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PILLSBURY & COLEMAN, LLP
The Transamerica Pyramid
600 Montgomery Street, 31st Floor - San Francisco, CA 94111
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ELECTRONICALLY
FILED
Superior Court of California,
Philip L. Pillsbury, Jr. (SBN 72261) County of San Francisco
Eric K. Larson (SBN 142791) 03/05/2019
PILLSBURY & COLEMAN, LLP Clerk of the Court
The Transamerica Pyramid Deputy Clerk
600 Montgomery Street, 31" Floor
San Francisco, CA 94111
Telephone: (415) 433-8000
Facsimile: (415) 433-4816
ppillsbury @pillsburycoleman.com
rlarson@pillsburycoleman.com
Attorneys for Plaintiffs
HANFORD FREUND & COMPANY, a California
corporation, and POWELL PARTNERS, LLC,
a California Limited Liability Company
SUPERIOR COURT OF CALIFORNIA
IN AND FOR THE COUNTY SAN FRANCISCO
HANFORD FREUND & COMPANY, a Case No. CGC-18-568623
California corporation, and POWELL
PARTNERS, LLC, a California
Limited Liability Company,
EXHIBIT A TO FIRST AMENDED
COMPLAINT FOR (1) BREACH OF
CONTRACT; (2) BREACH OF
IMPLIED COVENANT OF GOOD
FAITH AND FAIR DEALING; (3)
BREACH OF CONTRACT; (4)
BREACH OF IMPLIED COVENANT
OF GOOD FAITH AND FAIR
DEALING; (5) DECLARATORY
RELIEF; (6) PROFESSIONAL
NEGLIGENCE; AND (7) NEGLIGENT
MISREPRESENTATION; DEMAND
FOR JURY TRIAL
Plaintiffs,
vs.
HOMELAND INSURANCE COMPANY
OF NEW YORK, a.Minnesota corporation;
HUB INTERNATIONAL INSURANCE
SERVICES, INC., a California corporation;
TRAVELERS PROPERTY CASUALTY
COMPANY OF AMERICA, a Connecticut
corporation; and DOES 1 through 10,
inclusive, J
Defendants.
eee
1
EXHIBIT A TO FIRST AMENDED COMPLAINT; DEMAND FOR JURY TRIAL. Case No. CGC-18-568623MS 01 00 05 13
THE TRAVELERS INSURANCE COMPANIES
One Tower Square
Hartford, CT 06183
DECLARATIONS
Policy Number: KTJ-CMB-7F43519-2-17 Issue Date: 05/08/2017
NAMED INSURED AND MAILING ADDRESS:
HANFORD-FREUND & COMPANY
47 KEARNY STREET,4TH FLOOR
SAN FRANCISCO, CA 94108
POLICY PERIOD: FROM: 04/01/2017 TO: 04/01/2018
Effective 12:01 a.m. at description and location of property covered.
COVERAGE FORMS AND ENDORSEMENTS FORMING A PART OF THIS POLICY.
The complete policy consists of this Declarations and the Supplemental Coverage Declarations and the forms listed
on MS CO 02 07 99.
PREMIUM: Per Agency Bill Statement 7F435192
INSURING COMPANIES:
In return for payment of the premium, the Company agrees with the Named Insured to provide the insurance
afforded by this policy. That insurance will be provided by the Company designated by an “X” below.
x Travelers Property Casualty Company of America (a Stock Company)
Secretary President
The company listed above has executed this policy, but it is valid only if countersigned by our authorized
representative.
PRODUCER NAME AND ADDRESS Countersigned by:
HUB INTL INS SERVICES . (Authorized Representative)
580 CALIFORNIA ST STE 1300 Date:
SAN FRANCISCO, CA 94104
Page 1 of IINDEX OF FORMS
Index of Forms
Supplemental Coverage Declarations
Property Coverage Form
Business Income Coverage Form Excluding Extra Expense
Extra Expense
Earthquake Sprinkler Leakage
Flood
Boiler And Machinery
Windstorm Provisions
Fungus, Wet Rot, Dry Rot and Other Cause of Loss Changes
Exclusion Nuclear Hazard War Military Action Electronic VMM & Pathogenic.
Exclusion of Loss Due to Virus or Bacteria
Expediting Expenses - Boiler and Machinery
Tenant Move Back Expenses
Reimbursement of Master Key Costs
Utility Services - Direct Damage
Preservation and Protection of Property
Utility Services - Time Element
General Conditions
Replacement Cost
Errors and Omissions
Extra Expense Deductible
Claim Data Expense
Prohibited Cov Endt
High and Moderate Hazard Earthquake Areas - U.S.A
High Hazard Wind Areas - U.S.A.
