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Resolution - 2010-R0605 - Contract 9399 Property Insurance From ACE Fire Underwriters John T. Montford Dam - 12/15/2010
Resolution No. 2010-RO605 December 15, 2010 Item No. 5.7 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAI' the Mayor of the City of Lubbock or his designee is hereby authorized and directed to purchase for and on behalf of the City of Lubbock, property insurance by and between the City of Lubbock and ACE Fire Underwriters Insurance Company in the amount of $50,000,000 insurance coverage for Montford Dam, pursuant to the terms and conditions attached hereto as Exhibit "A," and in a final form acceptable to the City Manager and City Attorney for a total premium in an amount not to exceed $124,387: and THAT the City Manager or designee may execute any routine documents and forms associated with said insurance coverage. Passed by the City Council this 15th day of December . 2010. TOM MARTIN, MAYOR ATTEST: Reb cca iiarza, City Secretary APPROVED AS TO CONTENT: Leisa Hutcheson. Director of Risk Management cdocs' Res Agreement -ACG Fire Underwriters Ins Co !tuber 30 2010 Exhibit "A" Resolution No. 2010-RO605 JOHN T. MONTFORD DAM / CITY OF LUBBOCK, TX / LAKE ALAN HENRY PROPERTY INSURANCE RENEWAL PROPOSAL JANUARY 18, 2011 TO JANUARY 18, 2012 CARRIER: ACE FIRE UNDERWRITERS INSURANCE COMPANY PARTICIPATION: 100% ($50,000,000) PREMIUM: $113,079plus $11,308 Terrorism RATE: 0.1487 BEST'S RATING: A+ XV Executive Summary INTRODUCTION NAPCO LLC is pleased to continue our partnership with Wells Fargo Insurance Services of Texas, Inc. and John T. Montford Dam/City of Lubbock, and we are grateful to have been given the opportunity to provide our Property and Equipment Breakdown Insurance Renewal Proposal. NAPCO prides itself on providing our clients with the highest level of professional program design, marketing and service delivery. Our goal is to continue our long-term business partnership with Wells Fargo Insurance Services of Texas, Inc. and John T. Montford Dam/City of Lubbock. We recognize that in order to achieve this goal, we must continue to establish trust and commitment to positively impact our mutual relationship. BRIEF MARKET UPDATE Property insurance pricing, in general, is under pressure as abundant capacity pushes insurers to compete in a market where demand for insurance remains anemic in the aftermath of a global financial crisis and ensuing economic downturn. While most accounts will see a decline in property insurance prices, the declines are tempered by concern about potential catastrophe losses and the impact of a low interest rate environment on investment portfolios that have not fully recovered from damage done during the crisis. Signs of an economic recovery began to emerge in the latter part of 2009, but it is unclear if the improvement is sustainable. Still, if a recovery continues to take hold, it could set the stage for improved insurance demand in 2011. Insurance industry net income rebounded smartly in 2009, helped by light catastrophe losses. Last year's substantial rise in policyholder surplus is supplying insurers with fuel for a competitive market, and it appears 2010 surplus could push beyond the 2007 peak. The insurance industry has already incurred heavy catastrophe losses in the first quarter, although not enough to push property insurance prices higher. • Catastrophe losses soared to $16 billion in the first quarter of 2010, according to Willis Re. Earthquakes, and powerful winter storms in the United States and Europe, contributed to the first quarter losses. • So far this year, even though major earthquakes have struck Haiti, Chile, northern Mexico (Mexicali) and China, capacity for earthquake coverage has increased slightly, but demand has been stable. • Hurricane season began June 1, and forecasters anticipate an "active to extremely active" wind season. Colorado State University predicts 15 named storms, eight becoming hurricanes, and four developing into major hurricanes. NOAA predicts, with 70% probability, 8-14 hurricanes, with 3-7 as major hurricanes. Page 2of13 Ample capacity has created a competitive market, driving down property insurance rates for most accounts. Other forces however, are helping to stabilize rates. Insurers, for instance, are under growing pressure to earn more from underwriting as their investments produce less income than they have in the past. The increased potential for 2010 catastrophe losses, based on multiple expert opinions, is another area ofgreat concern. • Recent renewal rates for accounts with catastrophe exposures range from flat to down 10% compared with a year ago. • Renewal pricing can be affected by the rate's starting point. For accounts that have already received sizable reductions since 2007, current pricing may be too thin to allow for much additional reduction. • Concern about aggregate catastrophe exposure has prompted some underwriters to scale back capacity for certain accounts. Others, particularly admitted markets, are stepping into the catastrophe market, and tougher business classes, in search of better returns. • As financial institutions are judged principally on their ability to pay, insurance carriers continue to be influenced by rating agency pressure. THE MARKETING EFFORT The price of "insurance" has historically fluctuated depending on the state of the market coupled with how the market perceives John T. Montford Dam/City of Lubbock's particular exposures and individual loss history. Our primary objective remains constant -- to assist you using a controlled marketing approach in order to manage these fluctuations. By focusing on market additions and exploring alternative programs, our goal is to design and implement a property insurance program which protects John T. Montford Dam/City of Lubbock's physical assets and earnings while optimizing John T. Montford Dam/City of Lubbock's total cost of risk (retention + risk transfer costs). The key element in our approach to John T. Montford Dam/City of Lubbock's program was to maintain the optimal balance of pricing and coverage - in a changing marketplace — through early negotiations with incumbent carriers. This strategy takes advantage of today's favorable pricing and coverage environment due, in large part, to the past two years of minor industry catastrophe losses. In keeping pace with the changing market conditions, our overall objectives included: Working closely with Wells Fargo Insurance Services of Texas, Inc. to secure accurate and up-to-date information. Containing John T. Montford Dam/City of Lubbock's risk transfer and risk retention costs through effective program design. Providing John T. Montford Dam/City of Lubbock's with aggressive, yet professional representation in the insurance market, by accessing the allocated standard, surplus lines and reinsurance capacity. Page 3 of 13 Designing an efficient and effective program through capturing underwriter's (comfort zone) capacity enhancing John T. Montford Dam/City of Lubbock's flexibility to react to market swings. Maximizing carriers' net and treaty capacity, minimizing the need for facultative reinsurance, further insulating the program from market swings. INSIRABLE VALUES The values used for this proposal are summarized as follows: $76,044,754 TERRORISM The tragic events of September 11, 2001 spawned Congress to enact the Terrorism Risk Insurance Act of 2002 (TRIA). This act was extended in 2005 and further amended and extended in 2007, currently known as Terrorism Risk Insurance Program Reauthorization Act of 2007 (TRIPRA). Please click on the icon below to access details about these Acts: Non- Certified Acts of Terrorism This coverage is available from many carriers now, though usually only if TRIPRA is purchased. As with TRIPRA, pricing and forms vary considerably from company to company. Some merely do not attach a terrorism exclusion; some have a special endorsement attached to the policy form. Additional information is available upon request. Page 4of13 NAPCO AUTHORIZATION OF PROPERTY INSURANCE This authorization of insurance may not comply with the specifications