Policy is construed

Personal Injury means libel, slander, disparagement, violation of rights of privacy, false arrest, detention or imprisonment, wrongful entry or eviction, malicious prosecution or abuse of process

substances issued by the United States Environmental Protection Agency or any state, county, rnuniclpallty or locality counterpart thereof Such substances shall include, without lirnitatlon, solid, liquid, gaseous or thermal irritants, contaminants, smoke, vapor, soot, fumes, acids, alkalis, chemicals or waste materials Pollutants shall also include any air emisston, odor, wastewater, oil or oil products, infectious or medical waste, asbestos or asbestos products and any noise

Pollution means the actual, alleged or threatened exposure to, or generation, storage, transportation, discharge, emission, release, dispersal, escape, treatment, removal or disposal of Pollutants or any request, demand, order or regulatory or statutory requirement that any lnsured or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of any Pollutants, or any voluntary decision to do so

Professional Services means services provided to others by an lnsured as:

(1) an attorney or notary public;

(2) an administrator, conservator, executor, trustee, guardian, escrow agent, receiver or committee or in any similar fiduciary capacity incidental to the practice of law by the Firm;

(3) an arbitrator or mediator;

(4) a member, director or officer of any non-profit professional legal association, its governing board, or any of its committees;

(5) a government affairs advisor or lobbyist;

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(6) a title insurance agent pursuant to a written agency agreement with a licensed title insurance company, but only when acting in such capacity for real estate transactions for which an lnsured has provided services as an attorney; or

(7) a paralegal or legal assistant, solely in connection with the performance of Professional Services by an lnsured,

but only if such services are performed in the name of or on behalf of the Firm and some or all of the fee, if any, accruing from such services (regardless of whether such fee is actually collected) inures to the benefit of the Firm. Professional Services shall not include the provision of any financial or investment advice.

Related Claims means all Claims based upon, arising from, or in consequence of the same or related facts, circumstances, situations, transactions or events or the same or related series of facts, circumstances, situations, transactions or events

Wrongful Act means any actual or alleged act, error or omission committed, attempted, or allegedly committed or attempted, solely in the performance of or failure to perform Professional Services by the Firm or by an lnsured Person acting in his or her capacity as such on behalf of the Firm

Ill. EXCLUSIONS

(A) The Company shall not be liable for Loss on account of any Claim:

transaction, event or Wrongful Act occurring prior to the inception date of the first lawyers professional liability policy issued to the Firm by the Company which, prior to such inception date, any lnsured knew or should have known might give rise to a Claim;

(3) based upon, arising from, or in consequence of any demand, suit or other proceeding pending against, or order, decree or judgment entered for or against any lnsured, on or prior to the Pending or Prior Date set forth in ITEM 7 of the Declarations, or the same or substantially the same fact, circumstance, situation, transaction, event or Wrongful Act underlying or alleged therein;

(4) based upon, arising from, or in consequence of Pollution; provided that this exclusion shall only apply where the lnsured is an actual or alleged owner, lessee or operator of the property in question;

(5) for bodily injury, mental anguish, emotional distress (except mental anguish and emotional distress resulting from Personal Injury), sickness, disease or death of any person or damage to, destruction of or loss of use of any property (including sofiware, data or other information that is in electronic form), whether or not it is damaged or destroyed; provided that this Exclusion shall not apply to any Claim directly arising out of Professional Services performed as a guardian, conservator or committee of any person or property;

(6) for any actual or alleged violation by an lnsured of the responsibilities, obligations or duties imposed on fiduciaries by the Employee Retirement Income Security Act of 1974, or any amendments thereto, or any rules or regulations promulgated thereunder, or any similar provisions of any federal, state, or local statutory law or common law anywhere in the world;

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(7) by or on behalf of, in the name or right of, or based upon, arising from or in consequence of any Wrongful Act on the part of any lnsured in connection with any Controlled Enterprise;

