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Insurance-Robert Thornton-2013-09-26A�� ° CERTIFICATE OF LIABILITY INSURANCE 09a6)2013 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the tends and conditions of the policy, certain policies may require an endorsement. A statement on this certificate doss not confer rights to the certificate hostler in lieu of such ondorsamerd(s). PRODUCER JEFF BAKER STATE FARM INSURANCE Siateiarm4952 WARNER AVENUE SUITE 250 J6. HUNTINGTON BEACH, CA 92649 -5521 HANE JEFF BAKER PHONE 14.846.5548 FAx Ro:714. .4 6M UL ADORE __ __ NSURERSIAPTORdNCCOVERAGE NAICs __ _ INSURER A: State Farm Geneml Insurance Cornpany I 25151 INSURED ROBERTATHORNTON LAURA THORNTON 28611 RANCHO GRANDE LAGUNA NIGUEL. CA 92677 -7418 INSURER 8: W1312013 INSURSAC: _ RNSURERD: _ -- PREMISE$ Ee NTEDnte INSUREaE MED EXP(AR on. permn) INSURETIF: PERSONAL B ADV INJURY UUVCKAUES UCK I IMCA I E NUMNEKe SPVICIINU MI INOCC. THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POUCY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. RSTRR L TYPE OF INSURANCE L went POLICY NUMBER POIJCYEFF PVIOD EXP ums OENER/J. LIABILITY COMMERCIAL GENERAL LIABILITY CWMS -MADE OCCUR 92- CF- Y599 -7 W1312013 M1312014 EACH OCCURRENCE $ PREMISE$ Ee NTEDnte MED EXP(AR on. permn) s _ 5,0_00 PERSONAL B ADV INJURY $ GENERALAGGREGATE $ 2,000,000 GENL AGGRE ,L,1 IT APPLIES PER. POLICY PE , LOC PRODUCTS - COMFMP AGG $ Business Liability $ 1,000,000 AUTONORILEUAeIOTV ANY AUTO ALL OWNED SCHEDULED AUTOS _AUTOS HIRED AUTOS AUT S�BED 3774895- A01 -75 3774896- A01.75 0710112013 07101/2013 0110112014 0IM112014 COMBINED SINGLE LIMIT$ X BODILY INJURY (P., person] S 500000 BODILY INJURY Per axiJert ( 1 $ 500,0110 _ pROP —*5G0,000 $ MBRELLAUAB XCESS IJAa OCCUR CLALMSAIADE EACH OCCURRENCE S to AGGREGATE S ED RETENTION$ S LIABILITY WORK RS' ERS COMPENSATION AND EMPLOYLIABILITY ANY PROPRIETORIPARI'NERIEXECUnVE YIN OFFICEJMEMBEREXCLUDEM (MantlMOry In Np II yes, tlesWbe uMer NIA ❑ ATU- TIi- IN EL -EACH ACCIDENT - - - - -- i E.L. DISEASE - FA EMPLOYEE S E.L. DISEASE- POUCYLNT S DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES(AHeeh ACORD 101, Atltlhlonal Ra— Sehe4ule, Hnwn specs brputlrttll Costa Mesa Sanitary istrict SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE ry THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN 628 W. 19th Street ACCORDANCE WITH THE POLICY PROVISIONS. Costa Mesa, CA 92627 ®1908.2010 ACORD CORPORATION. All rights reserved. ACORD 25 (2010105) The ACORD name and logo are stared marks of ACORD 1001486 132849.8 01 -23 -2013 CE TIFICATE OF LIABILITY INSURANCE 77,13m 1 THIS CERTIFICATE IS ISSUED A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIR TFVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF SURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSUREWS), AUTHORIZED REPRESENTATIVE OR PRODUCE AND THE CERTIFICATE HOLDER. IMPORTANT: I lhscertiftateN r is an ADDITIONAL INSURED, the policylieal must deandptsed. I SUBROGATION IS WAIVED, subject to the terms and condWan& al the polio , certain policies may require an endoreernollt. A statsrnent on this cortlNrate does not Confer rights to the YOOU4�" JEFF BAKER x ME -' JEFF BAKER STATE FARM INSU NCE PNONE 714- 11165548 — - iNP• 1a FRIAL Stateftm 4962 WARNER AVEN JE SUITE 250 AQORE°°• JL. HUNTINGTON BEAC , CA 92649 -5521 MaunFArFOR01XGC WRAGE NA:R MS URER A: SLIFIR FINFU RMNM—I InlyranCe C 1 INSURED ROBERT THORNTOI ARCHITECTS, INC R+FURERF: 28611 RANCHO GW NEE INSUNERC: LAGVNANIGUEL,C 92677 -7418 -- wSDRFRE: �- COVFRAGFS FRTIFICATF MIMRFR• oNIQIfw ultAR4F»• THIS IS TO CERTIFY THAT THE POLICIES INDICATED, NOTWITHSTANDING ANY CERTIFICATE MAY BE ISSUED OR M EXCLUSIONS AND CONDITIONS OF SU OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WRH RESPECT TO WHICH THIS NY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, CH POUCIES. LIMITS SHOIAM MAY HAVE BEEN REDUCED BY PAID CLAIMS, A tO U ° 1.11013 oFamu usexm COLw1E tM=IEID LIA"IUTY CLA°dSMAOE X ; OCCUR I I 92- CF -Yin-3 OV311f012 9M V2014 FACHOCCURRENCE s 1,000,006 PR f_ NFO F,%P py,y ore S 500 PERBONALe AOV IMAW 5 ' i� GENENALAGGREGATE F 2,0001000 OERL AOGREaArE POLICY L IMITAPPLIES PER F I MT LOO PRcx1UCT8- C0MP/OPAOG S 2.000.000 S TaYAUTO UADR1rY IaMIEO A�IiTOSULEO AUT08 AUTO7 -OWNED I 0001LY114URYlP>Parav4 S eOOILY m4uWtAwaEr aadaa,RO E -.a _ t DMBREW LUI6 EXCESS DAe OCCUR H.... E EACH OCCURRENCE S AGGREGATE - S DEO PETEN ION3 9 WORNARB CONPFPIul" AND ENIKOYERY UABIUIY ANY PROPRIETCIWARTNEREXEumVE Y OFFfCFJNENeER FX0.U0EO! INIIHa nIn NN7 If yea, CuFMUMr " NIA VC A or TORY LINES EL EACH ACCIDENT _ S E.L DISEASE - EA FMPLOYEE S E.t.DEEAII SE- Pq.ICY LMn — BUMNPSSrNOPPmY I 92•CF- Y599.3 arIt112013 Gen 0f201a M•100 aEDGreP1IDN OF OPEAATi0X81LOCATgNB! LE8(AWCh A00R01W,AASay,al RamaM1a aFl»nA,, Himnapacalsrap4adl I SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THF,NEOF, NorlCE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROV dIONS. L/ V 1888.2670 ACORD CORPORATION. All rights rsawmnsd. AGORRD 26 (201WGSy The ACORO name and logo are registered mar Xs of ACORD 1001486 132549.8 01.23-2013 Ur-ULAKAI IUN5 ARCHITECTS AND ENGINEERS PROFESSIONAL LIABILITY INSURANCE POLICY Renewal Of Policy National Casualty Company Policy Number AR00004713 Home office: AR00005084 16 North Carroll Street Suite 209 • M d' W' 5 a Ison, Isconsln 3703 -2,,83 Property /Casualty Division: DECLARATIONS 8877 North Gainey Center Drive • Scottsdale, Arizona 85258 1- 800 -423 -7675 A STOCK COMPANY ITEM 1. NAMED INSURED AND MAILING ADDRESS: Robert Thornton Architects, Inc, 28611 Rancho Grande Laguna Niguel, CA 92677 AGENT NAME AND ADDRESS: Euclid Managers 234 Spring Lake Drive Itasca, IL 60143 (630) 238 -1900 (630) 773 -8590 FAX Agent # 12528 ITEM 2. POLICY PERIOD From: 08/13/2013 To: 08/13/2014 12:01 A.M. Standard Time at the NAMED INSURED'S mailing address. ITEM 3. RETROACTIVE DATE: ........................................................ ............................... 08/1312012 ITEM 4. Limits of Liability: (A) Each CLAIM ................................................................... ............................... $1,000,000 (B) Annual Aggregate .......................................................... ............................... $1,000,000 ITEM S. DEDUCTIBLE: ....... ............. ........ ... $2,500 (Amount to be borne by Insured, including CLAIM EXPENSE) Annual Aggregate ITEM 6. Premium: ... .................... ... - . ....... I .. .... r .... ............... $5,017.00 ITEM 7. Notice of CLAIM shall be given to: National Casualty Company Claims Department Professional Liability Unit 8877 North Gainey Center Drive Scottsdale, Arizona 85258 ITEM B. Policy and Endorsements attached at inception: AR -J -3 (3 -03); AR -P -1 (3 -03); AR -86s (5 -03), AR -1225 (1 -09); AR -126s (8 -10); SC- 391 (8 -04); UT -414g (6 -11); NOTX0015CA (2 -00); NOTX0394CA (3 -12), NOTX0178CW (2 -06); UT -COVPG (12 -09), AR -APP -R (7 -07) THIS IS A CLAIMS MADE AND REPORTED POLICY. PLEASE READ IT CAREFULLY. Countersigned BR 08/13/2013 By a N &" DATE AUTHORIZED REPRESENTATIVE AR -D -1 (10 -99) National Casualty Company ENDORSEMENT NO. 1 ATTAINED TO AND FORMOVGAPARTOF ENDORSEMENT EFFECWE DATE POLICY NDMBER ( 1201 ) ! AM. STANDARDTIME NAMED INSURED AGENTNC, AR00005084 08/1312013 Robert Thornton Architects, Inc. 12528 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. DAMAGES DEFINITION AMENDATORY ENDORSEMENT Definition 4. DAMAGES contained in the DEFINITIONS section of the policy is deleted in its entirety and is re- placed by the following: 4. DAMAGES —means a monetary judgment, award or settlement. DAMAGES do not include: a. Civil or criminal fines, sanctions, restitution or penalties, whether pursuant to any civil or criminal law or statute; b. Amounts paid to YOU as fees, costs or ex- penses for services performed which are to be reimbursed or discharged as part of the judgment or settlement; or c. Punitive damages, exemplary damages or any damages which are a multiple of com- pensatory damages awarded against YOU, including without limitation double or treble damages. I/We hereby understand, acknowledge and accept the terms of this endorsement. (Signature is not required if attached at the original inception date of policy.) SIGNATURE OF PARTNER, OFFICER OR SOLE PROPRIETOR TYPE NAME OF PARTNER, OFFICER OR SOLE PROPRIETOR AR -86s (5 -03) IHttlq N� AUTHORIZED REPRESENTATIVE DATE National Casualty Company ENDORSEMENT NO. 2 ATTACHED TO AND FORMINGAPARTOF ENDORSEMENT EFFECTNE DATE POLICY NUMBER 12:01 M. STANDARDTIME ( A t NAMEDINSURED AGENT NO AR00005084 08/13/2013 Robert Thornton Architects, Inc. 12528 