Loss Payable Provisions
Additional Insured
Exclusion Certain Computer Losses Due to Dates or Times (Prop & BM
Coverages)
Condominium Association Endorsement
California Changes - Cancellation and Nonrenewal
California Changes
JURISDICTIONAL INSPECTIONS OF EQUIP IN THE USA(INCL ITS
TERRITORIES/POSSESSIONS)
IMPORTANT NOTICE REGARDING INDEPENDENT AGENT AND BROKER
COMPENSATION
Terrorism Disclosure
Cap on Certified Terrorism
POLICY COVERAGE FORM - CHANGES
RELOCATION EXPENSE FOR DISPLACEMENT OF TENANT HOUSEHOLD
Page 1 of 1
KTJ-CMB-7F43519-2-17
MS CO 02 07 99
MS CO 02 07 99
MS CO 03 07 99
MS C1 00 08 07
MS C1 02 02 00
MS C1 03 07 99
MS C2 03 07 99
MS C2 06 10 15
MS C2 10 01 00
MS C2 23 10 15
MS C2 35 02 07
MS C2 39 12 02
MS C2 42 02 07
MS C3 20 07 99
MS C3 23 07 99
MS C325 07 99
MS C3 27 07 99
MS C3 43 12 11
MS C4 09 07 99
MS C5 02 01 00
MS C5 05 07 99
MS C5 26 07 99
MS C5 27 03 00
MS C5 30 10 02
MS C5 41 03 15
MS C6 05 10 15
MS C6 06 10 15
MS C6 1107 99
MS C6 1207 99
MS C8 02 07 99
MS C8 06 11 10
MS C8 42 09 12
MS C8 43 05 05
PN T1 89 1015
PN T4 54 01 08
TR IA 01 01 15
TR IA 04 01 15
Endorsement 1
Endorsement 2Supplemental Coverage Declarations
MS CO 03 07 99
READ THE ENTIRE POLICY CAREFULLY TO DETERMINE RIGHTS, DUTIES AND WHAT IS AND IS
NOT COVERED.
A.. POLICY LIMIT: In no event shall liability under this policy arising out of one occurrence exceed
$5,000,000, nor shall liability exceed any specific Limit of Insurance applying to any insured loss,
coverage or location(s).
B. LIMITS OF INSURANCE - For application of Limits of Insurance refer to Section O. Limits of
Insurance in the General Conditions:
1.
10.
11.
12.
13,
14,
Buildings, in any one occurrence:
Included means included in the Policy Limit.
Business Personal Property, in any one occurrence:
Included means included in the Policy Limit.
Electronic Data Processing Equipment and Electronic Data
Processing Data and Media, in any one occurrence:
Accounts Receivable, in any one occurrence:
Valuable Papers, in any one occurrence:
Fine Arts, in any one occurrence:
subject to a maximum per item of:
Newly Constructed or Acquired Property, at any one building,
In any one occurrence:
Number of days 120.
Outdoor Property including Debris Removal, in any one
occurrence:
Trees, shrubs and plants are subject to a maximum per
item of:
Personal Effects of Officers and Employees of the Insured:
per Employee:
in any one occurrence:
Covered Property at Undescribed Premises, in any one
occurrence:
Covered Property in Transit, in any one occurrence:
Debris Removal (additional), in any one occurrence:
Pollutant Cleanup and Removal, aggregate in any one policy
year:
Claim Data Expense, in any one occurrence:
Page 1 of 5
KTJ-CMB-7F43519-2-17
CR 8 8
Included
Included
1,000,000
1,000,000
1,000,000
100,000
1,000
2,500,000
250,000
2,500
1,000
100,000
100,000
100,000
1,000,000
100,000
25,000MS CO 03 07 99
15. Ordinance or Law
Loss to the Undamaged Portion, in any one occurrence: $ 5,000,000
Demolition, in any one occurrence: Included
Increased Cost of Construction, in any one occurrence: Included
Included means, included in the Limit shown for Loss to the
Undamaged Portion.
16. Rental Value, in any one occurrence: Included
Included means, included in the Policy Limit.
Extended Rental Value at 60 days.
Civil Authority 30 days.
Ordinance or Law - Increased Period of Restoration, in any
one occurrence: $ 250,000
Newly Acquired Locations, in any one occurrence:
Number of days 120. $ 500,000
Claim Data, in any one occurrence: $ 25,000
17. Extra Expense, in any one occurrence: $ 1,000,000
Civil Authority 30 days.
Ordinance or Law - Increased Period of Restoration, in any
one occurrence: $ 50,000
Newly Acquired Locations, in any one occurrence:
Number of days 120. $ 50,000
Claim Data, in any one occurrence: $ 25,000
18. Earthquake Sprinkler Leakage — aggregate in any one policy
year, for all losses covered under this policy, commencing with
the inception date of this policy:
a. Occurring in Alaska, Hawaii or Puerto Rico: Not Covered
b. Occurring in California: $ 5,000,000
¢. Occurring in High and Moderate Hazard Earthquake and
Volcanic Eruption Areas as per MS C6 05: Not Covered
d. Occurring anywhere else in the Policy Territory: $ 5,000,000
If more than one Annual Aggregate Limit applies in any one
occurrence, the most the Company will pay is the highest
involved Annual Aggregate Limit. The most the Company will
pay during each annual period is the largest of the Annual
Aggregate Limits shown.