(8) based upon, arising from, or in consequence of the service of any lnsured Person in his or her capacity as a partner, member, principal, director, officer, shareholder, counsel, of counsel, or employee of any entity other than the Firm; provided that this Exclusion shall not apply where the lnsured Person is acting in his or her capacity as a member, director or officer of any non-profit professional legal association, its governing board, or any of its committees with the consent of the Firm;

(9) brought or maintained by or on behalf of any lnsured in any capacity, other than as a client in connection with lntra Firm Representation;

(10) for any actual or alleged infringement of any certification mark, copyright, patent or trademark (including collective or service marks), trade secret, trade name, trade dress, misappropriation of ideas or other intellectual property by an lnsured; or

( 1 1) based upon, arising from, or in consequence of Professional Services performed as a title insurance agent where there allegedly exists:

(a) any defect in title of which any lnsured had actual knowledge as of the date the title insurance policy was issued by or through any lnsured; or

In fact any protit,

(2) based upon, arising from or in consequence of any deliberately fraudulent or dishonest act or omission or any willful violation of any statute or regulation by such lnsured, or any libel or slander committed by such lnsured with knowledge of its falsity.

as evidenced by (i) any written statement or written document by any lnsured or (ii) any judgment or ruling in any judicial, administrative or alternative dispute resolr~tion proceeding

IV. SPOIJSES, ESTATES AND LEGAL REPRESENTATIVES

Coverage shall extend to Claims for the Wrongful Acts of an lnsured Person made against:

(a) the lawful spouse or Domestic Partner of such insured Person, if named as a co-defendant with such lnsured Person solely by reason of such person's status as a spouse or Domestic Partner, or such spouse or Domestic Partner's ownership interest in property that is sought by a claimant as recovery for an alleged Wrongful Act of such lnsured Person; and

(b) the estate, heirs, legal representatives or assigns of such lnsured Person if such lnsured Person is deceased or the legal representatives or assigns of such lnsured Person if such lnsured Person is incompetent, insolvent or bankrupt

All terms and conditions of this Policy including, without limitation, the Retention Amount applicable to Loss incurred by the lnsured Person, shall also apply to Loss incurred by the lnsured Person's spouse, Domestic Partner, estate, heirs, legal representatives or assigns. The coverage provided by this Section IV. shall not apply with respect to any loss arising from an act or omission by an lnsured Person's estate. heirs, legal representatives, assigns, spouse or Domestic Partner,

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V. OTHER INSURANCE

This Policy shall be specifically excess over, and shall not contribute with, any other valid and collectible insurance, whether such other insurance is stated to be primary, contributory, excess (except insurance specifically in excess of this Policy), contingent or otherwise This Policy will not be subject to the terms of any other insurance

VI. TERRITORY

Coverage shall extend anywhere in the world.

VII. EXTENDED REPORTING PERIOD

(A) If the Company or the Firm terminates or does not renew this Policy, other than termination by the Company for nonpayment of premium, then the Firm shall have the right to purchase an Extended Reporting Period for either the twelve (12) month period, twenty-four (24) month period or thirty-six (36) month period beginning on the effective date of the termination or non-renewal of this Policy This right to purchase an Extended Reporting Period shall lapse unless written notice of election to purchase the Extended Reporting Period, together with payment of the additional premium due, as

reported in accordarice with Section X. Reporting, but only for Wrongful Acts committed or allegedly committed before ttie effective date of termination or norirenewal or the date of any event described in Section XIII(B) Changes in Exposure, whichever is earlier The entire additional premium for the Extended Reporting Period shall be deemed fully earned at the inception of such Extended Reporting Period. Any Claim made during the Extended Reporting Period shall be deemed to have been made during the immediately preceding Policy Period The Limit of Liability for the Extended Reporting Period stiall be part of and not in addition to the applicable Limits of Liability for the immediately preceding Policy Period,

VIII. LIMIT OF LIABILITY

(A) The Company's maximum liability for all Loss from each Claim first made during ttie Policy Period shall not exceed the each Claim Limit of Liability set forth in ITEM 4(A) of the Declarations. which amount shall be part of arid not in addition to the amounts stated in ITEMS 4(B) and 4(C) of the Declarations

(6) The Company's maximum aggregate liability for all disciplinary and grievance proceedings against all Insureds shall not exceed the disciplinary and grievance proceedings Limit of Liability set forth in ITEM 4(B) of the Declarations, which amount shall be part of and not in addition to ttie amount stated in ITEM 4(C) of the Declarations.