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. A.D.A., F.F.H.A. AND O.S.H.A. SUPPLEMENTAL PAYMENTS ENDORSEMENT The following is added to the SUPPLEMENTAL PAYMENTS section of the policy: WE will pay, in addition to OUR Limit of Liability: Up to $35,000 per POLICY PERIOD for the reimbursement of YOUR legal fees incurred as a result of a WRONGFUL ACT which gives rise to a regulatory or administrative action under the Americans with Disabilities Act (A.D.A.), the Federal Fair Housing Act (F.F.H.A.) or the Occupational Safety and Health Act (O.S.H.A.), which is commenced directly against YOU and results from the performance of YOUR PROFESSIONAL SERVICES, which were performed subsequent to the RETROACTIVE DATE stated in Item 3. of the Declarations. WE will not pay DAMAGES, fines, taxes or penalties pur- suant to this provision. I/We hereby understand, acknowledge and accept the terms of this endorsement. (Signature is not re- quired if attached at the original inception date of policy.) SIGNATURE OF PARTNER, OFFICER OR SOLE PROPRIETOR TYPE NAME OF PARTNER, OFFICER OR SOLE PROPRIETOR AR -122s It -09) N� AUTHORIZED REPRESENTATIVE Page 1 of 1 DATE DATE National Casualty Company ENDORSEMENT NO. 3 ATTACHED TDAND FORMING F ENDORSEMENT EFFECTIVE DATE LI UMBER POLICY NUMBER ( 1201 AM t :. STANDARDTIME NAMED INSURED AGENT ND . AR00005084 08/1312013 Robert Thornton Architects, Inc 12528 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. SUPPLEMENTAL PAYMENTS FOR PRIVACY REGULATION AND IDENTITY PROTECTION For the purposes of this endorsement only: WRONGFUL ACT —means injury arising out of a 1. The following is added to the SUPPLEMENTAL violation of a right of privacy or a PRIVACY REGU- PAYMENTS section of the policy: LATION in the performance of PROFESSIONAL SERVICES as a result of: WE will pay, in addition to OUR Limits of Liability: a. up to $25,000 during the POLICY PERIOD to re- imburse YOU for investigation, remediation, de- velopment or improvement of YOUR network security systems to address any network security issues raised; b. up to $10,000 per person with an aggregate of $250,000 during the POLICY PERIOD to reim- burse YOU for any sums that YOU become legal- ly obligated to pay as DAMAGES; c. up to $12,500 during the POLICY PERIOD to re- imburse YOU for attorney fees, attorney costs and court costs YOU incur; as a result of a CLAIM first made against YOU and reported to US in writing during the POLICY PERIOD or Extended Reporting Period (if applicable) for a WRONGFUL ACT as defined in this endorsement. Each of the payment limits stated in the above SUP- PLEMENTAL PAYMENTS is the maximum amount payable during the POLICY PERIOD for all of YOU regardless of the number of CLAIMS and is in addi- tion to the Annual Aggregate Limit of Liability as set forth in the Declarations. No DEDUCTIBLE shall apply to the above SUPPLE- MENTAL PAYMENTS. 2, The Definition of WRONGFUL ACT(S) contained in the DEFINITIONS section of the policy is deleted in its entirety and is replaced by the following: a. a breach of the Insured's network security, through hacking, mismanagement, and /or loss or theft of PERSONAL INFORMATION, computer hardware, software or personal digital assistant; b. the loss or theft of PERSONAL INFORMATION or data about any client which is in YOUR care, custody or control. This includes, without limita- tion, loss or theft from any computer, computer system, network or website that is in YOUR care, custody or control; and C. YOUR failure to prevent unauthorized access to information that has been provided to YOU by another, or created by YOU for another where such information is subject to the terms of a writ- ten confidentiality agreement obligating YOU to protect such information on behalf of another. 3. The following Definitions are added to the DEFINI- TIONS section of the policy: AR -126s (8 -10) Pagel of 2 PERSONAL INFORMATION —means an individual's identity with any one or more of the following: a. social security number; b. medical or healthcare data, or other protected health information; c. drivers license number or state identification number; d. account number, credit card number or debit card number in combination with any required security code, access code or password that would permit access to that individual's financial account; or e. other nonpublic PERSONAL INFORMATION as defined in a PRIVACY REGULATION. PRIVACY REGULATION —means state, federal, and foreign identity theft and privacy protection legislation, statutes and regulations (including but not limited to All other policy terms and conditions apply. the Health Insurance Portability and Accountability Act, as amended and the Gramm - Leach - Bliley Act, as amended) associated with the control or use of per- sonally identifiable financial, medical or other sensi- tive information that requires commercial entities that collect PERSONAL INFORMATION to post privacy policies, adopt specific privacy controls, or notify indi- viduals in the event that PERSONAL INFORMATION has potentially been compromised. �N AUTHORIZED REPRESENTATIVE AR -126s (8 -10) Page 2 of 2 DATE National Casualty Company ENDORSEMENT NO. 4 ATTACHED TO AND FORMING F ENDORSEMENT EFFECTNE DATE POLICY NUMBER NUMBER 12;01 AM. STANDARD TIME ( I NAMED INSURED AGENT NO. AR00005084 08/1312013 Robert Thornton Architects, Inc. 12528 THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY, CHANGES - CALIFORNIA Condition 1. CANCELLATION of the CONDITIONS section of the policy is deleted in its entirety and is replaced by the following: 1. CANCELLATION. a. This policy may be canceled by the NAMED INSURED by surrendering the policy to US or any of OUR au- thorized agents or by mailing written notice to US stating when the cancellation is to be effective. b. If this policy has been in effect for sixty (60) days or less and is not a renewal, WE may cancel this policy for any reason by mailing or delivering written notice of cancellation, stating the reason for cancellation, to the NAMED INSURED and producer of record at least: (1) ten (10) days before the effective date of cancellation if WE cancel for nonpayment of premium as stated in 1.c.(1) or discovery of fraud as stated in 1.c.(2) below; or (2) sixty (60) days before the effective date of cancellation if WE cancel for any other reason. c. If this policy has been in effect for more than sixty (60) days, or this is a renewal of a policy WE issued, WE may cancel this policy only upon the occurrence, after the effective date of the policy, of one or more of the following: (1) Nonpayment of premium, including payment due on a prior policy WE issued and due during the current policy term covering the same risks; (2) Discovery of fraud or material misrepresentation by: (a) any of YOU or YOUR representative in obtaining this insurance; or (b) any of YOU or YOUR representative in pursuing a CLAIM under this policy; (3) A judgment by the court or an administrative tribunal that YOU have violated a California or Federal law, having as one of its necessary elements an act which materially increases any of the risks insured against; (4) Discovery of willful or grossly negligent acts or omissions, or any violations of state laws or regulations es- tablishing safety standards, by YOU or YOUR representative, which materially increase any of the risks insured against; (5) Failure by YOU or YOUR representative to implement reasonable loss control requirements, agreed to by the NAMED INSURED as a condition of policy issuance, or which were conditions precedent to OUR use of a particular rate or rating plan, if that failure materially increases any of the risks insured against; Includes copyrighted material of ISO Properties, Inc., with its permission. copyright, ISO Properties, Inc., 1999 SC- 396s -CA (8 -04) Page 1 of 3 (6) A determination by the Commissioner of Insurance that the: (a) loss of, or changes in, OUR reinsurance covering all or part of the risk would threaten OUR financial integrity or solvency; or (b) continuation of the policy coverage would: (i) place US in violation of California law or the laws of the state where the Company is domiciled; or (ii) threatens OUR security; or (7) A change by the NAMED INSURED or NAMED INSURED'S representative in the activities of the com- mercial enterprise, which results in a materially added, increased or changed risk, unless the added, in- creased or changed risk is included in the policy. d. WE will mail or deliver advance written notice of cancellation, stating the reason for cancellation, to the NAMED INSURED at the last mailing address known to US, and to the producer of record, if any, at least: (1) ten (10) days before the effective date of cancellation if WE cancel for nonpayment of premium as stated in 1.c.