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Insurance - Transcontinental - 1985-07-11 •/VA Transcontinental Insurance Company CNA Plaza A Stock Company Chicago, Illinois 60685 Herein called the Company SPECIAL EXCESS LIABILITY POLICY NO SXP 3584447 DECLARATIONS Named Insured OOSTA MESA SANITARY DISTRICT Address P.O. BOX 1200 COSTA MESA, CALIFORNIA 92628-1200 Policy Period From 7-11-85 to 7-1-86 12 01 A.M standard time at the address of the Named Insured as stated herein. Limits of Liability Insured's Retained Limit Item 1 $ 100,000 ultimate net loss as the result of any one occurrence because of personal injury or property damage or both combined. Company's Liability- Item 2a. S 400,000 ultimate net loss as the result of any one occurrence because of personal injury or property damage, or both combined Item 2b $ 400,000 ultimate net loss as the result of all occurrences during each policy year arising out of the products hazard or the completed operations hazard. Self-insured Claims Servicing Organization CARL WARREN & CC) — 1801 PARK COM' PLACE #208 SANTA ANA, CA. 92701 Premium Computation Estimated Rzte4etx Total Advance Minimum Exposure $13.5362 PER Premium Premium $184,690 TOTAL PAYROLL $25,000 $25,000 TOTAL PAYROLL Endorsements attached to policy at inception FORE. 7-85145—A, G-85388—A ooRSEMIlNTS: 1. —7y,S-3,S—�:,}�-31X �f Countersigned by - . .�YS--ter ` f ` Authorized Representative 7-85144-A (Declarations) SPECIAL EXCESS LIABILITY POLICY CONTRACTUAL LIABILITY In consideration of the premium charged, it is agreed that exclusion (H) is deleted,and with respect to such coverage as is hereby afforded, the following additional exclusions apply (A) To any suit after the applicable limit of the Company's liability has been exhausted by payment of judgments or settlements. (B) To any claim, judgment or agreement from any arbitration proceeding where in the Company is not entitled to exercise with the Insured the Insured's rights in the choice of arbitrators, and in the conduct of such proceedings. (C) To liability of the Indemnitee resulting from his sole negligence. (D) 1 If the Insured is an architect, engineer or surveyor to bodily injury or property damage arising out of professional services performed by such Insured, including (I) The preparation or approval of maps, contracts, drawings, plans, opinions, reports, tests, surveys, change orders, designs or specifications and (II) Supervisory inspection or engineering services. 2. If the Indemnitee of the Insured is an architect, engineer or surveyor to the liability of the Indemnitee, his agents or employees, arising out of (I) The preparation or approval of contracts, maps, plans, drawings, opinions, reports, tests, surveys, change orders, designs or specifications or (II) The giving or the failure to give directions or instructions by the Indemnitee, his agents or employees, provided such giving or failure to give is the primary cause of personal injury or property damage. (E) To personal injury or property damage due to war whether or not declared civil war insurrection, rebellion or revolution or to any action or condition incident to any of the foregoing. (F) To personal injury or property damage for which the Indemnitee may be held liable. 1 As a person or organization engaged in the business of manufacturing, distributing, selling or serving alcoholic beverages or 2. If not so engaged, as an owner or lessor of premises for such purposes if such liability is imposed: (I) By or because of the violation of any statute, ordinance or regulation pertaining to the sale, gift, distribution or use of any alcoholic beverage or (II) By reason of the selling, serving or giving of any alcohol beverage to a minor or to a person under the influence of alcohol or which causes or contributes to the intoxication of any person, But part (II) .f this exclusion does not apply with respect to liability of the Indemnitee as an owner or lessor descrDed in (2) above. (G) To any obligation for which the Insured may be held liable in an action on a contract by a third party beneficiary for bodily injury or property damage arising out of a project for a public authority.this exclusion does not apply to an action by the public authority or any other person or organization engaged in the project. (H) To property damage to premises alienated by the named Insured arising out of such premises or any part thereof (I) To personal injury or property damage arising out of the ownership maintenance, operation, use, loading or unloading of any automobile or mobile equipment while being used in any prearranged or organized racing speed or demolition contest or activity (J) To liability assumed by the Insured under any agreement relating to construction operations within fifty feet of any railroad property affecting any railroad bridge or trestle, tracks, road beds, tunnel, underpass or crossing This endorsement, which forms a part of and is for attachment to the following described policy issued by the company designated therein, takes effect on the effective date of said policy unless another effective date is shown below at the hour stated in said policy and expires concurrently with said policy. Must Be Completed Complete Only When This Endorsement Is Not Prepared with