(C) The Company's maximum aggregate liability for all Loss from all Claims first made during the Policy Period shall not exceed the aggregate limit of liability set forth in ITEM 4(C) of the Declarations, regardless of the number of Claims

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(D) Defense Costs are part of and not in addition to the Limits of Liability set forth in ITEM 4 of the Declarations, and payment by the Company of Defense Costs shall reduce and may exhaust such Limits of Liability

IX. RETENTION AMOUNT

The Company's liability under this Policy shall apply only to that part of covered Loss on account of each Claim (other than a disciplinary or grievance proceeding) which is excess of the applicable Retention Amount set forth in ITEM 5 of the Declarations Such Retention Amount shall be depleted only by Loss otherwise covered under this Policy and shall be borne by the lnsured uninsured and at their own risk In the event that any lnsured Penon is unwilling or unable to bear the Retention Amount it shall be the obligation of the Firm to bear such Retention Amount uninsured and at its own risk. No Retention Amount shall be applicable to a disciplinary or grievance proceeding.

X. REPORTING

(A) Reporting o f Claims and Wrongful Acts:

(1) If a Claim is made against any lnsured, the lnsured shall, as a condition precedent to exercising any right to coverage under this Policy, give to the Company written notice of such Claim as soon as practicable, but in no event later than the earliest of the followino

i this Policv is either terminated or not renew€

(b) if the Extended Reporting Period is purchased, the expiration date of the Extended Reporting Period; or

(c) if the Company sends written notice to the Firm pursuant to Section XX(A)(3) Termination of Policy, prior to the effective date of such termination

(2) If during the Policy Period an lnsured becomes aware of a Wrongful Act which may subsequently give rise to a Claim, and during the Policy Period the lnsured:

(a) gives the Company written notice of such Wrongful Act, including a description of the Wrongful Act in question, the identities of the potential claimants, the consequences that have resulted or may result from the Wrongful Act, the damages that may result from the Wrongful Act and the circumstances by which the lnsured first became aware of the Wrongful Act; and

(b) requests coverage under this Policy for any Claim subsequently arising from such Wrongful Act,

then the Company will treat any such subsequently resulting Claim as if it had been made against the lnsured during the Policy Period; provided that written notice of such Claim is then given to the Company in accordance with paragraph (A)(l) of this Section X

(3) All notices of Claims and Wrongful Acts required under this Section X must be sent in writing to the address set forth in Section XI Notice

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(B) Interrelationship of Claims:

All Related Claims will be treated as a single Claim made at the time the first of such Related Claims was made, or when the first of such Related Claims is treated as having been made in accordance with Section X(A)(2), whichever is earlier,

XI. NOTICE

(A) Ail notices to the Company under this Policy of Claims or Wrongful Acts which could give rise to a Claim shall be given in writing addressed to:

Attn: Claims Department Chubb Group of lr~surarice Companies 82 Hopmeadow St. Simsbury. CT 06070-7683

(B) All other notices to the Comparly under this Policy shali be given in writing addressed to:

Ann: Underwriting Chubb Group of Insurance Companies 3 Mountain View Road

XII. DEFENSE AND SETTLEMENT

(A) It shali be the duty of the lnsured and not the duty of the Company to defend Claims made against the lnsured and to retain qualified counsel of its own choosing with the Company's prior written consent, such consent not to be unreasonably withheld,.