(1) or discovery of fraud as stated in 1.c.(2) above; or (2) sixty (60) days before the effective date of cancellation if WE cancel for any other reason listed in para- graph t.c. above. e. The mailing of notice as aforesaid shall be sufficient proof of notice of the intent to cancel. The date and hour of cancellation specified in the notice shall represent the time of termination of this policy. Actual delivery of such notice by US shall be equivalent to mailing. f. If this policy is canceled, WE will send the NAMED INSURED any premium refund due. If WE cancel, the re- fund will be pro rata. If the NAMED INSURED cancels, the refund will be the customary short rate proportion. WE will make the premium refund as soon as practicable after the date of cancellation. However, the premi- um refund is not a condition of cancellation. g. If notice is mailed, proof of mailing will be sufficient proof of notice. h. Notice of cancellation will only be sent to the NAMED INSURED and will serve as notice to all of YOU. Condition 2. NONRENEWAL of the CONDITIONS section of the policy is deleted in its entirety and is replaced by the fol- lowing: 2. NONRENEWAL. a. If WE refuse to renew this policy, WE will mail or deliver written notice, stating the reason for nonrenewal, to the NAMED INSURED and to the producer of record, if any, at least sixty (60) days before the end of the POLICY PERIOD. b. WE will mail or deliver the nonrenewal notice to the NAMED INSURED and to the producer of record, if any, at the last mailing addresses known to US. c. WE are not required to send notice of nonrenewal in the following situations: (1) If the transfer or renewal of a policy, without any changes in terms, conditions or rates, is between US and a member of OUR insurance group; (2) If the policy has been extended for ninety (90) days or less, provided that notice has been given in ac- cordance with paragraph c.(1) above; (3) If the NAMED INSURED has obtained replacement coverage, or if the NAMED INSURED has agreed, in writing, within sixty (60) days of the termination of the policy, to obtain that coverage; (4) If the policy is for a period of no more than sixty (60) days and the NAMED INSURED is notified at the time of issuance that it will not be renewed; Includes copyrighted material of ISO Properties, Inc., with its permission. Copyright, ISO Properties, Inc., 1999 SC- 396s -CA (8 -04) Page 2 of 3 (5) If the NAMED INSURED requests a change in the terms and conditions or risks covered by the policy within sixty (60) days of the end of the POLICY PERIOD; or (6) If WE make a written offer to the NAMED INSURED in accordance with the time frames shown in Para- graph c.(1) above, to renew this policy under changed terms or conditions or at an increased premium rate, when the increase exceeds twenty -five percent (25 %). d. If notice is mailed, proof of mailing will be sufficient proof of notice. The following Condition is added to the CONDITIONS section of the policy and supersedes any provision to the contrary: RENEWAL. a. If WE decide to renew this policy, WE will give notice of any increased premium rate which exceeds twenty -five percent (25 %), reduction of limits, elimination of coverages or increase in deductible to the NAMED INSURED and to the producer of record, if any, at least sixty (60) days, but not more than one hundred twenty (120) days prior to the policy expiration date, plus: (1) five (5) days for mailing to an addressee in California (sixty -five [65] to one hundred twenty -five [125] days); (2) ten (10) days for an addressee outside California (seventy [70] to one hundred thirty [1301 days); or (3) twenty (20) days for an addressee outside the U.S.A. (eighty [801 to one hundred forty [140] days). b. WE will mail or deliver its notice to the NAMED INSURED'S and producer of record's last mailing addresses known to US. If the notice is mailed, proof of mailing will be sufficient proof of notice. c. If the NAMED INSURED accepts the renewal, the premium increase or coverage changes will be effective the day following the end of the prior policy's POLICY PERIOD. d. If notice is not mailed or delivered according to the time requirements stated in paragraph a. above, the premium, deductible, limits and coverage in effect prior to the changes will remain in effect until: (1) sixty (60) days after notice is given; or (2) the effective date of replacement coverage obtained by the NAMED INSURED, whichever occurs first. l� REPRESENTATIVE DATE Includes copyrighted material of ISO Properties, Inc., with its permission. Copyright, ISO Properties, Inc., 1999 SC- 396s -CA (8 -04) Page 3 of 3 National Casualty Company ENDORSEMENT NO. 5 ATTACHED TO AND FORMING A PART OF ENDORSEMENT EFPEDTNE DATE POLICY NUMBER 02:01 AM. STANDARD TIME) NAMED INSURED AGENT NO AR00005084 08/13/2013 Robert Thornton ArchAects, Inc. 12528 THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY. CHANGES — DEFINITION OF SPOUSE Whenever found in this policy, the term "spouse" shall mean any natural person qualifying as a: 1. spouse; 2. domestic partner; 3. registered domestic partner; or 4. party to a civil union as may be recognized and defined under the provision of any applicable federal, state or local law. AUTHORIZED REPRESENTATIVE UT -414g (6 -11) Page 1 of 1 DATE ASCOTTSDALE INSURANCE COMPANY National Casualty Company Scottsdale Indemnity Company IMPORTANT INFORMATION FOR CALIFORNIA POLICYHOLDERS In the event you need to contact someone about this policy for any reason, please contact your agent first. If you have additional questions, you may contact the insurance company issuing this policy at the following address and telephone number: 8877 North Gainey Center Drive Scottsdale, Arizona 85258 Telephone: 1 -800- 423 -7675 If you have been unable to contact or obtain satisfaction from the company or agent, you may contact the California Insurance Department at: California Department of Insurance Consumer Affairs Unit 300 South Spring Street, 9th Floor, South Tower Los Angeles, California 90013 Telephone: 1- 800 - 927 -4357 or 213.897 -8921 (out of state) When contacting your agent, company or the Insurance Department, please have your policy number available. NOTX0015CA (2 -00) ASCOTTSDALE INSURANCE COMPANYO National Casualty Company Scottsdale Indemnity Company NOTICE TO CONSUMERS — PREMIUM REFUND DISCLOSURE — CALIFORNIA This disclosure is required by Section 481 of the California Insurance Code. Should your insurance policy be canceled, rejected or surrendered by you, any premium refund may be less than a prorated return of the "unearned premium," that is, the premium which corresponds to the un- expired time left on the policy period following such cancellation, rejection or surrender. The premium re- turn, if any, shall be the "unearned premium" less the usual "short rate" penalty wherein we keep ten percent (10 %) of the "unearned premium." NOTX0394CA (3 -12) A%�' SCOTTSDALE INSURANCE COMPANY® National Casualty Company Scottsdale Indemnity Company SCOTTSDALE �.� CLAIM REPORTING INFORMATION Your insurance policy has been placed with the Scottsdale Insurance Group, a subsidiary of the Nationwide Insurance Company. The Scottsdale Insurance Group is a reliable, service - oriented group of companies that will help protect you against certain losses. Our commitment to you is to provide fast, fair claim service. Promptly reporting an event that could lead to a claim, as required by your policy, helps us fulfill this commitment to you. Please refer to your policy for this and all other terms and conditions. To report a claim, you may contact the Scottsdale Insurance Group 24 hours a day, 7 days a week, by calling 1 -800- 423 -7675 or via our Web site at www.scottsdaleins.com. Thank you for your business and as always, we appreciate the opportunity to serve you. HOW TO REPORT A CLAIM Call 1 -800- 423 -7675 or visit our Web site at www.scottsdaloins.com In order to expedite this process, please be prepared to furnish as much of the following information as possible: • Your policy number • Date, time and location of the loss /accident • Details of the loss /accident • Name, address and phone number of any involved parties • If applicable, name of law enforcement agency or fire department along with the incident number Please refer to your policy for specific claim reporting requirements. NOTX0178CW (2 -06) National Casualty Company Home Office: Madison, Wisconsin Administrative Office: 8877 North