submitted for consideration. Please read this authorization carefully and review the policy forms for the actual coverages provided. Please provide written instructions to NAPCO in order to effect such coverage with the insurance companies outlined herein. This insurance quotation will be terminated and superseded upon delivery of the formal Confirmation of Insurance issued to replace it. Named Insured: John T. Montford Dam / City of Lubbock, TX /Lake Alan Henry Mailing Address: P.O. Box 2000 Lubbock, TX 79457 Policy Period: ' January 18, 2010 to January 18, 2011 at 12:01 AM local time of the insured address. Coverages: Property Damage, Newly Acquired Property, Debris Removal, Pollutant Clean- up, including Terrorism, and as more fully defined in the ACE Inland Marine Engineered Risk Manuscript policy form_ Perils: All risks of direct physical loss or damage including Flood, Earth Movement and Named Windstorm, excluding Boiler & Machinery. Territory: ! This policy covers within the fifty (50) states comprising the United States of America and the District of Columbia. Limits of Liability: $ 50,000,000 per occurrence, except: Thefo/lowing sublimits do not increase the above -stated per occurrence limit of liability: $ 50,000,000 per occurrence as respects Property Damage; j $ 10,000,000 per occurrence and in the annual aggregate as respects Flood; $ 10,000,000 per occurrence and in the annual aggregate as respects Earth Movement; 5% of the amount of loss, subject to a maximum of $2,500,000 per occurrence as respects Debris Removal. f $ 2,500,000 per occurrence as respects Newly Acquired (90 Days Reporting); $ 1,000,000 per occurrence as respects Valuable Papers; $ 1,000,000 per occurrence as respects Accounts Receivable; $ 1,000,000 per occurrence as respects Demolition and Increased Cost of Construction; $ 1,000,000 per occurrence as respects Intake Tower and Outlet Works; $ 100,000 per occurrence as respects Transit; $ 100,000 per occurrence as respects Intake Bridge; $ 25,000 per occurrence and in the annual aggregate as respects Pollutant Clean-up and Removal; And as more fully defined in the ACE Engineered Risk policy form. Page 6of13 NAPCO AUTHORIZATION OF PROPERTY INSURANCE This authorization of insurance may not comply with the specifications submitted for consideration. Please read this authorization carefully and review the policy forms for the actual coverages provided. Please provide written instructions to MAPCO in order to effect such coverage with the insurance companies outlined herein. This insurance quotation will be terminated and superseded upon delivery of the formal Confirmation of Insurance issued to replace it. Deductibles: $2,000,000 per occurrence all covered loss. Valuation: Real and Personal Property - Replacement Cost if replaced, otherwise Actual Cash Value. And as more fully defined in the ACE Engineered Risk Manuscript policy form. Form: _ Per the ACE Inland Marine - Engineered Risk Manuscript Policy Form (refer to specimen copy attached), including, but not limited to the following mandatory company forms/endorsements: • ACE USA Pollution and Contamination Exclusion • Electronic Data/Cyber Risk Endorsement • Asbestos Exclusion; Mold/Fungus Exclusion • Nuclear, Chemical and Biological Exclusion Cancellation: Notice of Cancellation or Non -Renewal: - 60 Days Written Notice. I - 10 Days Written Notice for Non -Payment of Premium. Other Conditions: • Loss of Revenue Endorsement — Not Covered • Fire Department Service Charge — Not Covered • Expediting Expense — Not Covered • Extra Expense Not Covered • Loss Adjustment Ex enses —Not Covered �TIV: I $76,044,754 _ Loss History: No known or reported losses above the deductible. Annual Premium $ 113,079 Property Premium $ 11,308 Premium for Terrorism Coverage $ 124,387 Total (p/us any applicable loxes/surcharges/fees) *Included herein is an estimated surplus lines tax calculation amount. State premium allocations will be confirmed with the insurer(s) during the binding process. I _ Minimum Earned: ' $250 Page 7of13 NAPCO AUTBORIZATION OF PROPERTY INSURANCE This authorization of insurance may not comply with the specifications submitted for consideration. Please read this authorization carefully and review the policy forms for the actual coverages provided. Please provide written instructions to NAPCO in order to effect such coverage with the insurance companies outlined herein. This insurance quotation will be terminated and superseded upon delivery of the formal Confirmation of Insurance issued to replace it. Insurers: Westchester Fire Insurance Company (Admitted) Best's Rating: A+ XV This quote is valid only until inception date noted herein. Page 8of13 Specimen Company Policy Form Double click on the icon below to access the ACE Inland Marine — Engineered Risk Coverage Form: (f the icon does not appear, please switch to Print Layout by using the "View" drop-down menu) t1 l Page 9 of 13 Claims Management Services NAPCO is committed to providing professional claims management services that are creative and will reduce your total cost of risk. Even with the most effective loss control program, claims will occur. The impact of these claims can be mitigated with proactive and innovative claims management practices. The overall scope of NAPCO's claim management services include: ■ Identifying a Designated Account Adjuster and other claims experts as deemed appropriate and necessary. ■ Developing and tailoring claims handling instructions in concert with your needs and the claims team to manage the claims process effectively and effortlessly. ■ Creating an internal claims procedure document that may be utilized when a loss occurs to simplify the post -loss mitigation process. ■ Assisting in the claims process by providing necessary resources to address claims issues that may arise during the life of a claim. ■ Coordinating and directing the claims team in large or difficult claims situations by managing the information flow and providing necessary documentation to validate the claim. In addition to the claims services that NAPCO delivers for each and every loss, we are pleased to offer our Claims Consultation Services for those complex, high value/profile claims. In addition to the services detailed above, NAPCO will provide: ■ Daily monitoring of the specific claim, including necessary contact with the adjuster and/or their experts, the Insured and/or specific designated representatives and, of course, the retailer. ■ On-site visits requested/required by the retailer/Insured to inspect/discuss/review the loss/damage or claim documentation. ■ Attending interim and final settlement meetings. Page 10 of 13 Partnership with a Value -Added Wholesaler Since the 19th century, producers of goods have relied on wholesalers to distribute their products. The system works because it is an efficient method for manufacturers to place products on the shelves of retailers and, ultimately, in the hands of consumers. Wholesalers level the playing field and enhance both competition and growth opportunities for small and mid-size retailers by providing access to the same products that are available to larger competitors. In some respects, the role of the wholesale insurance broker is no different. Wholesale insurance brokers offer an effective vehicle for insurance carriers—the manufacturers—to distribute their products. However, in today's increasingly complex risk landscape, wholesale insurance brokers are much more than product distributors. They are knowledgeable placement specialists who, collaborating as a team with retail brokers and insureds, offer the advantage of deep expertise in particular lines or classes of business, sophisticated technology to evaluate risks, and access to markets that would otherwise be out of reach. The relationship between retail brokers and wholesale brokers has been evolving over time from one of independence to interdependence. In an effort to streamline marketing and risk selection, some specialty insurers restrict access to their capacity to specific wholesale brokers. Retail brokers, likewise, recognize that a wholesale broker can provide