the Policy Or Is Not to be Effective with the Policy ENDT NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT 7 SXP 3584447 INSURANCE/v/'1 7-22-85,m]n ,,r1, l? �' m° Y�/ Y counte 1 nei by G-85388-A Authorized Agent SPECIAL EXCESS LIABILITY POLICY EXCLUSION OF PROPERTY DN4NI CAUSED BY SUBSIDENCE IT IS AGREED THAT THIS INSURANCE DOES NOT APPLY TO PERSONAL INJURY OR PROPERTY DAMAGE ARISING OUT OF, CAUSED BY, RESULTING FROM, OONTRIBUTED TO OR AGGRAVATED BY THE SUBSIDENCE, SETTLING, SINKING, SLIPPING, FALLING AWAY CAVING IN SHIFTING, ERODING, MJI) FLOW RISING, TILTING, OR ANY OTHER NDVEMENT OF LAND OR EARTH. This endorsement is a part of your policy and takes effect on the effective date of your policy unless another effec tive date is shown below. Must Be Completed Complete Only When Thu Endorsement Is Not Prepared with the Policy X-68 Or Is Not to be Effective with the Policy ENDT.NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT 6 SXP 3584447 // CNA 7-22-85/m7n c s ,T , For All the Commitments You Make' ( 'd °We Countersigged b� Author ed Representative G-39543-A SPECIAL EXCESS LIABILITY POLICY EXCLUSI(1I OF AUPObDBILE LIABILITY IT IS AGItiD THAT THIS INSURANCE DOES NOT APPLY TO PERSONAL INJURY OR PROPEKPY DADWE ARISING OUT OF THE CNNERSHIP, MAINTENANCE, OPERP.TION, USE, WADING OR UNLOADING OF ANY AUPOMOBIIE This endorsement is a part of your policy and takes effect on the effective date of your policy unless another effec tive date is shown below Must Be Completed Complete Only Whet This Endor ement Ir Not Prepared with th Policy X-3 Or Is Not to be Effect, with the Policy ENDT.NO POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT 5 SXP 3584447 CNA7-22-85/min For All the Commitments You Make' / / J Cou tersign by l V Authorized Repr ntatt G-39543-A SPECIAL EXCESS LIABILITY POLICY EXCLUSION OF INVERSE OaRIFICATION IT IS AGIthD THAT THIS POLICY DOES NCTT APPLY TO PERSONAL INJURY OR PROPERTY DAMAGE ARISING OUT OF OR IN CC UNECTION WITH THE PRINCIPLES OF EMINENT DOMAIN CZNEENNATICN PROCEEDINGS OR INVERSE CONDEMNATION BY WHATEVER NAME REGARDTFSS OF WHETHER SUCH CIAINE ARE MADE DIRECTLY AGAINST THE INSURED OR BY VIRTUE OF ANY AGREEMENT ENTERED INTO BY OR ON BEHALF OF THE INSURED. This endorsement is a part of your policy and takes effect on the effective date of your policy unless another effec live date is shown below Must Be Completed Complete Only When This Endorsement Is Not Prepared with the Policy S-4 Or Is Not to be Effective with the Policy ENDT NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT 4 SXP 3584447 CNA 7-22-85/min ` i\ iver For All the Commitments You Make* i s r CoLnieM"gned by v V Authorized Representative 0-39543-A SPECIAL EXCESS LIABILITY POLICY ASBESTC6 EXCLUSION ENDORSEMENT IT IS AGItr:ED THAT SUCH INSURANCE AS IS AFFORDED BY THIS POLICY DOES NOT APPLY TO PERSONAL INJURY, OR PROPERTY DAMAGE, FOR PAST, PRESENT, OR FUTURE CLAIMS ARISING IN WHOLE OR IN PART, EITHER DIRECTLY OR INDIRECTLY, OUT OF THE MANUFACTURE, DISTRIBUPICN SALE, RESALE, REBRANDING, INSTALLATICN, REPAIR, OVAL, ENCAPSULATICE ABATEMENT, REPLACEMENT OR HANDLING OF, OR EXPOSURE TO, ASRRSTOS OR PRODUCTS CONTAINING ASBESTOS WHETHER OR NOT THE ASBESTOS IS OR WAS AT ANY TINE AIRBORNE AS A FIBER OR PARTICTE, OCNFTAINED IN A PRODUCT CARRIED CO CLOTHING, INHALED, TRANSMITTED IN ANY FASHICN, OR FOUND IN ANY FORA WHATSOEVER. IT IS FURTHER UNDERSTOOD AND AGREED THAT THIS POLICY WILL NOT BECOME EXCESS OF ANY REDUCED OR EXHAUSTED UNDERLYING AGGREGATE LIMIT OF LIABILITY OR AGGREGATE SELF—INSURED RETENTION TO THE EXTENT SUCH REDUCTION OR EXHAUSTION IS THE RESULT OF CLAIMS, DAMAGE OR LOSS EXCLUDED BY THIS ENDORSEMENT This endorsement is a part of your policy and takes effect on the effective date of your policy unless another effec tive date is shown below Must Be Completed Complete Only When Thu Polio Is Not Prepared with the Polr S-3 Or Is Not to be Effect, e with the Policy ENDT.NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT 3 SXP 3584447 CNA 7-22-85/m 1n For All the Commitments You Make" v Counters) -by' Authorized Representative G-39543-A SPECIAL EXCESS LIABILITY POLICY PREMIUM EXPOSURE IEFINITION ENDORSEMENT 'TOTAL PAYFDLL MEANS THE ENTIRE REMUNERATION (EXCLUDING DRIVERS AND CLERICAL) EARNED DURING THE POLICY PERIOD BY PROPRIATORS AND BY ALL EMPLOYEES OF THE NAMED INSURED. This endorsement is a part of your policy and takes effect on the effective date of your policy unless another effec tive date is shown below Must Be Completed Complete Only Whet This Endorsement Is Not Prepared with the Policy S-2 Or Is Not to be Effect, u-th the Policy ENDT.NO. POLICY NO. ISSUED TO EFFECTIVE DATE OF MS ENDORSEMENT 2 SXP 3584447 CNA 7-22-85/min `I I For All the Commitments You Make' i Cou nteki p# Y Autho ' ed Repr ntati G-39543-A SPECIAL EXCESS LIABILITY POLICY POLLUrIC%d AND ENVIRONMENT IMPAIRMENT EXCLUSICN IT IS AGREED THAT THIS POLICY DOES NOT APPLY TO PERSONAL INJURY OR PROPERTY DAMAGE ARISING OUT OF THE CONTAMINATION OF THE ENVIRONMENT BY POLLUTANTS INTRODUCED AT ANYTIME INTO OR UPON LAND, THE ATMOSPHERE OR ANY WATERCOURSE OR BODY OF WATER OR AQUIFER. THIS EXCLUSI01 APPLIES WHETHER OR NOT THE CONTAMINATION IS INTRODUCED INTO THE ENVIRONMENT INIENTIONAILY OR ACCIDENTALLY OR GRADUALLY OR SUDDENLY AND WHETHER