Gainey Center Drive - Scottsdale, Arizona 85258 1- 800 - 423 -7675 A STOCK COMPANY In Witness Whereof, the Company has caused this policy to be executed and attested. Secretary 0 M0 � � President The information contained herein replaces any similar information contained elsewhere in the policy. UT -0OVPG (12 -09) National Casualty Company Madison, Wisconsin Property /Casualty Home Office 8877 North Gainey Center Drive • Scottsdale, Arizona 85258 A STOCK COMPANY Architects and Engineers Professional Liability Insurance Claims Made and Reported Policy THESE POLICY PROVISIONS, WITH THE APPLICATION, DECLARATIONS AND ENDORSEMENTS, IF ANY, ISSUED TO FORM A PART THEREOF, COMPLETE THIS POLICY. AR -J -3 (3 -03) National Casualty Company A Stock Insurance Company, herein called the Company ARCHITECTS AND ENGINEERS PROFESSIONAL LIABILITY INSURANCE POLICY THIS IS A CLAIMS MADE AND REPORTED POLICY. Coverage is limited to only those CLAIMS that are first made against YOU and reported to US during the POLICY PERIOD or Extended Reporting Period, if applicable, as a result of any WRONGFUL ACT or POLLUTION INCIDENT which occurred prior to the end of the POLICY PERIOD. However, if the renewal policy is written by US, YOU will have sixty (60) days after the expiration date of this policy to report any CLAIM first made in this POLICY PERIOD. INSURING AGREEMENT WE will pay DAMAGES which YOU become legally obligated to pay and CLAIM EXPENSE, as a result of CLAIM(S) first made against YOU and reported to US in writing during the POLICY PERIOD or Extended Report- ing Period, if applicable, provided that: 1. The WRONGFUL ACT or POLLUTION INCIDENT giving rise to the CLAIM occurred on or after the RETROACTIVE DATE shown in the Declarations and before the end of the POLICY PERIOD; 2. Notice of the WRONGFUL ACT or POLLUTION INCIDENT was not given nor required to be given to any prior insurer; and 3. Prior to the inception date of the first policy issued to YOU by US and continuously renewed by US, YOU had no reasonable basis to believe that such WRONGFUL ACT or POLLUTION INCIDENT had been committed or that a CLAIM would be made against YOU alleging such WRONGFUL ACT or POLLUTION INCIDENT. DEFENSE WE have the right and duty to defend any suit against YOU seeking DAMAGES because of a WRONGFUL ACT or POLLUTION INCIDENT even if any of the alle- gations in the suit are groundless, false or fraudulent. WE have the right to appoint counsel and investigate any CLAIM or suit. However, WE will not settle or com- promise a CLAIM or suit without YOUR written consent. If consent is refused and YOU elect to contest the CLAIM or continue legal proceedings, then OUR liability for the CLAIM will not exceed the amount for which the CLAIM could have been settled, plus CLAIM EXPENSE incurred up to the date of YOUR refusal. If the allegation(s) is excluded under this policy, there shall be no duty to defend such CLAIM. WE are not obligated to pay any DAMAGES or CLAIM EXPENSE or defend any suit after the applicable limits of OUR liability have been exhausted by payment of DAMAGES or CLAIM EXPENSE. WE have the right, but no duty, to appeal any judgment. YOU, except at YOUR own cost and for YOUR own account, will not: 1. Make any payment; 2. Admit any liability; 3. Settle any CLAIM; 4. Assume any obligation; or 5. Incur any expense without OUR written consent. SUPPLEMENTAL PAYMENTS WE will pay, in addition to OUR Limit of Liability: 1. All costs taxed against YOU in any suit WE defend. 2. Interest only on that part of any judgment which does not exceed OUR Limit of Liability, which ac- crues after the entry of the judgment and before WE have paid, offered to pay, or deposited in court that part of the judgment that does not exceed OUR Limit of Liability. 3. Premium on appeal bonds required in any suit WE defend and the cost of attachment or similar bonds. 4. Up to $500 to each of YOU for each day or part of the day for YOUR attendance at a trial, hearing or arbitration proceeding at which WE request YOUR attendance. The maximum amount payable by US during the POLICY PERIOD shall not exceed $5,000 in the aggregate. The DEDUCTIBLE shown on the Declarations does not apply to the expendi- tures WE incur under this provision. AR -P -1 (3 -03) Page 1 of 9 TERRITORY DAMAGES do not include: This policy applies to WRONGFUL ACTS which happen a. Civil or criminal fines, sanctions, restitution or anywhere in the world. DAMAGES and CLAIM EX- penalties, whether pursuant to any civil or crimi- PENSE will be paid in U.S. currency. nal law or statute; b. Amounts paid to YOU as fees, costs or ex- penses for services performed which are to be DEFINITIONS reimbursed or discharged as part of the judg- ment or settlement; or Whenever used in this policy, the following words have these meanings: c. Punitive damages, exemplary damages or any damages which are a multiple of compensatory 1. AUTO —means a land motor vehicle, trailer or semi- damages awarded against YOU, including dou- trailer designed for travel on public roads, including ble or treble damages. However, WE will provide any attached machinery or equipment. AUTO does limited coverage to YOU to pay for punitive not mean or include MOBILE EQUIPMENT. damages, exemplary damages or any damages 2. CLAIM(S�—means an oral or written demand for which are a multiple of compensatory damages monetary damages from any party whose intent it is at a maximum Limit of Liability of: to hold YOU responsible for any WRONGFUL ACT (1) $250,000 each CLAIM and $250,000 An- or POLLUTION INCIDENT in performing PROFES. nual Aggregate; or SIONAL SERVICES. CLAIM also means YOUR knowledge of circumstances which could reasonably (2) The each CLAIM Limit and Annual Aggre- be expected to give rise to such demand. YOU must gate Limit shown on the Declarations, tell US of such CLAIM(S) or circumstances in writing whichever is less. during the POLICY PERIOD or Extended Reporting Period. Demand includes, but is not limited to, ser- The Limit of Liability referenced above in (1) and vice of suit, institution of arbitration proceedings, or (2) for each CLAIM is the maximum limit WE will MEDIATION. pay for all punitive damages, exemplary dam- ages or any damages which are a multiple of 3. CLAIM EXPENSE —means expenditures including, compensatory damages arising out of each but not limited to: CLAIM. The Limit of Liability referenced in (1) a. All expense of lawyers we are required by law to and (2) above for Annual Aggregate is the pay to defend YOU; maximum limit WE will pay for all punitive dam- ages, exemplary damages or any damages b. Costs of investigations; which are a multiple of compensatory damages c. Experts; during each POLICY PERIOD. d. Court costs; and Payment for these damages will only be made in conjunction with a CLAIM that is otherwise cov- e. Other similar expenses WE incur in the investi- ered by this policy. Any payments made by US gation, adjustment, defense or appeal of a under this provision will be included within the CLAIM or suit. applicable Limit of Liability and not in addition to CLAIM EXPENSE does not include: the policy limits. (1) Salary, charges or expenses of OUR regular 5. DEDUCTIBLE —means the amount YOU must pay employees; and for DAMAGES and CLAIM EXPENSE. (2) Payments made under the Supplemental 6. HOSTILE FIRE —means a fire that becomes uncon- Payments provision of this policy. trollable or breaks out from where it was intended to be. 4. DAMAGES —means a monetary judgment, award or settlement. 7, MEDIATION —means non-binding intervention b a g Y neutral third party. AR -P -1 (3 -03) Page 2 of 9 8. MOBILE EQUIPMENT —means any of the following types of land vehicles, including any attached ma- chinery or equipment: a. bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads, b. vehicles maintained for use solely on or next to premises YOU own or rent; c. vehicles that travel on crawler treads; d. vehicles, whether self- propelled or not, main- tained primarily to provide mobility to perma- nently mounted: (1) power cranes, shovels, loaders, diggers or drills; or (2) road construction or resurfacing equipment such as graders, scrapers or rollers; e. vehicles not described in a., b., c, or d. above that are not self - propelled and are maintained primarily to provide mobility to permanently at- tached equipment of the following types: (1) air compressors, pumps and generators, in- cluding spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment; or (2) cherry pickers and similar devices used to raise or lower workers; f. Vehicles not described in a., b., c, or d, above maintained primarily for purposes other than the transportation of persons or cargo. However, self - propelled vehicles with the follow- ing types of permanently attached equipment are not MOBILE EQUIPMENT, but will be con- sidered AUTO(S): (1) equipment designed primarily for: (a) snow removal; (b) road maintenance, but not construction or resurfacing; or (c) street cleaning; (2) cherry pickers and similar devices mounted on an AUTO or truck chassis and used to raise or lower workers; and (3) air compressors, pumps and generators, in- cluding spraying, welding, building cleaning, geophysical exploration, lighting and well servicing equipment. 