necessary expertise in a particular industry, class of business, or type of exposure. The placement process for commercial insurance accounts requires a comprehensive understanding of all the various insurance company capacities, evolving risk appetites, preferred layer positioning (primary, buffer, excess, etc.) and financial strength in order to develop the best program design. A placement team that combines the power of a retail and wholesale broker provides the insured undeniable advantages: in-depth knowledge, broad market reach throughout the global marketplace, strong relationships with underwriters, and familiarity with the insured's needs. During adverse or hard market conditions—when prices increase because of reduced capacity—a wholesale broker can be a critical partner in navigating the market to find the capacity to cover the risk while mitigating some of the higher insurance costs. Wholesale brokers who are experts in their field and know exactly what information underwriters need to make a confident evaluation and sound underwriting decision: high- quality, detailed and complete risk data presented in an organized fashion. Deep industry expertise, as well as broad marketing reach, will generally produce the most favorable policy terms and conditions available, while minimizing cost. Specialized hard -to -place risks—such as high earthquake, flood or hurricane exposures—will benefit from increased competition created by marketing to additional and diverse carriers. Page I1 of 13 Furthermore, when retail brokers partner with a wholesaler broker on competitive proposals, history shows such collaboration drives successful outcomes. Moreover, the additional market access provided by wholesale brokers assists the retail broker by providing added pricing leverage against the retailer's direct markets. This ultimately contributes to premium savings to the insured. The insured incurs no additional charge in using the services of a wholesale broker while accessing the substantial benefits of superior market knowledge and placement expertise. With a wholesale broker, the insured has the advantage of increased competition for its business through wider market access, thorough preparation of all pertinent documentation used in the placement process, and the most cost-effective coverage design. Conclusion Insurance is an intensely competitive business, and buyers who demand a strong insurance placement team will secure the best insurance coverage and the broadest terms for the most attractive price. By the same measure, retail brokers can increase their client's satisfaction by building a placement team that includes a wholesale placement specialist. Retail brokers who take a long term, strategic view on how to best meet the needs of insurance buyers will partner with the right wholesale broker. Once again, your NAPCO team extends its thanks for the privilege of partnering with Wells Fargo Insurance Services of Texas, Inc. and John T. Montford Dam/City of Lubbock on this program. We appreciate all the help and information supplied to us by both Wells Fargo Insurance Services of Texas, Inc. and John T. Montford Dam/City of Lubbock. Beyond taking great pride in the program we have negotiated on your behalf, we truly value our business relationship with Wells Fargo Insurance Services of Texas, Inc. and John T. Montford Dam/City of Lubbock and look forward in continuing to add value in your Property and Equipment Breakdown Insurance Renewal Proposal. Page 12 of 13 Account Team Contact Phone No. E -Mail Marketing Broker: John M. Carlsen 732-603-2061 jcarlsenTaNAPCOIIc.com Sr. Account Manager: Jennifer Ryan 732-603-2083 NAPCO 517 US Highway 1 South Suite 4002 Iselin, NJ 08830 Tel: 732-549-5222 Fax: 732-549-0221 Ohio Regional Office www.NAPCO11c.com iryan@NAPCOIIc.com NAPCO has used due care in the preparation of this document. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. NAPCO shall owe no liability whatsoever to any person for any loss or damage caused by or resulting from any error in such information. Page 13 of 13 INLAND MARINE - ENGINEERED RISK DECLARATIONS Policy Number: Insurer: Named Insured and Mailing Address: I. General Policy Information: Business Description: When Coverage Begins: When Coverage Ends: Description and location of property insured: Producer's Name & Address: 12:01 a.m. Local Time at Named Insured's address 12:01 a.m. Local Time at Named Insured's address In return for the payment of premium and subject to all the terms and conditions of this policy, the COMPANY provides the insurance as stated in this policy. II. Limits of Insurance: A. Occurrence Limit of Insurance The most the COMPANY will pay for all loss or damage resulting from all Covered Causes of Loss in any one OCCURRENCE is: $ a % share of $ B. Sub -Limits of Insurance The COMPANY will not be liable for more than its proportionate share ( %) of the following Sub -limits of Insurance and Aggregate Sub -limits of Insurance, in any one OCCURRENCE. These Sub -limits of Insurance are part of and not in addition to the Occurrence Limit of Insurance above: Sub -limits of Insurance Property Damage $ Loss of Revenue endorsement $ Period of Indemnity (days, months, years) ACE0446 (11/08) Copyright 0 2008 vi Page 1 of 3 C. Extensions of Coverage: Debris Removal Fire Department Service Charge Loss Adjustment Expenses Pollutant Clean Up Extra Expense Expediting Expenses Sub -limits of Insurance Occurrence Limit Aggregate Limit Occurrence Limit Aggregate Limit Occurrence Limit Aggregate Limit Occurrence Limit Aggregate Limit Occurrence Limit Aggregate Limit When an "x" appears below and limits of insurance are provided, the referenced exclusion is deleted. ❑ Earth Movement Occurrence Limit $ Aggregate Limit $ ❑ Flood Occurrence Limit $ Aggregate Limit $ - Zones A, AE, Al -A30, AH, AO, AR, A99, AR/A, AR/AH, AR/AO, AR/A1-A30, B -Protected, D, V, VE, V1 -V30 and Shaded X -Protected. ❑ Flood - All other Flood zones. ❑ Named Windstorm Occurrence Limit $ Aggregate Limit $ Occurrence Limit $ Aggregate Limit $ The Sub -limits of Insurance in Item II. B. and li. C. above and those included in any endorsements attached to this Policy shall be part of, and not in addition to the Occurrence Limit of Insurance shown in Item II. A. above. Any aggregate Sub -limits of Insurance shown in Item II. C. shall be the most we will pay for the perils of flood, earth movement and named windstorm and for the Debris Removal, Fire Department Service Charges, Loss Adjustment Expenses, Pollutant Clean -Up and Extra Expense Coverages, during the policy period. ACE0446 (11/08) Copyright 0 2008 0 Page 2 of 3 III. Deductible All covered loss except as below Loss or damage caused by or resulting from earth movement Loss or damage caused by or resulting from flood Loss or damage caused by or resulting from water damage Loss or damage caused by or resulting from Named Windstorm Loss of Revenue IV. Premium: V. Coinsurance Amount: None or % $ or % $ or % Days Term VI. Attached Forms These Declarations, the forms attached and all endorsements attached and issued on or after the effective date constitute the Policy. Date: Authorized Representative ACE0446 (11/08) Copyright ©2008© Page 3 of 3 INLAND MARINE ENGINEERED RISK COVERAGE FORM Words in CAPITAL LETTERS have special meaning and are defined in section F. DEFINITIONS in this Coverage Form. A. INSURING AGREEMENT This Policy, subject to the terms, conditions, definitions and exclusions stated herein, or endorsed hereto, insures against risks of direct physical loss or damage to the property described on the Declarations by the perils insured as set forth below or as otherwise afforded within this Policy. 