OR NOT THE INSURED OR ANY OTHER PERSON OR ORGANIZATION IS RESPONSIBLE FOR THE CXNTANIINATION CXNTAMINATICN INCLUDES ANY UNCLEAN, UNSAFE OR UNHEALTHFUL CONDITION EITHER ACTUAL OR POTENTIAL, WHICH ARISES OUT OF THE PRESENCE IN THE ENVIRONMENT OF ANY POLLUTANT, DAR PERMANENT OR TRANSIENT ENVIRONMENT INCLUDES LAND, BODIES OF WATER, UNIERGROUND WATER OR WATER TABLE OR AQUIFER, THE ATMOSPHERE AND ANY OTHER NATURAL FEATURE OF THE EARTH, WHETHER OR NOT ALTERED, DEVELOPED OR CULTIVATED. POLLUTANTS INC LUTE SNDKE, VAPORS, SOOT, FUMES, ACIDS, ALKALIS, CHEMICALS, LIQUIDS OR GASES, THERMAL POLLUTANTS AND ALL OTHER IRRITANTS OR CXNTAMQdANTS. EXCIIJSI0 (M) IS HEREBY AMENDED. This endorsement is a part of your policy and takes effect on the effective date of your policy unless another effec tive date is shown below. Must Be Completed Complete Only When This Endorsement Is Not Prepared with the Policy s-1 Or Is Not to be Effectme. with the Policy ENDT.NO. POLICY NO ISSUED TO EFFECTIVE DATE OF THIS ENDORSEMENT 1 SXP 3584447 CNA 7-22-85/min For All the Commitments You MakeT Coontersi'ned by/ ''' Authorized Representative G-39543-A esuN"AcEAFR°44 Transcontinental Insurance Company A Stock Company Herein called the Company SPECIAL EXCESS LIABILITY POLICY In consideration of the payment of the premium, in reliance upon the statements in the declarations made a part hereof and subject to all of the terms of this policy the Company agrees with the Named Insured as follows: INSURING AGREEMENT Coverage A Personal Injury Liability Coverage B Property Damage Liability The Company will indemnify the Insured for ultimate net loss in excess of the retained limit hereinafter stated which the Insured shall become legally obligated to pay as damages because of A. personal injury or B. property damage to which this policy applies,caused by an occurrence. DEFENSE COSTS This policy does not cover defense costs, nor interest accruing on a judgment after its entry (except as otherwise specifically provided hereinafter) but the Company shall have the right and opportunity to associate with the Insured in the defense,appeal and control of any claim or suit arising out of any occurrence seeking damages in excess of the retained limit. In such an event, the Insured and the Company shall cooperate fully If claim is made or suit is brought seeking damages in excess of the self-insured retained limit, no defense costs shall be incurred on behalf of the Company without the written consent of The Company and, notwithstanding such consent, all such defense costs shall be reasonable. If a settlement made with the consent of the Company or a judgment against the Insured, exceeds the retained limit, the Company shall pay defense costs and interest accruing on a judgment after its entry and before The Company has paid or tendered or deposited in court that part of the judgment which does not exceed the limit of the Company s liability thereon, in a ratio which its proportion of the liability for the judgment rendered, or settlement made, bears to the entire amount of said judgment or settlement. RETAINED LIMIT —THE COMPANY'S LIMIT OF LIABILITY Regardless of the number of (1) Insureds under this policy (2) persons or organizations who sustain injury or damage, or (3) claims made or suits brought on account of personal injury or property damage,The Company s liability is limited as follows: With respect to personal injury or property damage, or both combined, The Company s liability shall be only for the ultimate net loss in excess of the Insured's retained limit as specified in Item 1 of the Limits of Liability section of the Declarations as the result of any one occurrence, and then for an amount not exceeding the amount specified in Item 2 (a). of the Limits of Liability section of the Declarations as the result of any one occurrence. There is no limit to the number of occurrence during the policy period for which claims may be made, except that the liability of The Company arising out of either the products hazard or the completed operations hazard,or both combined, because of all occurrences during each policy year shall not exceed the amount specified in Item 2 (b) of the Limits of Liability section of the Declarations. For the purpose of determining the limit of The Company s liability all damages arising out of continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence. 7-85145-A POLICY PERIOD TERRITORY This policy applies to personal injury or property damage which occurs anywhere in the world during the policy period. PERSONS OR ENTITIES INSURED (a) The Named Insured (b) Each of the following is an insured under this policy to the extent set forth below- (1) if the Named Insured is designated in the Declarations as a partnership or joint venture, the partnership or joint venture so designated and any partner or member thereof but only with respect to his liability as such, however this policy does not apply to personal injury or property damage arising out of the conduct of any partnership or joint venture of which the Insured is a partner or member and which is not designated in this policy as a Named Insured; (2) except with respect to the ownership, maintenance or use, including loading or unloading, of automobiles, (i) any executive officer