(8) With respect to any Claim that appears reasonably likely to be covered in whole or in part under this Policy, the Company shall have the right and shall be given the opportunity to effectively associate with the lnsured, and shall be consulted in advance by the lnsured regarding the investigation, defense and settlement of such Claim, including but riot limited to selecting appropriate defense counsel and negotiating any settlement it shall not be unreasonable for the Company to withhold its consent to the representation of any lnsured by another lnsured or, if more than one lnsured is involved in a Claim, to withhold its consent to separate counsel for one or more of such lnsureds, unless there is a material actual or potential conflict of interest among such Insureds,.

(C) No lnsured shall settle or offer to settle any Claim, incur any Defense Costs, or otherwise assume any contractual obligation or admit any iiability with respect to any Claim without the Company's prior written consent, which shall not be unreasonably withheld. The Company shall not be liable for any settlement, Defense Costs, assumed obligation or admission to which it has not given its prior written consent.

(D) If any lnsured withholds consent to any settlement acceptable to the claimant in accordance with the Company's recommendation (a "Proposed Settlement"), then the Company's liability for all Loss, including Defense Costs, from such Claim shall not exceed the amount of the Proposed

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CHUBB PRO LAWYERS PROFESSIONAL LlABlLlN

Settlement plus Defense Costs incurred up to the date of the Insured's refusal to consent to the Proposed Settlement of such Claim

(E) The Company shall have no obligation to pay Loss, including Defense Costs, or to defend or continue to defend any Claim, after the Company's applicable Limit of Liability with respect to such Claim has been exhausted by the payment of Loss If the Company's Limit of Liability is exhausted by the payment of Loss prior to the expiration of this Policy, the Policy premium will be deemed fully earned

The lnsured agrees to provide the Company with all information, assistance and cooperation which the Company may reasonably require and agree they will do nothing that may prejudice the Company's position or its potential or actual rights of recovery

The Company shall, upon written request, advance on a current basis Defense Costs owed under this Policy As a condition of any payment of Defense Costs before the final disposition of a Claim, the Company may require a written undertaking on terms and conditions satisfactory to it guaranteeing the repayment of any Defense Costs paid on behalf of any lnsured if it is finally determined that this Policy would not cover Loss incurred by such lnsured in connection with such Claim

XIII. CHANGES IN EXPOSURE

(A) Acquisition of Additional Attorneys

If, during the Policy Period, the total number of attorneys in the Firm increases by more than five percent (5%) as the result of the Firm's merger with or acquisition of any other law firm or any group of attorneys who practices together at another law firm, the Firm must promptly give the Company written notlce thereof, and the Company will be entitled to impose such add~t~onal coverage terms and charge such additional premium in connection therewith as the Company, In its sole discretion, may require Subject to the provisions of this paragraph, coverage shall only be provided for such acquired attorneys with respect to Wrongful Acts committed or allegedly committed after the date of such merger or acquisition

(B) Conversion of Coverage under Certain Circumstances

If, during the Policy Period:

( I ) all or substantially all of the Firm's assets are acquired by another organization or person or group of organizations or persons acting in concert;

(2) Financial lmpairment occurs; 01

(3) the Firm merges or consolidates into or with another entity such that the Firm is not the surviving entity,

then coverage provided by this Policy shall continue until termination, but only with respect to Claims for Wrongful Acts committed or allegedly committed prior to such event.

The Firm shall give written notice of all events under this Section Xlll to the Company as soon as practicable together with such other information as the Company may request If Financial lmpairment occurs, the entire premium for this Policy will be deemed fully earned as of the effective date of such Financial lmpairment

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XIV. REPRESENTATIONS AND SEVERABILITY

In issuing this Policy the Company has relied upon the statements, representations and information in the Application All of the Insureds acknowledge and agree that all such statements, representations and information (i) are true and accurate, (ii) were made or provided in order to induce the Company to issue this Policy, and (iii) are material to the Company's acceptance of the risk to which this Policy applies.