1. PROPERTY EXCLUDED This Policy does not insure: a. Aircraft, spacecraft, satellite, mining equipment, rolling stock, any vehicle licensed for highway use, and watercraft; b. Animals; c. Cost of excavations, grading, backfilling or filling or dredging, except in connection with repairs to building(s), structure(s), or improvements to land including land fill destroyed or damaged by a peril insured against. d. Electrical, gas, steam, water, telephone and other transmission lines and related plants, substations and equipment located beyond one hundred (100) feet from the insured premises; e. Furs, jewelry, jewels, pearls, precious or semi-precious stones, gold, silver and platinum or other precious alloys; f. Land; water; growing crops; lawns; outdoor trees, shrubs and plants; standing timber; coal; mines, including property and equipment contained therein; g. INSURED'S interest in property of which the INSURED is a joint owner with other parties (known as Joint Venture Property) unless declared as such in the Statement of Values; h. Bills, currency, stamps, evidence of debt, checks, money, securities, models, renderings, or other property of a similar nature; i. Offshore rigs and platforms and property located thereon; j. Property sold by the INSURED under conditional sale, trust agreement, installment payment or other deferred payment plan, after delivery to customers; k. Underground wells, piping, mains, sewers and drains, including personal property therein; I. Property that is away from the INSURED'S owned property unless transit and/or off site storage coverage is specifically endorsed onto this Policy. ACE0447 (11/08) Copyright 0 2008 11 Page 1 of 15 B. LIMITS OF INSURANCE AND DEDUCTIBLE The COMPANY will pay no more for loss or damage in any one OCCURRENCE than the applicable Limit of Insurance amount shown in Item II. A. of the Declarations, subject to the following: 1. POLICY SUB -LIMITS OF INSURANCE The COMPANY will pay no more for direct physical loss or damage in any one OCCURRENCE than the Sub -limit of Insurance stated in Item II. B. or II. C. of the Declarations for each applicable Coverage or Extension of Coverage. 2. AGGREGATE SUB -LIMITS OF INSURANCE The most the COMPANY will pay for direct physical loss or damage from any one OCCURRENCE, and/or in the aggregate for loss or damage from all OCCURRENCES in any one Policy year, shall not exceed the stated amounts in Item II. C. of the Declarations unless otherwise limited by the Sub -limits of Insurance stated in Item II. B. of the Declarations. The Sub -limits of Insurance and aggregate Sub -limits of Insurance shown in Item 11. B. and II. C. of the Declarations are part of, and not in addition to, the Limit of Insurance shown in Item 11. A. of the Declarations. 3. DEDUCTIBLES The COMPANY will adjust all direct physical loss or damage arising out of any one OCCURRENCE as one loss. The COMPANY shall have no liability under this Policy, unless the INSURED sustains a covered loss in excess of any applicable deductible or deductibles stated in Item III of the Declarations. The COMPANY will then pay the amount of loss or damage in excess of the applicable deductible. If a percentage amount is shown for the deductible(s) of earth movement, flood and named windstorm, the percentage shall be applied against the VALUES AT RISK AT TIME OF LOSS. In the event that more than one deductible shown in Item III. of the Declarations, or provided in any endorsement, shall apply to insured loss or damage in any one OCCURRENCE, only the largest deductible shall be applied. Notwithstanding anything to the contrary provided by this Policy, if this Policy is endorsed to provide coverage for loss of REVENUE, the deductible in each applicable loss of REVENUE endorsement will be applied separately. C. EXTENSIONS OF COVERAGE This Policy, subject to all terms, conditions, definitions and exclusions stated herein or endorsed hereto, is extended to insure direct physical loss or damage occurring to, or resulting from, the following if the applicable extension is purchased, and a dollar value has been placed in Item II. B. of the Declarations. The Limit of Insurance for each Extension of Coverage is a Sub -limit of Insurance and is part of and not in addition to the Occurrence Limit of Insurance shown on the Declarations. 1. Debris Removal The COMPANY will pay the expense incurred in the removal of debris of the damaged property covered by this Policy as a result of direct physical loss or damage to such property by an insured peril. The total amount recoverable under this Policy for both loss or damage to property and ACE0447 (11/08) Copyright 0 2008 11 Page 2 of 15 debris removal expenses will not exceed the applicable Sub -limit of Insurance. Any coverage provided for debris removal shall not include any cost or expense to: a. Extract CONTAMINANTS OR POLLUTANTS from the debris; or b. Extract CONTAMINANTS OR POLLUTANTS from land or water; or c. Remove, restore or replace contaminated or polluted land or water; or d. Remove or transport any property or debris to a site for storage or decontamination, because the property or debris is affected by CONTAMINANTS OR POLLUTANTS whether or not such removal, transport, or decontamination is required by law or regulation. It is a condition precedent to recovery under this coverage extension that the COMPANY shall have paid or agreed to pay for direct physical loss or damage to the property insured hereunder, and that the INSURED shall give written notice to the COMPANY of its intent to make a claim for cost of removal of debris or cost to clean up not later than twelve (12) months after the date such physical loss or damage first commenced. The most the COMPANY will pay under this Coverage Extension is the Sub -limit of Insurance shown in Item II. C. of the Declarations for Debris Removal for the sum of all covered expenses arising out of covered loss occurring during each separate twelve (12) month period of this Policy. 2. Fire Department Service Charges When a fire department is called to save or protect property insured by this Policy from a direct physical loss or damage by an insured peril, the COMPANY will pay the charges that result from: a. a contract or agreement signed prior to the loss; or b. required by local ordinance The most the COMPANY will pay under this Coverage Extension is the Sub -limit of Insurance shown Item II C of the Declarations for Fire Department Service Charges for the sum of all covered expenses arising out of covered loss or damage occurring during each separate twelve (12) month period this Policy is in effect. 3. Loss Adjustment Expenses The COMPANY will pay the reasonable and necessary costs or expenses the INSURED incurs to prepare loss or damage data required by policy conditions after loss or damage by a Covered Peril. This includes the cost of taking inventory, making appraisals and preparing other data to determine the extent of your covered loss. This Extension of Coverage does not include costs or expenses for: a. Public Adjusters or any firm or entity acting in the capacity of a public adjuster, including their employees, agents, or representatives; b. Legal and paralegal fees; c. Claim consultants, insurance brokers or agents, or any person acting on behalf of a claim consultant or insurance broker or agent; d. Costs associated with the negotiation or presentation of any claim or part of a claim that we have told you is in dispute or that we have denied; e. Costs or expenses which are your normal overhead or operating expense; ACE0447 (11/08) Copyright 020080 Page 3 of 15 f. Costs or expenses associated with trying to establish that a claim or part of a claim is covered by the policy. The most the COMPANY will pay under this Coverage Extension is the Sub -limit of Insurance shown in item II.C. for Loss Adjustment Expenses for the sum of all covered expenses arising out of covered loss or damage occurring during each twelve (12) month period this policy is in effect. 