other employee,director or stockholder of the Named Insured while acting within the scope of his duties as such, (ii) any person or organization while acting as real estate manager for the Named Insured, (3) any person while using,with the permission of the Named Insured,any automobile owned by loaned to or hired for use by or on behalf of the Named Insured and any person or organization legally responsible for the use thereof provided the actual operation or other actual use is within the scope of such permission, and any executive officer director of stockholder of the Named Insured with respect to the use of an automobile not owned by the Named Insured but only while such automobile is being used in the business of the Named Insured. The insurance with respect to any person or organization other than the Named Insured does not apply under paragraph (3) (i) to any person or organization, or to any agent or employee thereof, operating an automobile sales agency repair shop, service station, storage garage or public parking place, with respect to any occurrence arising out of the operation thereof' (ii) with respect to any automobile hired by or loaned to the Named Insured, to the owner or a lessee (of whom the Named Insured is a sub-lessee) thereof other than the Named Insured,or to any agent or employee of such owner or lessee. EXCLUSIONS This policy does not apply' (a) to any obligation for which the Insured or any carrier as his insurer may be held liable under any workmen s compensation, unemployment compensation or disability benefits law or under any similar law' (b) to personal injury to any employee of the Insured arising out of and in the course of his employment by the Insured,but this exclusion does not apply to liability assumed by the Insured under an incidental contract; (c) to property damage to (1) property owned or occupied by or rented to the Insured, (2) property used by the Insured, or (3) property in the care,custody or control of the Insured or as to which the Insured is for any purpose exercising physical control; but parts (2) and (3) of this exclusion do not apply with respect to liability under a written sidetrack agreement and part (3) of this exclusion does not apply with respect to property damage (other than to elevators) arising out of the use of an elevator at premises owned by rented to or controlled by the Named Insured; (d) to loss of use of tangible property which has not been physically injured or destroyed resulting from (1) a delay in or lack of performance by or on behalf of the Named Insured of any contract or agreement, or (2) the failure of the Named Insured's products or work performed by or on behalf of the Named Insured to meet the level of performance, quality fitness or durability warranted or represented by the Named Insured, but this exclusion does not apply to loss of use of other tangible property resulting from the sudden and accidental physical injury to or destruction of the Named Insured's products or work performed by or on behalf of the Named Insured after such products or work have been put to use by any person or organization other than an insured, (e) to property damage to the Insured's products arising out of such products or any part of such products; (f) to damages claimed for the withdrawal, inspection, repair replacement or loss of the use of the Insured's products or work completed by or for the Insured or of any property of which such products or work form a part, if such products,work or property are withdrawn from the market or from use by the Insured or any claimant against the Insured because of any known or suspected defect or deficiency therein, (g) to property damage to work performed by or on behalf of the Insured arising out of the work or any portion thereof or out of materials, parts or equipment furnished in connection therewith; (h) to liability assumed by the Insured under any contract or agreement except an incidental contract;but this exclusion does not apply to a warranty of fitness or quality of the Insured's products or a warranty that work performed by or on behalf of the Insured will be done in a workmanlike manner (i) to personal injury or property damage arising out of Aircraft Products, including damages resulting from the Grounding of any aircraft; (j) to personal injury or property damage arising out of the ownership, maintenance, operation,use, loading or unloading of (1) any aircraft or watercraft owned or operated by or rented or loaned to the Insured, or (2) any other aircraft or watercraft operated by any person in the course of his employment by the Insured, (k) to personal injury or property damage arising out of professional services performed by or on behalf of the Insured (including, by way of example and not limitation, hospital, physicians, surgical, medical, nursing, legal, architectural, engineering, accountancy and consulting services) (I) to personal injury or property damage arising out of the hazardous properties of nuclear material, (m) to personal injury or property damage arising out of the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases,waste materials or other irritants,contaminants or pollutants into or upon land, the atmosphere or any water course or body of water but this