9. NAMED INSURED —means the person, entity or organization named in Item 1. of the Declarations. 10. POLICY PERIOD —means the period of one year following the effective date and hour of this policy or, if the time between the effective date and the termi- nation of the policy is less than one year, such lesser period. 11. POLLUTANTS —means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, va- por, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, re- conditioned or reclaimed. POLLUTANTS does not mean heat, smoke, vapor, soot or fumes from a HOSTILE FIRE or explosion. 12. POLLUTION INCIDENT —means any actual or alleged negligent act, error or omission YOU or any person or entity, including Joint Ventures, for whom YOU are legally responsible, commits, but only in the performance of PROFESSIONAL SERVICES that results in the actual or alleged discharge, dis- persal, seepage, migration, release or escape of POLLUTANTS into or upon land, the atmosphere or any watercourse or body of water and did not arise from dishonest, fraudulent, malicious or criminal conduct committed by YOU or at YOUR direction or with YOUR prior knowledge. 13. PROFESSIONAL SERVICES —means those ser- vices that YOU are legally qualified to perform for others in YOUR practice as an architect, engineer, land surveyor, landscape architect, construction manager or as specifically defined by endorsement to this policy. 14. PREDECESSOR FIRM(S)--means any individual, partnership or corporation engaged in PROFES- SIONAL SERVICES in whose financial assets and liabilities the NAMED INSURED is the majority suc- cessor in interest. An assumption of 50% or greater of the firm's assets and liabilities shall be considered a majority successor interest. 15. RETROACTIVE DATE —means the date specified in the Declarations. This policy shall not apply to any CLAIM arising from a WRONGFUL ACT or POL- LUTION INCIDENT which occurred prior to this date. If the term "Unlimited" is specified in the Decla- rations, it means that there is no time limitation of coverage for YOU based upon when the WRONG- FUL ACT or POLLUTION INCIDENT occurred. AR -P -1 (3 -03) Page 3 of 9 16. SUBROGATION EXPENSES —means expenditures including, but not limited to: a. All expense of lawyers we are required by law to pay to defend YOU; b. Costs of investigations; c. Experts; d. Court costs; and e. Other similar expenses WE incur in the subroga- tion process. 17. TOTALLY AND PERMANENTLY DISABLED — means total and continuous disability for at least six (6) consecutive months as a result of sickness or accidental bodily injury which renders YOU unable to render PROFESSIONAL SERVICES. 18. WE, US, and OUR —means the Company providing this insurance. ACT(S) or POLLUTION INCIDENT(S) commit- ted within the scope of their association with and under the name of the NAMED INSURED or its PREDECESSOR FIRM(S). d. The estate, heirs, executors, administrators, as- signs, and legal representatives of anyone listed in a., b. or c. above in the event of their death, incapacity, insolvency or bankruptcy, but only to the extent that they would otherwise be provided coverage under this policy. EXCLUSIONS This policy does not apply: 1. To any CLAIM based upon or arising out of any dishonest, fraudulent, criminal, malicious or inten- tional WRONGFUL ACT(S) or POLLUTION INCI- DENTS) committed by YOU; 19. WRONGFUL ACT(S )—means any actual or alleged 2. To any CLAIM based on or arising out of YOUR negligent act, error or omission YOU or any person capacity as an officer, director, partner, shareholder or entity, including Joint Ventures, for whom YOU or employee of any entity other than the NAMED are legally responsible, commits, but only in the per- INSURED; formance of PROFESSIONAL SERVICES. 3. To any CLAIM arising out of PROFESSIONAL 20. YOU and YOUR —means Insured and includes: SERVICES or advice rendered by YOU in connec- a. The NAMED INSURED and any PREDECES- tion with any business enterprise not shown on the SOR FIRM(S). Declarations: b. Any Individual: (1) Who is currently or becomes a partner, stockholder or employee of the NAMED IN- SURED, including leased personnel under YOUR direct supervision, during the POL- ICY PERIOD, but only for CLAIM(S) result- ing from WRONGFUL ACT(S) or POLLUTION INCIDENT(S) committed within the scope of their employment by the NAMED INSURED or its PREDECESSOR FIRM(S). (2) Who was formerly a partner, stockholder or employee of the NAMED INSURED or its PREDECESSOR FIRM(S), but only for CLAIM(S) that result from WRONGFUL ACT(S) or POLLUTION INCIDENT(S) committed within the scope of their employ- ment by the NAMED INSURED or its PREDECESSOR FIRM(S); c. A retired partner, stockholder or employee of the NAMED INSURED acting as a consultant, but only for CLAIM(S) resulting from WRONGFUL a. Which is, was or will be owned in whole or in part by YOU; b. Which is, was or will be in any way controlled, operated or managed by YOU including the ownership, maintenance or use of any property in connection therewith; or c. In which YOU are, were or will be a partner or employee. This exclusion does not apply if, at the time such PROFESSIONAL SERVICES or advice was rendered, the NAMED INSURED or any insured, separately or in combination, had a total pecuni- ary or beneficial interest of 20% or less in such business enterprise; 4. To any CLAIM arising out of any circumstances due to nuclear reaction, radiation or contamination, re- gardless of cause; 5. To any CLAIM based on or arising out of discrimina- tion, harassment or misconduct by YOU, including but not limited to CLAIMS based on an individual's race, creed, color, age, sex, national origin, religion, AR -P -1 (3 -03) Page 4 of 9 disability, physical or mental handicap, disease, marital status or sexual preference; 6. To any CLAIM made by YOU against any other Insured; 7. To any CLAIM based on or arising out of the cost to repair or replace faulty workmanship in any con- struction, erection, fabrication, installation, assembly, manufacture or remediation performed by YOU, in- cluding any materials, parts or equipment furnished in connection therewith; 8. To any CLAIM based on or arising out of: a. YOUR alleged liability under any oral or written contract or agreement, including, but not limited to, express warranties or guaranties; or b. the liability of others YOU assume under any oral or written contract or agreement, except that coverage otherwise available to YOU shall apply to YOUR liability that exists in the ab- sence of such contract or agreement; 9. To any CLAIM based on or arising out of the advis- ing, requiring or obtaining of any form of insurance, suretyship or bond, or failure to do so; 10. To any CLAIM based on or arising out of the design or manufacture of any goods or products which are sold or supplied by YOU, or by others, under license from YOU; 11. To any CLAIM based on or arising out of bodily injury or personal injury sustained by any employee of YOURS arising out of employment by YOU; or any obligation for which YOU must pay under any unemployment, workers' compensation, disability benefits or other similar laws; 12. To any CLAIM based on or arising out of PROFES- SIONAL SERVICES for which YOU are insured, un- der any professional liability policy issued for a specific project or projects. This exclusion applies even if DAMAGES or CLAIM EXPENSE(S) are not covered in whole or in part by that policy for any reason, including, but, not limited to: a. An exclusion; or b. A reduction or exhaustion of the limit of liability under such policy. 