4. Pollutant Clean -Up The COMPANY will pay the expenses to extract POLLUTANTS from land or water if the discharge, dispersal, seepage, migration, release or escape of the POLLUTANTS is covered by this Policy and occurs during the Policy period. The expenses will be paid only if they are reported to the COMPANY in writing within 180 days of the date from which loss commenced. This Coverage Extension does not apply to costs to test for, monitor or assess the existence, concentration or effects of POLLUTANTS But the COMPANY will pay for testing which is performed in the course of extracting the POLLUTANTS from the land or water. The most the COMPANY will pay under this Coverage Extension is the Sub -limit of Insurance shown in Item II. C. of the Declarations for Pollutant Clean Up for the sum of all covered expenses arising out of covered loss or damage occurring during each separate twelve (12) month period this Policy is in effect. S. Extra Expense This Policy, subject to the terms, exclusions, limits and conditions herein and endorsed hereto, covers the necessary and reasonable Extra Expense incurred by the INSURED during the period of restoration in order to continue as nearly as practicable and resume normal operations of the INSURED'S business following a direct physical loss or damage by an insured peril. In addition to the exclusions contained in the Policy or added by endorsement, there is no Extra Expense coverage for: a. Loss of income or loss of revenue; b. The cost or repairing or replacing any real or personal property; c. The cost of research or other expense necessary to replace or restore books of account, abstracts, drawings, card index systems or other records, including film, tapes, discs, drums, cell, or other recording or storage media for electronic data processing, that have been lost or damaged by a peril covered by this Policy, except cost in excess of the normal cost of such repair or replacement or restoration necessarily incurred for the purpose of reducing loss or damage insured by this Policy. In no event shall such excess cost exceed the amount by which the total Extra Expense loss otherwise payable under this Policy is reduced; d. Any consequential or remote loss; e. Any expense covered under any other part of this Policy. The most the COMPANY will pay under this Coverage Extension is the Sub -limit of Insurance shown in Item II. C. of the Declarations for Extra Expense for the sum of all covered expenses arising out of covered loss or damage occurring during each separate twelve (12) month period ACE0447 (11/08) Copyright 0 2008 0 Page 4 of 15 this Policy is in effect. 6. Expediting Expense In the event of direct physical loss or damage by an insured peril, occurring during the Policy period, the COMPANY will pay, subject to the Sub -limit of Insurance in Item II. C. of the Declarations, for the reasonable extra costs to make temporary repairs, and to expedite the permanent repair or replacement of the insured property which is damaged by an insured peril, including additional wages for overtime, night work, work on public holidays, and the extra costs of express freight or other rapid means of transportation. D. EXCLUSIONS This Policy does not insure loss or damage caused directly or indirectly by any of the following, and such loss or damage is excluded regardless of any other cause or event that contributes concurrently, or in sequence to the loss: 1. Governmental Action Seizure or destruction of property by order of governmental authority. But the COMPANY will pay for direct physical loss or damage caused by or resulting from acts of destruction ordered by governmental authority and taken at the time of a fire to prevent its spread if the fire would be covered under this Coverage Form. 2. Nuclear Hazard a. Any weapon employing atomic fission or fusion; or b. Nuclear reaction or radiation, or radioactive contamination from any other cause. But if nuclear reaction or radiation, or radioactive contamination results in fire, the COMPANY will pay for the direct physical loss or damage caused by that fire if the fire would be covered under this Coverage Form. 3. War and Military Action a. War, including undeclared or civil war; b. Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or c. Insurrection, rebellion, revolution, usurped power or action taken by governmental authority in hindering or defending against any of these. 4. Loss, damage, costs, expenses, fines or penalties incurred or sustained by or imposed on any INSURED at the order of any government agency, court or authority arising from any cause whatsoever, except physical destruction of insured property by order of public authority to prevent spread of fire or explosion. 5. Dishonest or criminal act or omission of the INSURED or of any associate, agent, member, manager or employee of the INSURED, while in the course of their employment, whether acting alone or in collusion with others and whether or not occurring during business hours. 6. Unexplained disappearance; shortage; other loss discovered upon taking inventory. 7. Infestation, disease, freeze, drought and hail, weight of ice or snow or any damage caused by insects or animals, but only as respects trees, plants, shrubs and landscaping. 8. Consequential loss, damage or expense of any kind or description including but not limited to loss of market or delay, liquidated damages, performance penalties, penalties for non -completion, delay ACE0447 (11/08) copyright 0 2008 19 Page 5 of 15 in completion, or non compliance with contract conditions, whether caused by a peril insured or otherwise; however, the foregoing shall not exclude Loss of Revenue Coverage when it is endorsed to this Policy. 9. Loss or damage covered under any written or implied guarantee or warranty by any manufacturer or supplier. 10. Asbestos Hazard: a. Asbestos material removal unless the asbestos itself is damaged by fire, lightning, aircraft impact, explosion, riot, civil commotion, smoke, vehicle impact, windstorm or hail, vandalism, malicious mischief, leakage or accidental discharge from automatic fire protective systems. b. Demolition or increased cost of reconstruction, repair, debris removal or loss of use necessitated by the enforcement of any law or ordinance regulating asbestos material. c. Any governmental direction or request declaring that asbestos material present in or part or utilized on any undamaged portion of INSURED'S property can no longer be used for the purpose for which it was intended or installed and must be removed or modified. 11. Loss or damage caused by, resulting from, contributed to or made worse by actual, alleged or threatened release, discharge, escape or dispersal of CONTAMINANTS or POLLUTANTS, all whether direct or indirect, proximate or remote or in whole or in part caused by, contributed to or aggravated by any physical damage insured by this Policy. Nevertheless, if fire is not excluded from this Policy and a fire arises directly or indirectly from seepage or contamination or pollution, any loss or damage insured under this Policy arising directly from that fire is insured, subject to the provisions of this Policy. This exclusion shall not apply when loss or damage is directly caused by fire, lightning, aircraft impact, explosion, riot, civil commotion, smoke, vehicle impact, windstorm, hail, vandalism, malicious mischief, leakage or accidental discharge directly causes loss or damage from automatic fire protective systems. 12. The increased cost to comply with the enforcement of any law or ordinance that: a. Requires the demolition of parts of undamaged property; b. Regulates the construction or repair of damaged property; 13. Loss, damage, destruction, distortion, erasure, corruption, alteration, diminishment in value, or loss of use or usefulness of: a. ELECTRONIC DATA by any cause whatsoever (including but not limited to COMPUTER VIRUS); and/or b. ELECTRONIC MEDIA caused by or resulting from the loss, damage, destruction, distortion, erasure, corruption, alteration, diminishment in value, or loss of use or usefulness of ELECTRONIC DATA; regardless of any other cause or event that contributes concurrently or in any sequence to the loss, damage, destruction, distortion, erasure, corruption, alteration, diminishment in value, or loss of use or usefulness of ELECTRONIC DATA or ELECTRONIC MEDIA. This exclusion does not apply to loss or damage of ELECTRONIC DATA or ELECTRONIC ACE0447 (11/08) Copyright 0 2008 12 Page 6 of 15 MEDIA caused by or resulting from the Perils of Fire, Explosion, Riot and Civil Commotion, Vehicles and Aircraft Impact or Collision, Sonic Boom, Sprinkler Leakage, Sinkhole Collapse, Flood, Earth Movement or Volcanic Action, if, and to the extent, such Perils are already covered by this or by any underlying Policy. 