exclusion does not apply if such discharge, dispersal,release or escape is sudden and accidental, (n) as respects liability imposed upon an Insured (or which is imputed to an Insured) under the 'Employee Retirement Income Security Act of 1974' and any law amendatory thereof DEFINITIONS When used in this policy (including endorsements forming a part hereof) 'aircraft' means a vehicle designed for the transport of persons or property principally in the air 'aircraft products means Aircraft (including missiles or spacecraft and any ground support or control equipment used therewith) Aircraft parts and goods or products installed in or on Aircraft or used in connection with Aircraft, manufactured, sold, handled or distributed by the Named Insured or by others trading under the Insured's name. Aircraft Products includes tooling used in the manufacture of Aircraft products, and also includes ground handling tools and equipment, training aids, instructions, manuals, blueprints, engineering and other data, engineering and other advice and services and labor relating to aircraft products; 'automobile means a land motor vehicle, trailer or semi-trailer designed for travel on public roads (including any machinery or apparatus attached thereto) but does not include mobile equipment; completed operations hazard' includes personal injury and property damage arising out of operations or reliance upon a representation or warranty made at any time with respect thereto, but only if the personal injury or property damage occurs after such operations have been completed or abandoned and occurs away from premises owned by or rented to the Insured. operations include materials, parts or equipment furnished in connection therewith. Operations shall be deemed completed at the earliest of the following times. (a) when all operations to be performed by or on behalf of the Insured under the contract have been completed, (b) when all operations to be performed by or on behalf of the Insured at the site of the operations have been completed, or (c) when the portion of the work out of which the injury or damage arises has been put to its intended use by any person or organization other than another contractor or subcontractor engaged in performing operations for a principal as a part of the same project. Operations which may require further service or maintenance work, or correction, repair or replacement because of any defect or deficiency but which are otherwise complete shall be deemed completed. The completed operations hazard does not include personal injury or property damage arising out of (1) operations in connection with the transportation of property unless the personal injury or property damage arises out of a condition in or on a vehicle created by the loading or unloading thereof, (2) the existence of tools, uninstalled equipment or abandoned or unused materials, 'damages includes damages for death and for care and loss of services resulting from personal injury and damages for loss of use of property resulting from property damage; 'defense costs means attorney's fees, costs and expenses and all other fees,costs and expenses incurred in connection with the investigation, adjustment, defense and appeal of a claim or suit covered hereunder However 'defense costs' do not include the office expenses of the Company or the Insured nor the salaries of employees or officials of the Company or the Insured, 'grounding means the withdrawal, at or about the same time, in the interest of safety of one or more aircraft from flight operations because of a known or suspected defect of any nature; 'incidental contract means any written (1) lease of premises, (2)easement agreement,except in connection with construction or demolition operations on or adjacent to a railroad, (3) undertaking to indemnify a municipality required by municipal ordinance, except in connection with work for the municipality (4) sidetrack agreement or (5) elevator maintenance agreement; 'insured' means any person or organization qualifying as an Insured under the Persons or Entities Insured section of this policy The insurance afforded applies separately to each Insured against whom claim is made or suit is brought,except with respect to the limits of the Company s liability• insured's products' means goods or products manufactured, sold, handled or distributed by the Insured or by others trading under his name, including any container thereof (other than a vehicle) but 'Insured's products' shall not include a vending machine or any property other than such a container rented to or located for use of others but not sold; 'mobile equipment' means a land vehicle (including any machinery or apparatus attached thereto), whether or not self-propelled, (1) not subject to motor vehicle registration, or (2) maintained for use exclusively on premises owned by or rented to the named insured, including the ways immediately adjoining, or (3) designed for use principally off public roads,or (4) designed or maintained for the sole purpose of affording mobility to equipment of the following types forming an integral part of or permanently attached to such vehicle: power cranes, shovels, loaders, diggers and drills;concrete mixers (other than the mix-in-transit