In the event that any of the statements, representations or information in the Application are not true and accurate, this Policy shall be void with respect to any lnsured who knew as of the effective date of the Application the facts that were not truthfully and accurately disclosed (whether or not the lnsured knew of such untruthful disclosure in the Application) or to whom knowledge of such facts is imputed. For purposes of the preceding sentence:

(A) the knowledge of any lnsured Person who is a past, present or future member of the management committee, executive committee or similar governing body of the Firm shall be imputed to the Firm;

(B) the knowledge of the person(s) who signed the Application for this Policy shall be imputed to all of the lnsureds; and

XV. VALUATION A

All premiums, limits, Retention Amounts, Loss and other amounts under this Policy are expressed and payable in the currency of the United States of America. If a judgment is rendered, a settlement is denominated or any element of Loss under this Policy is stated in a currency other than United States of America dollars, payment under this Policy shall be made in United States of America dollars at the rate of exchange published in The Wall Street Journal on the date the final judgment is reached, the amount of the settlement is agreed upon or the element of Loss is due, respectively,.

XVI. SUBROGATION

In the event of any payment under this Policy, the Company shall be subrogated to the extent of such payment to all the Insured's rights of recovery therefor, and the lnsured shall execute all papers required and shall do everything necessary to secure and preserve such rights, including the execution of such documents necessary to enable the Company effectively to bring suit or otherwise pursue subrogation rights in the name of any lnsured

XVII. ACTION AGAINST THE COMPANY

No action may be taken against the Company unless, as a condition precedent thereto, there shall have been full compliance with all the terms of this Policy No person or entity shall have any right under this Policy to join the Company as a party to any action against any lnsured to determine such lnsured's liability nor shall the Company be impleaded by such lnsured or legal representatives of such lnsured

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XVIII. FIRM RIGHTS AND OBLIGATIONS

By acceptance of this Policy, the Firm acknowledges and agrees that it shall be considered the sole agent of and will act on behalf of each lnsured with respect to: the payment of premiums and the receiving of any return premiums that may become due under this Policy; the negotiation, agreement to and acceptance of endorsements; the giving or receiving of any notice, including but not limited to giving notice of Claim or a notice of termination pursuant to Section XX Termination of Policy; and the receipt or enforcement of payment of a Loss (and the Firm shall be responsible for application of any such payment as provided for in this Policy). Each Insured acknowledges and agrees that the Firm shall act on its behalf with respect to all such matters

XIX. ALTERATION AND ASSIGNMENT

No change in, modification of, or assignment of interest under this Policy shall be effective except when made by a written endorsement to this Policy which is signed by an authorized employee of Chubb & Son, a division of Federal Insurance Company.

XX. TERMINATION OF POLICY

ovlded that any event

(2) upon expiration of the Policy Period as set forth in ITEM 3 of the Declarations;

(3) twenty (20) days after receipt by the Firm of a written notice of ternination from the Company based upon nonpayment of premium, unless the premium is paid within such twenty (20) day period; or

(4) at such other time as may be agreed upon by the Company and the Firm

(B) The Company shall refund the unearned premium computed at customary short rates if this Policy is terminated by the Firm Under any other circumstances the refund shall be computed pro rata Payment or tender of any unearned premium by the Company shall not be a condition precedent to the effectiveness of such termination, but such payment shall be made as soon as practicable

XXI. BANKRUPTCY

Except as provided in Section Xlil Changes in Exposure, bankruptcy or insolvency of any lnsured shall not relieve the Company of its obligations nor deprive the Company of its rights or defenses under this Policy

XXII. HEADINGS

The descriptions in the headings and sub-headings of this Policy are solely for convenience, and form no part of the terms and conditions of coverage

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- XXIII. COMPLIANCE WITH APPLICABLE TRADE SANCTION LAWS

This insurance does not apply to the extent that trade or economic sanctions or other laws or regulations prohibit ttie Company from providing insurance

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