14. Any loss, damage or expense consisting of, caused by, contributed to, or aggravated by rust, mold, moss, mildew, fungi, spores, bacterial infestation or any similar organism, wet or dry rot and extremes of temperature or humidity, whether directly or indirectly the result of a covered peril. This includes, but is not limited to, the cost for investigation, testing, remediation services, extra expense or business interruption. Such loss or damage is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss. If loss or damage otherwise covered by this Policy occurs, and the cost of removal of debris is increased due to the presence of rust, mold, moss, fungus, bacterial infestation, wet or dry rot and extremes of temperature or humidity, this Policy will only be liable for the costs of debris removal which would have been incurred had rust, mold, moss, fungus, bacterial infestation, wet or dry rot or extremes of temperature or humidity not been present in, on, or about the covered property to be removed. 15. Rain, snow, sleet, sand, or dust, whether driven by wind or not, to the interior of any building or structure, or the property inside the building or structure, unless the building or structure first sustains Windstorm or Hail damage to its roof, windows or walls through which the rain, snow, sleet, sand or dust enters. 16. Unless coverage and applicable limits are indicated in Item II C of the Declarations, FLOOD, as defined by Section G of the Policy, that causes loss to any property located within a 100 Year Flood Zone, as designated or defined by the Federal Emergency Management Agency, U.S. Army Corps of Engineers, USGS or other recognized agency, unless specifically endorsed onto this Policy. 17. Unless coverage and applicable limits are indicated in Item 2C of the Declarations, EARTH MOVEMENT as defined by Section G of the Policy. 18. Electrical breakdown of any electrical machinery or apparatus while said equipment is undergoing an insulation breakdown test or is being dried out, unless direct physical damage not otherwise excluded by this Policy results to insured property, in which event, this Policy shall cover only such resulting damage. 19. Electrical injury or disturbance caused by electrical currents artificially generated; 20. Rupture or bursting of rotating or moving parts of machinery caused by centrifugal force or mechanical breakdown; water hammer; rupture or bursting of water pipes; rupture or bursting due to expansion or swelling of the contents of any building or structure, caused by or resulting from water; or rupture, bursting of operation of pressure relief devices. 21. Explosion, rupture or bursting of steam black liquor recovery boilers, steam boilers, steam pipes, steam turbines or steam engines owned, leased or operated under the Insured's control. But, if direct physical loss or damage by fire or combustion explosion ensues, this Policy will cover for such ensuing loss or damage. This Policy will also cover direct physical loss or damage caused by or resulting from explosion of gases or fuel within the furnace of any fired vessel or within the flues or passages through which the gases of combustion pass; and for direct explosion loss caused by internal pressure of steam in processing machinery, equipment or apparatus. 22. Material change or alteration in the design or construction of covered property but this shall not ACE0447 (11/08) Copyright 0 2008 fl Page 7 of 15 apply to temporary alterations or changes which are incidental to the performance of necessary repairs. This Policy does not insure loss or damage caused by any of the following unless direct physical loss or damage by an insured peril ensues and then this Policy insures only such ensuing direct physical loss or damage. 23. Corrosion, decay, deterioration, erosion, evaporation, inherent vice, latent defect, leakage, loss of weight, marring or scratching, rust, shrinkage, wear and tear or any quality in property which causes it to damage or destroy itself. 24. Interruption of incoming electricity, fuel, water, gas, steam, refrigerant or other services caused by an OCCURRENCE not at the premises described in the declarations. 25. Settling, shrinking, cracking, expansion or contraction in foundations, walls, floors, buildings, patios, walkways, driveways, roads, or ceilings. 26. Error, omission or deficiency in design, plans, specifications, engineering or surveying. 27. Faulty or defective workmanship, process, materials or supplies. E. GENERAL CONDITIONS 1. Observance of Conditions Full compliance with all terms and conditions of this Policy by the INSURED shall be a condition precedent to any liability of the COMPANY to make payment for loss covered under this Policy. 2. Misrepresentation & Fraud This Policy shall be void if the INSURED has concealed or misrepresented any material fact(s) or circumstance(s) concerning this insurance or the subject thereof, or in case of any fraud, attempted fraud or false swearing by the INSURED touching any matter relating to this insurance or the subject thereof, whether before or after a loss. 3. Inspection & Audit While this Policy is in effect, the COMPANY can, at any reasonable time, inspect the INUSRED'S property and operations. However, any recommendations or information provided as a result of such inspection(s) is not intended as a substitute for advice from a safety expert or legal counsel the INSURED may retain for their intended purpose(s). It is not intended to satisfy any legal duty the INSURED may have to provide a safe premises, workplace, product or operation. The COMPANY may also examine and audit the INSURED'S books and records at any reasonable time during the Policy period, and within one year after the final termination of the Policy, as long as they relate to the subject matter of this Policy. 4. Examination Under Oath The INSURED shall submit and, so far as is within their power, shall cause all other persons to submit, to examination or examinations under oath by any persons named by the COMPANY relative to any and all matters in connection with a claim, and shall produce for examination all books of account, bills, invoices, and other vouchers or certified copies thereof if originals are ACE0447 (11/08) Copyright 0 2008 99 Page 8 of 15 lost, at such reasonable time and place as may be designated by the COMPANY or its representatives as often as the COMPANY deems necessary, and shall permit extracts and copies thereof to made. 5. In Case of Loss a. Notice of OCCURRENCE: The INSURED will, as soon as practicable, report in writing to the COMPANY every OCCURRENCE that may give rise to a claim under this Policy. b. Proof of Loss: The INSURED will as soon as practicable, file with the COMPANY a signed and sworn detailed proof of loss. c. Payment of Loss: All adjusted claims will be due and payable no later than sixty days after presentation and acceptance of proof of loss by this COMPANY. 6. Subrogation If the COMPANY pays a claim under this Policy, it will be subrogated, to the extent of such payment, to all the INSURED'S rights of recovery from other persons, organizations and entities. The INSURED will execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The COMPANY will have no rights of subrogation against: a. any person or entity, which is an Additional Insured; b. any other person or entity, against which the INSURED has waived its rights of subrogation in writing before the time of loss. Notwithstanding the foregoing, it is a condition of this Policy that the COMPANY shall be subrogated to all the INSURED'S rights of recovery against: a. Any Architect or Engineer, whether named as an INSURED or not, for any loss or damage arising out of the performance of professional services in their capacity as such and caused by any error, omission, deficiency or act of the Architect or Engineer, by any person employed by them or by any others for whose acts they are legally liable, and; b. Any manufacturer or supplier of machinery, equipment or other property, whether named as an INSURED or not, for the cost of making good any loss or damage which said party has agreed to make good under a guarantee or warranty, whether expressed or implied. The INSURED will act in concert with the COMPANY and all other interests concerned in the exercise of such rights of recovery. If any amount is recovered as a result of such proceedings, the net amount recovered after deducting the costs of recovery, will accrue first to the COMPANY in proportion to their respective interests. Any excess of this amount will be remitted to the INSURED. If there is no recovery, the interests instituting the proceedings will bear the expense of the proceedings proportionately. ACE0447 (11/08) Copyright ©2008© Page 9 of 15 The INSURED will do nothing after loss to prejudice such rights of subrogation. 