type) graders, scrapers, rollers and other road construction or repair equipment, aircompressors, pumps and generators, including spraying, welding and building cleaning equipment; and geophysical exploration and well servicing equipment, 'named insured' means the organization named in the Declarations of this policy and includes any subsidiary company (including subsidiaries thereof) of the Named Insured and any other company of which it assumes active management; 'nuclear material' means source material, special nuclear material, or byproduct material, 'source material' 'special nuclear material' and 'byproduct material' have the meanings given them in the Atomic Energy Act of 1954 or in any law amendatory thereof 'occurrence means an accident, including injurious exposure to conditions,which results,during the policy period, in personal injury or property damage neither expected nor intended from the standpoint of the Insured; 'personal injury means (a) bodily injury sickness, disease, disability shock, mental anguish and mental injury resulting from bodily injury (b) false arrest, detention or imprisonment or malicious prosecution, (c) the publication or utterance of a libel or slander including disparaging statements concerning the condition, value, quality or use of real or personal property or a publication or utterance in violation of rights of privacy except when any of the foregoing of this part (c) arises out of the Insured's advertising, publicity telecasting or broadcasting activities; (d) wrongful entry or eviction, or other invasion of the right of private occupancy (e) discrimination based upon race,regligion, nationality national origin,color creed, sex or age but excluding discrimination committed by at the direction of or with the consent of the Insured and also excluding claims made by reason of discrimination against present or past employees of the Insured or applicants for employment,or claims made by a person deriving rights by reason of discrimination against such present or past employee or applicant for employment,and (f) assault and battery not committed by at the direction of or with the consent of the Insured, unless committed or directed for the purpose of protecting persons or property from injury or death, 'products hazard' includes personal injury and property damage arising out of the Insured's products or reliance upon a representation or warranty made at any time with respect thereto, but only if the personal injury or property damage occurs away from premises owned by or rented to the Insured and after physical possession of such products has been relinguished to others, 'property damage means physical injury to or destruction of tangible property 'ultimate net loss' means the sums for which the Insured is legally liable as damages by reason of a judgment or a settlement made with the written consent of the claimant,the Insured and the Company 'watercraft means a vehicle designed for the transport of persons or property principally on water COND ITIONS 1. Premium The credit ed to the designated in of the declarations at the end of the po cy period. The eared premium which be period shall be computed by application of the rate shown in the policy declarations to the audited exposure base. If the total earned premium so computed is less than the advance premium previously paid, the Company shall return to the named insured the unearned portion paid by the named insured. If the total earned premium exceeds the advance premium, the named insured shall remit to the Company the balance due in accordance with the Company's regular payment terms. 2. Inspection and Audit The Company shall be permitted but not obligated to inspect the Insured's property and operations at any time. Neither the Company's right to make inspections nor the making thereof nor any report thereon shall constitute an undertaking, on behalf of or for the benefit of the Insured or others, to determine or warrant that such property or operations are safe. The named insured shall maintain records of such information as is necessary for premium computation, and shall send copies of such records to the Company at the end of the policy period and at such times during the policy period as the Company may direct.The Company may examine and audit the Insured's books and records at any time during the policy period and extensions thereof and within three years after the final termination of this policy as far as they relate to the subject matter of this insurance. 