13. To any CLAIM arising from a WRONGFUL ACT or POLLUTION INCIDENT that involves a demand or action seeking relief or redress in any form other than monetary damages, or for any fees, costs or expenses which YOU may become obligated to pay as a result of any adverse judgment for declaratory relief or injunctive relief. However, WE will afford de- fense to YOU for such actions, CLAIM(S), suits or demands in which monetary damages are requested if not otherwise excluded; 14. To any CLAIM arising out of a POLLUTION INCI. DENT involving the ownership, maintenance, use, operation, loading or unloading of any AUTO, air- craft, watercraft or rolling stock. Except this exclu- sion does not apply to: a. MOBILE EQUIPMENT; b. a watercraft YOU do not own that is: (1) less than 26 feet long; and (2) not being used to carry persons or property for a charge. c. the operation of any of the equipment listed in 8. a., b. or c. in the definition of MOBILE EQUIP- MENT; or d. a condition in or on an AUTO not owned or op- erated by YOU and that condition was created by the loading or unloading of that AUTO by YOU or by any person or entity for whom YOU are legally liable; 15. To any CLAIM arising out of a POLLUTION INCI- DENT at, onto or from property or facilities which are or were at any time owned or rented by YOU or by any person or entity in joint venture with YOU. INNOCENT INSURED PROTECTION Whenever coverage under any provision of this policy would otherwise be excluded, suspended, or lost be- cause of: 1. EXCLUSIONS relating to any CLAIM based upon or arising out of any dishonest, fraudulent, criminal, malicious or intentional WRONGFUL ACT(S) or POLLUTION INCIDENT(S) committed by YOU; or 2. Concealment of a CLAIM by any of YOU. WE agree that the coverage as would be afforded by this policy will apply to each of YOU who did not personally commit or participate in the WRONGFUL ACT(S) or POLLUTION INCIDENT(S), or agree to the conceal- ment. For coverage to apply, YOU must notify US of the WRONGFUL ACT(S), POLLUTION INCIDENT(S) or concealment as soon as YOU become aware of them. AR -P -1 (3 -03) Page 5 of 9 LIMITS OF LIABILITY Regardless of: 1. The number of YOU who are insured under the policy; 2. All persons or organizations who sustain DAMAGES payable under this policy; and /or 3. Suits brought on account of coverage afforded by the policy. OUR liability is limited as follows: 1. The Limit of Liability stated in Item 4(A) of the Decla- rations is the limit of OUR liability for all DAMAGES and CLAIM EXPENSE arising out of each CLAIM first made and reported in writing during the POLICY PERIOD or Extended Reporting Period, if applica- ble, 2. The Limit of Liability stated in Item 4(B) of the Decla- rations is subject to the above provision respecting each CLAIM and is the maximum limit of OUR liabil- ity for each POLICY PERIOD. In no event will OUR total Limit of Liability be increased by any Extended Reporting Period. 3. WE will only be liable to pay DAMAGES and CLAIM EXPENSE subject to the Limits of Liability in excess of the DEDUCTIBLE shown on the Declarations. YOUR DEDUCTIBLE for all DAMAGES and CLAIM EXPENSE in any POLICY PERIOD is the Annual Aggregate amount shown in the Declarations. Each of YOU under the policy is individually liable for the payment of the DEDUCTIBLE amount due for each CLAIM. In the event that WE expend funds for DAMAGES or CLAIM EXPENSE on YOUR behalf, YOU will reimburse US for such expenditures up to the amount of the DEDUCTIBLE shown on the Dec- larations. Reimbursement of the DEDUCTIBLE will be due within sixty (60) days from the date WE bill YOU. If WE and YOU agree to use MEDIATION and if WE and YOU resolve any CLAIM by MEDIATION, YOUR DEDUCTIBLE obligation will be reduced by 50% subject to a maximum reduction of $25,000. DEDUCTIBLE payments made prior to the applica- tion of the above credit will be reimbursed within thirty (30) days of the resolution of the CLAIM. 4. CLAIM EXPENSE will be subtracted from the Limits of Liability first as it is incurred for each CLAIM. The remaining amount will be the amount available to pay DAMAGES. 5. One or more CLAIMS based on or arising out of the same WRONGFUL ACT or POLLUTION INCIDENT AR -P -1 (3 -03) F or a series of related WRONGFUL ACT(S) or POL- LUTION INCIDENT(S) of one or more of YOU will be considered a single CLAIM, Unless otherwise endorsed, the CLAIM will be subject to the Limit of Liability in effect at the time such CLAIM was first reported in writing to US. Only one DEDUCTIBLE will apply to such CLAIM. NOTIFICATION 1. If during the POLICY PERIOD or the Extended Reporting Period: a. YOU receive written or oral notice from any party that it is the intention of such party to hold YOU responsible for any WRONGFUL ACT(S) or POLLUTION INCIDENT(S); or b. YOU become aware of circumstances which could reasonably be expected to give rise to such notice, then: YOU will tell us in writing as soon as practicable, but no later than the end of the POLICY PERIOD or Ex- tended Reporting Period, if applicable. Any subse- quent CLAIM made against YOU arising out of such WRONGFUL ACT(S) or POLLUTION INCIDENT(S) shall be deemed to have been made during the POLICY PERIOD, but only for CLAIMS due to WRONGFUL ACT(S) or POLLUTION INCIDENT(S) which occurred on or after the RETROACTIVE DATE and on or before the end of the POLICY PE- RIOD. No coverage for such CLAIM shall exist un- der any subsequent policy written by US. However, if the renewal policy is written by US, YOU will have sixty (60) days after the expiration date of this policy to report any CLAIM first made during this POLICY PERIOD. 2. In the event of any CLAIM occurring, written notice to US will be given by the person or firm(s) shown under Item 1. of the Declarations. Notice will be deemed to be received if sent by prepaid mail prop- erly addressed to the address shown in Item 7, of the Declarations. CLAIMS REPAIR PROVISION When WE receive YOUR written notice and WE, at OUR discretion, incur CLAIM EXPENSE to undertake meas- ures to avoid any DAMAGES as a result of the reported WRONGFUL ACT or POLLUTION INCIDENT, WE will waive the applicable DEDUCTIBLE. ,age 6 of 9 However, the DEDUCTIBLE will always apply if a suit is filed, if arbitration hearings or mediation hearings are begun or if any DAMAGES are paid. INSURED'S DUTIES IN THE EVENT OF CLAIM OR SUIT 1. In the event of a CLAIM, the NAMED INSURED must give US written notice of: a. The specific WRONGFUL ACT or POLLUTION INCIDENT; and b. The injury or damage which has or may result from the WRONGFUL ACT or POLLUTION IN- CIDENT; and c. The names and addresses of the claimants or potential claimants; and d. The circumstances by which YOU first became aware of such WRONGFUL ACT or POLLU- TION INCIDENT. 2. If CLAIM is made or suit is brought against YOU, YOU will immediately forward to US every demand, notice, summons or other process received by YOU or YOUR representative. 3. WE will have full discretion in the handling of any CLAIM, and YOU will give full information and assis- tance as WE may reasonably require. YOU will co- operate with US and, at OUR request, consent to being examined and questioned by OUR represen- tative, under oath, if necessary. At OUR request, YOU will attend hearings, depositions and trials and will assist in effecting settlement, securing and giv- ing evidence, and obtaining the attendance of wit- nesses. YOU will cooperate in the conduct of suits as well as in giving written statements to OUR rep- resentatives and defense counsel. EXTENSION OF COVERAGE If the NAMED INSURED dies during the POLICY PE- RIOD, the period for reporting CLAIMS is extended until the executor or administrator is discharged or for twenty four (24) months from the date of death, whichever is less. If the NAMED INSURED has been insured by US for at least three (3) consecutive years immediately prior to this POLICY PERIOD and becomes TOTALLY AND PERMANENTLY DISABLED during the POLICY PE- RIOD, the period for reporting CLAIMS is extended until the disability ends. No additional premium will be charged for this extension nor will any premium be re- funded. EXTENDED REPORTING PERIOD Only the NAMED INSURED can exercise the option to purchase one of the Supplemental Extended Reporting Periods described in paragraph 3. of this provision. 1. One or more Extended Reporting Periods described below will be provided if the policy is canceled or nonrenewed or if WE renew or replace coverage with insurance that provides coverage on other than a Claims Made basis. 2. A Basic Extended Reporting Period is automatically provided without additional charge. This period be- gins at the end of the POLICY PERIOD and lasts for sixty (60) days. The Basic Extended Reporting Pe- riod does not apply to CLAIMS covered under any subsequent policy. 