7. Recovery and Salvage Any recovery or salvage will apply as if recovered or received prior to the loss settlement and the loss or damage will be readjusted accordingly, except for: a. proceeds from subrogation and other insurance recovered or received after a loss settlement under this Policy; b. any recovery from suretyship, insurance, reinsurance, security or indemnity taken by or for the benefit of the COMPANY. 8. Contributing Insurance Permission is granted for other policies written upon the same plan, conditions, and provisions as those contained herein. This Policy will contribute to the total of each loss otherwise payable herein to the extent of the participation of this Policy in the total limit of liability, as provided by all policies written upon the same plan, conditions, and provisions as those contained in this Policy. The adjustment of losses by any contributing insurance COMPANY is not binding on any other contributing insurance COMPANY. 9. Excess Insurance Permission is granted the INSURED to have excess insurance over the limit of liability set forth in this Policy without prejudice to this Policy, nor will the existence of such insurance, if any, reduce any liability under this Policy. 10. Other Insurance Except as stated in the CONTRIBUTING INSURANCE and EXCESS INSURANCE provisions of this Policy, if there is other insurance which is issued by another valid Policy or Policies of insurance, whether primary or excess, whether collectible or not, this Policy will apply as excess insurance and will not contribute with such other insurance, nor shall the COMPANY be liable to make any payment in connection with any such portion of a claim or suit. 11. Reduction of Limits of Insurance With the exception of direct physical loss or damage caused by perils which are subject to annual aggregate limits, any loss or damage hereunder will not reduce the amount of this Policy. 12. Brands & Trademarks In any case of direct physical loss or damage by an insured peril to insured property bearing a brand, trademark or label, the COMPANY may take all or any part of the property at any agreed or appraised value. If so, the INSURED may, at its own expense: a. Stamp salvage on the property or its container, if the stamp will not physically damage the property; or ACE0447 (11/08) Copyright 0 2008 ® Page 10 of 15 b. Remove the brand, trademark or label if doing so will not physically damage the property. The INSURED must re -label the property or its container to comply with the law. 13. Pair & Set a. In the event of direct physical loss of or damage to any insured article or articles which are part of a pair or set, the measure of loss of or damage to such article or articles will be a reasonable and fair proportion of the total value of the pair or set, giving consideration to the importance of said article or articles, but in no event will such loss or damage be construed to mean total loss of the pair or set, or b. In the event of loss or damage to any part of property insured consisting, when complete for use, of several parts, the COMPANY will only be liable for the value of the part lost or damaged. 14. Appraisal If the INSURED and the COMPANY fail to agree as to the amount of loss or damage, each shall, on the written demand of either, made within sixty (60) days after receipt of proof of loss by the COMPANY, select a competent and disinterested appraiser, and the appraisal shall be made at a reasonable time and place. The appraisers shall first select a competent and disinterested umpire, and failing for fifteen (15) days to agree upon such umpire, then on the request of the INSURED or the COMPANY, such umpire shall be selected by a judge of a court of record in the State in which such appraisal is pending. The appraisers shall then appraise the loss, stating separately the value of Covered Property in accordance with the Valuation Clause at the time of loss and the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. The INSURED and the COMPANY shall each pay his or its chosen appraiser and shall bear equally the other expenses of the appraisal and umpire. The COMPANY shall not be held to have waived any of its rights by any act relating to appraisal. 15. Valuation At the time and place of loss, the basis of adjustment of a claim, unless otherwise endorsed herein, shall be as follows: a. Buildings and Structures — The replacement cost new if actually replaced, if not so replaced, ACTUAL CASH VALUE. b. Property of Others (Including Items Supplied by the Owner) — The Owner's cost or other ACTUAL CASH VALUE, whichever is greater, including the contractor's charges. c. Temporary Works — The cost to repair or replace the property lost or damaged with material of like kind, quality and condition but in the event not replaced recovery will not exceed ACTUAL CASH VALUE. d. Valuable Papers and Records - The cost to reproduce the property with other property of like kind and quality including the cost of gathering or assembling information from back up data if replaced, or if not replaced, at the value of blank material; e. ELECTRONIC MEDIA or ELECTRONIC DATA shall be valued at the cost of the blank media, plus the costs of copying or restoring ELECTRONIC DATA from back-up or from originals of a previous generation, not including research and engineering or the costs or expense of recreating, gathering or assembling such ELECTRONIC DATA. ACE0447 (11/08) Copyright ® 2008 0 Page 11 of 15 This Policy does not insure any amount pertaining to the value of such ELECTRONIC DATA to the INSURED or any other party, even if such ELECTRONIC DATA cannot be recreated, gathered or assembled. If not repaired, replaced or restored, ELECTRONIC MEDIA shall be valued at the cost of the blank media. The COMPANY will use the REPLACEMENT COST provided that the INSURED actually repairs or replaces the lost or damaged property, or begins to repair the damaged covered property, within 24 months from the date of loss or damage; otherwise, the COMPANY will pay for losses to covered property by the ACTUAL CASH VALUE. 16. Loss Payable Any individual or organization maintaining a valid financial interest in property insured hereunder where such financial interest is secured through a debt instrument, including a loan or trust certificate, will be considered a Loss Payee for purposes of this Policy; providing however, and as a condition precedent to qualification hereunder as Loss Payee, that such debt instrument be executed prior to any loss or damage to such property insured hereunder and providing any such Loss Payee interest in property insured hereunder is specifically identified by the INSURED to the COMPANY at the time loss or damage to the property insured hereunder is reported to the COMPANY; however, not later than the time any sworn Proof of Loss is submitted to the COMPANY. 17. Territory This Policy covers within the fifty (50) states comprising the United States of America, including the District of Columbia and Canada, except that we will not cover property in transit by water or air to and from Alaska or to and from Hawaii. 18. Assignment The INSURED agrees not to assign and/or transfer any legal rights or interests in the Policy without the COMPANY'S written consent. 19. Benefit to Bailee The Policy will not inure, directly or indirectly, to the benefit of any carrier or bailee. 20. Abandonment There will be no abandonment of any property to the COMPANY. 