3. Insured's Duties in the Event of Occurrence,Claim or Suit (a) In the event of an occurrence reasonably likely to involve the Company written notice containing particulars sufficient to identify the Insured and also reasonably obtainable information with respect to the time, place and circumstances thereof and the names and addresses of the injured and of available witnesses, shall be given by or for the Insured to the Company or any of its authorized agents as soon as practicable.The Insured shall promptly take i at his expense all reasonable steps to prevent other personal injury or property damage from arising out of the same or similar conditions, but such expense shall not be recoverable under this policy (b) If claim is made or suit is brought against the Insured,the Insured shall immediately forward to the Company every demand,notice,summons or other process received by him or his representative. (c) The Insured shall cooperate with the Company and upon its request,assist in making settlements, in the conduct of suits and in enforcing any right of contribution or indepnnity against any person or organization who may be liable to the Insured because of personal injury or property damage with respect to which insurance is afforded under this policy and the Insured shall attend hearings and trials and assist in securing and giving evidence and obtaining the attendance of witnesses. The Insured shall not, except at his own cost, voluntarily make any payment, assume any obligation or incur any expense; however in the event that the amount of ultimate net loss becomes certain either through trial court judgment or agreement among the Insured,the claimant and the Company then the Insured may pay the amount of ultimate net loss to the claimant to effect settlement and, upon submission of due proof thereof, the Company shall indemnify the Insured for that part of such payment which is in excess of the retained limit,or will,upon request of the Insured,make such payment to the claimant on behalf of the Insured. Idl The Company at its sole option and without the consent of the insured, may settle any claim or suit involving the limits of liability of this policy or likely to involve its limits.The Company expressly reserves the right to settle such claim or suit for an amount within the Insured's Retained Limit. If the Company elects to pay any or all of the amount of the Insured's Retained Limit to effect settlement of a claim or suit,or any amount in excess of the limits of liability of this policy to effect settlement of a claim or suit,the Insured shall promptly reimburse the Company for such part of the Insured's Retained Limit and the amount in excess of the limits of liability of this policy which has been paid by the Company upon notification of the amount paid by the Company op the Insured's behalf.All named insureds are jointly and severally responsible for any and all reimbursement due to the Company and agree to make such reimbursement if the Insured on whose behalf the Company has made such payment fails to reimburse the Company within 30 days after the Company gives a written demand for payment to such insured. 4. Appeals In the event the Insured elects not to appeal a judgment in excess of the retained limit,the Company may elect to do so at its own expense, but in no event shall the liability of the Company for ultimate net loss exceed the applicable amount specified in the Limits of Liability Section of the Declarations plus all defense costs necessary and incident to such appeal. The Company shall pay its share of interest accruing on the judgment after its entry in a ratio which its proportion of the liability for the judgment rendered bears to the entire amount of said judgment. 5. Action Against The Company No action shall lie against the Company with respect to any one occurrence unless,as a condition precedent thereto,the Insured shall have fully complied with all the terms of this policy nor until the amount of the Insured's obligation to pay an amount of ultimate net loss in excess of the retained limit shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy Nothing contained in this policy shall give any person or organization any right to join the Company as a co-defendant in any action against the Insured to determine the Insured's liability Bankruptcy or insolvency of the Insured shall not relieve the Company of any of its obligations hereunder 6 Other Insurance If collectible insurance with any other insurer is available to the Insured covering a loss also covered hereunder (whether on a primary excess or contingent basis) the insurance hereunder shall be in excess of and shall not contribute with, such other insurance, provided that this clause does not apply with respect to excess insurance purchased specifically to be in excess of this policy or to other insurance which is intended to provide the remainder of the limit of liability stated in the Declarations of this policy when the insurance afforded under this policy provides less than 100 percent of the limit set forth in the Declarations. 7 Subrogation The Company shall be subrogated to the extent of any payment hereunder to all the Insured's rights of recovery therefor- and the Insured shall do nothing after loss to prejudice such rights and shall do everything necessary to secure such rights Any amount so recovered shall be apportioned as follows. Any interest (including the Insured's) having paid an amount in excess of the retained limit plus the limit of liability hereunder shall be reimbursed first to the extent of actual payment. The Company shall be reimbursed next to the extent of its actual payment hereunder If any balance then remains unpaid, it shall be applied to reimburse the , Insured. The expenses of all such recovery proceedings shall be apportioned in the ratio of respective recoveries. If there is no recovery in proceedings conducted solely by the Company it shall bear the expenses thereof S. Changes Notice to any agent or knowledge possessed by any agent or