3. In addition, the NAMED INSURED may purchase one of the Supplemental Extended Reporting Peri- ods described below if YOU are in compliance with the terms and conditions of this policy: a. A twelve (12) month Supplemental Extended Reporting Period for 100% of the full annual premium of this policy; or b. A twenty -four (24) month Supplemental Ex- tended Reporting Period for 150% of the full an- nual premium of this policy; or c. A thirty -six (36) month Supplemental Extended Reporting Period for 185% of the full annual premium of this policy; or d. A sixty (60) month Supplemental Extended Re- porting Period for 250% of the full annual pre- mium of this policy; or e. An unlimited Supplemental Extended Reporting Period for 300% of the full annual premium of this policy. 4. Coverage for a Supplemental Extended Reporting Period must be added by endorsement for which an additional premium charge must be paid. Such pe- riod starts sixty (60) days after the end of the POL- ICY PERIOD. 5. The right to purchase a Supplemental Extended Reporting Period will terminate unless; a. WE receive a written request for a Supplemental Extended Reporting Period; and b. The additional premium is paid within sixty (60) days of the end of the POLICY PERIOD. AR -P -1 (3 -03) Page 7 of 9 The NAMED INSURED'S request must specify the length of the Supplemental Extended Reporting Pe- riod desired. Once in effect, Extended Reporting Pe- riods may not be canceled. 6. An Extended Reporting Period does not extend the POLICY PERIOD or change the scope of coverage provided. Subject otherwise to the policy's terms, Limit of Liability, Exclusions and Conditions, the pol- icy is extended to apply to CLAIMS first made against YOU and reported to US in writing during the Basic Extended Reporting Period or, if purchased, the Supplemental Extended Reporting Period, but only for CLAIMS due to WRONGFUL ACT(S) or POLLUTION INCIDENT(S) which happened on or after the RETROACTIVE DATE and on or before the expiration of the POLICY PERIOD. 7. Extended Reporting Periods do not reinstate or increase the policy's Limits of Liability. CLAIMS which are first made and reported during the Basic Extended Reporting Period or the Supplemental Ex- tended Reporting Period, if it is in effect, will be deemed to have been made on the last day of the POLICY PERIOD. CONDITIONS 1. CANCELLATION. This policy may be canceled by the NAMED INSURED by surrendering the policy to US or any of OUR authorized agents or by mailing written notice to US stating when the cancellation is to be effective. WE may cancel this policy by mailing to the NAMED INSURED at the address shown on the Declarations a written notice stating when the cancellation is to be effective. WE will give the NAMED INSURED ten (10) days notice for nonpay- ment of premium or sixty (60) days notice for any other valid reason. The mailing of notice will be sufficient proof of no- tice. The time of surrender or the effective date and hour of cancellation stated in the notice will become the end of the POLICY PERIOD. Delivery of written notice either by the NAMED INSURED or by US will be equivalent to mailing. If this policy is canceled, WE will send the NAMED INSURED any premium refund due. If WE cancel, the refund will be pro rata. If the NAMED INSURED cancels, the refund will be the customary short rate proportion. WE will make the premium refund as soon as practicable after the date of cancellation. However, the premium refund is not a condition of cancellation. Notice of cancellation will only be sent to the NAMED INSURED and will serve as notice to all of YOU. 2. NONRENEWAL. If WE do not renew this policy, WE will mail written notice to the NAMED INSURED at least sixty (60) days before the end of the POLICY PERIOD. Any changes in the terms and conditions quoted on renewal do not constitute nonrenewal of this policy. 3. ASSIGNMENT. Assignment of interest under this policy will not bind US unless WE endorse the policy in writing assigning YOUR interest to another party. 4. CHANGES. The terms of this policy will not be waived or changed except by endorsement issued by US and made a part of this policy. 5. MERGERS AND ACQUISITIONS. All mergers and acquisitions with other firms occurring throughout the POLICY PERIOD must be reported to US in writ- ing within sixty (60) days of the merger or acquisi- tion, or the next anniversary of this policy, whichever is sooner. WE shall have the right to adjust the pre- mium, terms, conditions and exclusions to reflect any shift in exposure created by such merger or ac- quisition. 6. CONFLICTING STATUTES. Any part of this policy which is in conflict with the statutes of the state in which this policy is issued is amended to conform to such statutes. 7. SUBROGATION CLAUSE. YOU will transfer to US YOUR rights of recovery against any other party for any DAMAGES WE have paid on YOUR behalf. YOU must do everything necessary to secure these rights and do nothing that would jeopardize them. WE will not exercise OUR right to recover against any of YOU unless the DAMAGES result from any dishonest, fraudulent, criminal, malicious or inten- tional WRONGFUL ACT(S) or POLLUTION INCI- DENT(S) committed by YOU. Any amount recovered from subrogation shall be apportioned as follows: AR -P -1 (3 -03) Page 8 of 9 Any amount recovered shall first be used for repay- ment of SUBROGATION EXPENSES; second, to any DAMAGES and /or CLAIM EXPENSE paid by US; third, to any DAMAGES and CLAIM EXPENSE paid by an excess insurer on YOUR behalf; fourth, to any DAMAGES and CLAIM EXPENSE paid by any other primary insurer on YOUR behalf; and last, to repayment of YOUR DEDUCTIBLE. 8. SEVERABILITY CLAUSE. The application and any supplements or addendum's, copies of which are at- tached to this policy, and the Declarations, are part of this policy. They are to be considered as incorpo- rated in and constituting part of this policy. The par- ticulars and statements contained in the application, any supplements or addendums and the conditions and exclusions set forth in this policy will be con- strued as a separate agreement with each of YOU. By acceptance of this policy, YOU agree that the statements in the application are YOUR repre- sentations, that they shall be deemed material and that this policy is issued upon the truth of such representations. Nothing in this provision will be construed to increase OUR Limits of Liability as set forth in the Declarations. 9. OTHER INSURANCE. If YOU have other insurance which applies to CLAIMS reported under this policy, WE will be excess of the amount of the applicable DEDUCTIBLE and any other valid and collectible in- surance whether such other insurance is primary, pro rata, contributory, excess, contingent or any other basis, unless such other insurance is written only as specific excess insurance over the Limit of Liability provided in this policy. If a loss occurs involving two or more policies, each of which provides that its insurance will be excess, then each policy will contribute on a pro rata basis. This means WE will pay no more than OUR per- centage of the total amount of the insurance cover- ing the CLAIM, less the DEDUCTIBLE. For example: The limit of coverage under this policy is $100,000. Another insurance policy with a limit of $300,000 also covers a CLAIM covered by this policy. WE will not pay more than 25% ($100,000/$400,000) of the DAMAGES and CLAIM EXPENSE, less the DEDUCTIBLE. 10. ACTION AGAINST US. No action will lie against US unless YOU have fully complied with all the terms and conditions of this policy prior to bringing the ac- tion. 11. INSPECTION AND AUDIT. YOU agree to allow US to examine and audit YOUR premises, management procedures and records as they relate to this insur- ance during normal business hours while this policy is in force. WE are not, however, required to make inspections nor will WE guarantee that YOUR pro- cedures are adequate or that they conform to any laws, rules or regulations. 12. BANKRUPTCY. In the event of YOUR bankruptcy or insolvency, WE will not be relieved of our obligations under the terms and conditions of this policy. 13. SOLE AGENT. By acceptance of this policy, the NAMED INSURED agrees to act on YOUR behalf with respect to: a. Exercising the option to purchase an Extended Reporting Period; b. The giving and receiving of notice of CLAIM(S) or cancellation; and c. The payment of premiums that may become due under this policy. Each of YOU agrees that the NAMED INSURED will act on YOUR behalf. 14. PREMIUM. All premiums for this policy shall be computed in accordance with OUR rules, rates, rat- ing plans, premiums and minimum premiums appli- cable to the insurance afforded herein. 