21. Suit Against Company No suit or action on this Policy for the recovery of any claim will be sustainable in any court of law or equity, unless the INSURED will have fully complied with all the requirements of this Policy. Any action or proceeding against the COMPANY for recovery of any loss or damage under this Policy must be commenced within twelve months after the occurrence of the loss or damage, unless a longer period of time is provided by applicable statute. 22. Cancellation ACE0447 (11/08) Copyright ®2008© Page 12 of 15 a. This Policy may be cancelled by the INSURED by mailing to the COMPANY written notice stating when, thereafter, such cancellation shall be effective. The COMPANY may cancel this Policy by mailing to the INSURED at the address shown in the Policy written notice stating when, not less than thirty (30) days thereafter, such cancellation will be effective. In the event of non-payment of premium, the COMPANY shall only be required to provide a ten (10) days notice of cancellation. The mailing of notice as aforementioned shall be sufficient proof of notice and the effective date of cancellation stated in the notice shall become the end of the Policy period. Delivery of such written notice either by the INSURED or by the COMPANY shall be equivalent to mailing. b. If the INSURED cancels, earned premiums will be calculated on a pro -rata basis. If the COMPANY cancels, the earned premium will be calculated on a short rate basis. c. Premium adjustment may be made at the time cancellation is effected and, if not then made, shall be made as soon as practicable after cancellation becomes effective. The COMPANY'S check or the check of its representative mailed or delivered as aforesaid shall be a sufficient tender of any refund of premium due to the INSURED. 24. Statutes If any of the provisions of this Policy conflict with the laws or statutes of any jurisdictions in which this Policy applies, the provisions of this Policy shall be amended to conform to such laws or statutes. 25. Protection of Property The INSURED will take reasonable steps to protect, recover or save the property insured and minimize any further or potential loss or damage when the property insured has sustained direct physical loss or damage by an insured peril. The acts of the INSURED or the COMPANY in protecting, recovering or saving the property insured will not be considered a waiver or an acceptance of abandonment. The INSURED and the COMPANY will bear the reasonable expense incurred proportionate to their respective interests under this Policy. 26. Sub -limits of Insurance The Sub -limits of Insurance in Item II of the Declarations shall apply to all extensions and/or coverages provided therein, including any Loss of Revenue Coverage, if purchased and/or endorsed to this Policy, except that the coverage provided by this Policy as respects the perils of EARTH MOVEMENT, NAMED WINDSTORM and FLOOD shall be subject to the annual aggregate Sub -limits of Insurance shown in Item II of the Declarations. 27. Certificates of Insurance Any Certificate of Insurance issued in connection with this Policy shall be issued solely as a matter of convenience or information for the addressee(s) or holder(s) of said Certificate of Insurance. This Policy may only be modified by endorsement issued by the COMPANY. G. DEFINITIONS The following definitions will be applied in the interpretation of certain wording used herein: 1. NAMED WINDSTORM Any windstorm or weather disturbance assigned a name by the National Weather Service, Insurance Service Offices, or any other recognized meteorological authority. ACE0447 (11/08) Copyright 0 2008 0 Page 13 of 15 2. EARTH MOVEMENT All earthquake, landslide, mudslide, mudflow, volcanic eruption, earth sinking (other than sinkhole collapse), rising, shifting, mine subsidence, or other earth movement, whether observable or not observable, and whether man-made or caused by natural phenomena. 3. FLOOD A condition of inundation of normally dry areas, including dewatered areas, that results from; Rainfall and resultant runoff, rising water, surface water, storm surge, waves, tidal water, tidal wave or tsunami, all whether driven by wind or not, and/or; The overflowing of any breach of streams, rivers, lakes, reservoirs or other bodies or water; or spray from any of the foregoing, all whether driven by wind or not. 4. CONTAMINANTS OR POLLUTANTS Any material which after its release can cause or threaten damage to human health or human welfare or causes or threatens damage, deterioration, loss of value, marketability or loss of use to property insured hereunder, including, but not limited to, bacteria, mold, fungi, virus, or hazardous substances as listed in the Federal Water Pollution Control Act, or as designated by the U.S. Environmental Protection Agency. 5. INSURED The person(s) or company(ies) identified on the Declaration pages of this Policy. 6. OCCURRENCE OCCURRENCE means all losses or damages that are attributable directly or indirectly to one cause, event, incident or repeated exposure to the same cause, event or incident, or to one series of similar causes, events, incidents or repeated exposures to the same cause, event, or incident first occurring in the policy period. All such losses and/or damages and the total amount of such losses and/or damages will be treated as one occurrence regardless of the period of time or area over which such losses and/or damages occur, unless a specific period of time is otherwise set forth herein. The most the COMPANY will pay for loss or damage in any one OCCURRENCE is the applicable Limit of Insurance shown in Item II. A. of the Declarations. Each direct physical loss or damage caused by EARTH MOVEMENT and/or FLOOD will constitute a single OCCURRENCE. If more than one EARTH MOVEMENT and/or FLOOD occurs within any period of 72 hours during the term of this Policy, the INSURED may elect the moment when the 72 hour period will begin. This extension does not insure loss or damage caused by any EARTH MOVEMENT or FLOOD first occurring before the inception date and time of this Policy, nor for any loss first occurring after the expiration date and time of this Policy. 7. WATER DAMAGE All water damage, except damage caused by or resulting from the peril of FLOOD. 8. ELECTRONIC DATA ACE0447 (11/08) Copyright 0 2008 12 Page 14 of 15 Facts, concepts, information or data, including compilations thereof, in a form useable or intended for use or processing by COMPUTERS or for storage on ELECTRONIC MEDIA. ELECTRONIC DATA includes but is not limited to files, programs, applications, operating systems, and other coded instructions for the processing, calculation and storage of facts, concepts and information by COMPUTERS. 9. ELECTRONIC MEDIA Any physical device that holds, stores, contains or transfers ELECTRONIC DATA, and includes but is not limited to disks, drives, films, tapes, records, drums, or cells. 10. COMPUTERS Includes but is not limited to mainframes, servers, workstations and portable computers, personal information managers, wide and local area network hardware, electronic and electromechanical equipment, data processing equipment, electronic controls for machinery, electronically programmed memory chips, and electronically controlled communication equipment. 11. COMPUTER VIRUS Instructions, code, applications or any software program that has the ability or is suspected to have the ability to damage, destroy, erase, corrupt, alter, or prevent access to ELECTRONIC DATA, ELECTRONIC MEDIA or COMPUTERS or to disrupt or interfere with the operations of COMPUTERS. 12. REPLACEMENT COST The cost to repair or replace the property lost or damaged at the time and place of loss with material of like kind and quality. 13. ACTUAL CASH VALUE The original cost to purchase and install the property lost or damaged, less a deduction for depreciation. 14. COMPANY COMPANY means the insurer shown on the Declarations. 15. VALUES AT RISK AT TIME OF LOSS Values at risk at time of loss means the value of all Covered Property on the date of loss. ACE0447 (11/08) Copyright ® 2008 © Page 15 of 15