by any other person shall not effect a waiver or a change in any part of this policy or estop the Company from asserting any right under the terms of this policy nor shall the terms of this policy be waived or changed, except by endorsement issued to form a part of this policy 9. Assignment Assignment of interest under this policy shall not bind the Company until its consent is endorsed hereon, if however the Named Insured shall die, such insurance as is afforded by this policy shall apply (a) to the Named Insured's legal reprdsentative, as the Named Insured, but only while acting within the scope of his duties as such, and (b) with respect to the property of the Named Insured, to the person having proper temporary custody thereof as Insured, but only until the appointment and qualification of the legal representative. 10. Funding of Insured's Retained Limit The Insured agrees to maintain a loss fund in an amount to be determined by mutual agreement among the Insured, the servicing organization designated in the policy declarations, and the Company for the payment of all claims and expenses falling within the Insured's retained limit This fund shall be reimbursed as necessary to maintain a balance in accordance with the terms of the servicing agreement between the Insured and the servicing organization. In the event of cancellation, expiration or revision of the contract between the Insured and the servicing organization, the Insured shall notify the Company thereof within ten days of the effective date of such cancellation, expiration or revision. 11 Cancellation This policy may be cancelled by the Named Insured by surrender thereof to the Company or any of its authorized agents or by mailing to the Company written notice stating when thereafter the cancellation shall be effective. This policy may be cancelled by the Company by mailing to the Named Insured at the address shown in this policy written notice stating when, not less than thirty days thereafter such cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient notice. The time of surrender or the effective date and hour of cancellation stated in the notice shall become the end of the policy period. Delivery of such written notice either by the Named Insured or by the Company shall be equivalent to mailing. If the Named Insured cancels, earned premium shall be computed in accordance with the customary short rate table and procedure. If the Company cancels, earned premium shall be computed pro rata. Premium adjustment may be made either at the time cancellation is effected or as soon as practicable after cancellation becomes effective, but payment or tender of unearned premium is not a condition of cancellation. 12. Service of Suit It is agreed that in the event of the failure of the Company to pay any amount claimed to be due hereunder the Company at the request of the Insured, will submit to the jurisdiction of any court of competent jurisdiction within the United States and will comply with all requirements necessary to give such court jurisdiction and all matters arising hereunder shall be determined in accordance with the law and practice of such court. It is further agreed that service of process in such suit may be made upon Ronald A. Jacks, CNA Plaza, Chicago Illinois, and that in any suit instituted against such person upon this policy the Company will abide by the final decision of such court or of any appellate court in the event of an appeal. The above-named is authorized and directed to accept service of process on behalf of the Company in any such suit and, upon the request of the Insured, to give a written undertaking to the Insured that he will enter a general appearance upon the Company's behalf in the event such suit shall be instituted. Further persuant to any statute of any state, territory or district of the United States which makes provision therefor the Company hereby designates the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his successor or successors in office, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Insured or any beneficiary hereunder arising out of this contract of insurance,and hereby designates the above-named as the person to whom the said officer is authorized to mail such process or a true copy thereof 13. First Named Insured The Insured first named in item 1 in the declarations is authorized to act on behalf of all named insureds and other insureds with respect to the giving and receiving of notice of cancellation and to receiving any return premium that may become payable under this policy The Insured first named in item 1 in the declarations is responsible for the payment of all premiums but the other named insureds jointly and severally agree to make such premium payments in full if the Insured first named in item 1 fails to pay the amount due within thirty days after the Company gives a written demand for payment to the Insured first named in item 1 In Witness Whereof the Company has caused this policy to be signed by its Chairman of the Board and Corporate Secretary at Chicago, Illinois, but the same shall not be binding upon the Company unless countersigned on the Declarations page by a duly authorized representative of the Company r‘t e Corporate Secretary 4 / Chairman of the Board