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I ; • iV nlzii� N'! sUPPLEMPNTAL Ft. mi ilri-C. 01-11;11­311- tilt, A L3 1 Of ...... .... it. 1, '5 It% A --t WARNINC, iAppUc!1b FRAUD TIS: p"rTr No MP TO NP:,N YORK APPLICAN ...... ...... ......... . .... . .......... ..... . .......... ... .......... ... .... .. .......... .. ........... ....... . . . ........... ....... 'PR", wxe, .......... ov.... ... .. .... ... . . .......... Ap.7n, . .... . . ....... . ........... to Y) "81 . . ......... .. - '1�--,,,,w-,.,, Y. %T.- "; Getting Paid for Design Services Timothy (Tim) Corbett Introduction The last few years have been challenging for many design firms. Adding fuel to this fire is many firms are having difficulty obtaining payment for their services. In a recent and ongoing SmartRisk Survey -81% indicated trouble with getting paid. Successful account receivable programs do not have to be time consuming or daunting. By implementing some straightforward practices, a firm can implement an effective program that gets invoices paid on time along with maintaining a positive relationship with clients. Establishing Financial Expectations In an initial meeting with clients, explain in a clear and concise manner exactly what your services will be, the value you bring to the project along with clearly stating your compensation terms. Your communication should be clear establishing the financial expectations with the client. At this face -to- face meeting, you will obtain a sense of the client's financial capability and ability to pay for your services. If you don't get that warm and fuzzy financial feeling —this is the time to walk away. Contract Agreement The boundaries discussed at the initial meeting should be outlined in the contract agreement. A specific scope of services for the project, associated fees, expenses and cost of additional services. In basic terms — the agreement should explicitly state your client owes you money for services you will be rendering. The agreement should also specify the terms of payment, including any payment in advance of services. Continued on page 2 ,�fyPublished byNadoreaiC^asi{y f�any F Gafrtti enter Drive •Scottsdale, AZ 8S2,a y Continued from page b� Review contract terms verbally with the clients before signing. This allows you approve them, and t reminder, with a phone call and in writing, the opportunity to answer any questions when necessary. the client may have, and to reinforce the financial conditions and obligations. There should be no question at this point, what services are being offered, what is expected by all parties, and how much it will cost. It is important to identify what documents the client requires when submitting invoices, and who in their organization will be responsible for reviewing and making payment. Retainer For any client, but especially for new clients, and on larger, and longer duration projects, requesting a retainer is recommended. This could be a percentage of services or a set dollar amount. Even a small retainer shows a commitment by the client of financial commitment and responsibility. Identify that the retainer will be applied towards the final invoice. Accounting Procedures and Standards Internal accounting procedures affect any account receivable program. Hold your firm to an invoicing standard calling for no errors and consistently punctual delivery, allowing time for clients to review and meet payment terms. Make sure invoices are not delayed — sending invoices to the person who must 2 To help speed up payments, consider incentives to clients that pay promptly. Incentives are usually only effective when they are directed to the decision maker. If incentives are offered, consider this option when developing your fee structure. Accounting Programs The off - the -shelf accounting program that was used when you started your business may not be the right program as your business has grown. Look for an accounting system that provides features such as automatic updating of customers, projects, balances and flexibility for change as your business evolves. Late - Payment Fees It is very difficult to collect late - payment fees; however, they do help when there is a collection problem. If your firm uses them, be consistent when they are applied. When negotiating late payments, you can state that all or part of the late charges can be removed if overnight payment is made. Client Relations Principals, you were involved in negotiating the contract and payment terms. During the project, your role has focused on fostering a J long -term rel'a'tionship with the client. This would be difficult if you are also the person demanding payment for an overdue invoice. During the initial steps in dealing with payment problems, Principals should distance themselves from the billing process. However, you should become involved in the final steps for slow - paying or nonpaying clients. Should a client contact you to complain about a collection call, the distance allows you to respond that you will look into the call. The separation allows you to maintain a distinctly different image in the mind of the client. You have two main goals: 1) Preserving the valuable business relationship you have built up with your client and 2) obtaining payment for your firm's services. After confirming with your accounting department, review conditions with your client along with the agreed upon contractual payment obligations. You would like your clients to view your "accounting department" and you as separate arms of your business if possible. Stubborn Clients For those really stubborn, slow, nonpaying clients, a delicate and balanced approach is always needed. Principals, when it gets to this point, you must take the lead. These conversations are never easy; however, the best time things are going well or at a critical stage of a project. In either case, have a face -to -face meeting away from the project, outline that you have financial obligations and a payroll for your employees. Make it clear that you M not want to, but a delay in paying will force you to suspend, or even terminate services on the project. Explain that you would be out of business if you did not obtain payment for your services. Hopefully as a fair business person, this will solve the problem and send a clear message to the client. Payment Disputes When a payment dispute arises, both parties should agree the first step would be through negotiation. This process should be outlined in the contract agreement. If an agreement cannot be made during negotiation, mediation would be the next step followed by arbitration. This approach is less costly for both parties, and allows problems to be resolved faster than litigation. Control Emotions When problems do arise, the best advice is stay calm and keep emotions under control. Outline the situation clearly and repeat the payment terms and options verbally, followed by in writing to your client. The objective is obtaining a commitment from your client on payment. Consider a compromise when Continued on page 4 3 r� Continued from page 3 necessary, but do not walk away empty. A release from any and all liability is an option and could be used as leverage for payment. Timothy (Tim) Corbett is founder and President o f SmartRisk LLC and has over 25 years or experience developing and implementing insurance and risk management programs for design and building professionals. He is a member o f American Institute o f Architects (AIA), American Council Engineering Companies (ACEC), and U.S. Green Building Council (USGBC) and sits on national risk management, environmental and business practice committees. Tim is called upon as a speaker at regional and We Want Your Inputl national forums, has been published topics and owns copyrights to risk management practices and strategies. Mr. Corbett holds a BS in Security and Risk Management, MS in Management, Environmental studies degree, Architectural Design Technology Certi ficate and is LEED certified. This article is intended for general discussion of the subject and should not be mistaken for legal advice. Readers are cautioned to consult appropriate advisors for advice applicable to their individual circumstances. Reprinted with the permission or the author. Do you wish you knew more about a particular risk management topic? Let us know what interests you. We may be able to include an article on the topic in a future issue of this newsletter. We welcome your submissions on risk management - related topics. Articles we choose to publish will include a byline for you and your firm. We also will supply you with extra copies of that newsletter's issue. Please contact Linda Drawsky at 800- 423 -7675 or 480 - 365 -3491, or by e -mail: drawskl@scottsdaleins.com.