19. Flood — aggregate in any one policy year, for all losses
covered under this policy, commencing with the inception date
of this policy:
Page 2 of 5
KTJ-CMB-7F43519-2-1721.
22,
23.
24,
MS CO 03 07 99
Occurring at all Insured Premises, except this policy does not
cover loss resulting from Flood to buildings, structures or
property in the open within Zone A, Zones prefixed A, Zone V
or Zones prefixed V as classified under the National Flood
Insurance Program or to property in or on buildings or
structures located within such Flood Zones: $ 5,000,000
Any loss resulting from Flood to a building, structure or
property in the open which is, at the time of loss, within more
than one Flood Zone will be subject to the insurance and
Annual Aggregate Limit, if any, that would apply under this
policy if that building, structure or property in the open was
wholly located within the most hazardous of the Flood Zones,
as identified in MS C2 06, in which it is located. The Flood
Zone that applies to a building or structure will also apply to
any property in or on such building or structure.
If, at the time of loss resulting from Flood, the community in
which property is located has been suspended from the
National Flood Insurance Program, the Flood Zone(s) that
applied prior to the suspension will be used in determining the
Flood Zone(s) that apply to the property.
If more than one Annual Aggregate Limit applies in any one
occurrence, the most the Company will pay is the highest
involved Annual Aggregate Limit. The most the Company will
pay during each annual period is the largest of the Annual
Aggregate Limits shown.
Boiler and Machinery (Insured’s Locations only)
Property Damage, in any one accident: Included
Rental Value, in any one accident: Included
Extra Expense, in any one accident: Included
Hazardous Substance, in any one accident:
Ammonia Contamination: $ 100,000
Any other substance: $ 100,000
Water Damage, in any one accident: $ 100,000
Included means, included in the Limit of Insurance that
otherwise applies under this policy to the coverage for which
included is indicated.
Limited “Fungus,” Wet Rot and Dry Rot Coverage:
a. Direct Damage
In any one.occurrence: $ 25,000.
Aggregate, in any one policy year: $ 250,000
b. Rental Value and Extra Expense
Number of days: 30
Expediting Expenses, Boiler & Machinery only, in any one
occurrence: $ 100,000
Tenant Move Back Expenses, in any one occurrence: $ 50,000
Reimbursement of Master Key Costs, in any one occurrence: $ 25,000
Page 3 of 5
KTJ-CMB-7F43519-2-1725.
26.
27.
28,
MS CO 03 07 99
Errors and Omissions, in any one occurrence: $ 1,000,000
Utility Services — in any one occurrence:
Utility Services Combined Direct Damage and Time Element,
including Boiler and Machinery: $ 100,000
Underground Pipes, as described in Endorsement 1, in
any one occurrence: $ 1,000,000
Relocation Expense for Displacement of Tenant
Household, as per Endorsement 2, aggregate in any
one policy year, for all losses covered under this policy,
commencing with the inception date of this policy: $ 50,000
C. DEDUCTIBLES: For application of Deductibles refer to Section B. Application of Deductibles in
the General Conditions
1.
To Rental Value Coverage, for which no other:
deductible is stated, in any one occurrence: Hours 48
To Extra Expense Coverage, for which no other
deductible is stated, in any one occurrence: Hours 48
By Earthquake Sprinkler Leakage, in any one
occurrence: $ 25,000
As respects Rental Value, the deductible is included in
the occurrence deductible.
As respects Extra Expense, the deductible is included
in the occurrence deductible.
By Flood, in any one occurrence: $ 5,000
As respects Rental Value, the deductible is included in the
occurrence deductible.
As respects Extra Expense, the deductible is included in the
occurrence deductible.
Any loss resulting from Flood to a building, structure or
property in the open which is, at the time of loss, within more
than one Flood Zone will be subject to the Flood deductible, if
any, that would apply under this policy if that building,
structure or property in the open was wholly located within the
most hazardous of the Flood Zones, as identified in MS C2 06,
in which it is located. The Flood Zone and Flood deductible
that applies to a building or structure will also apply to any
property in or on such building or structure.
If, at the time of loss resulting from Flood, the community in
which property is located has been suspended from the
National Flood Insurance Program, the Flood Zone(s) that
applied prior to the suspension will be used in determining the
Flood Zone(s) that apply to the property.
Page 4 of 5
KTJ-CMB-7F43519-2-1710.
11.
By Windstorm, as per MS C2 23:
a. Occurring in High Hazard Wind Areas, as per
MS C6 06, in any one occurrence:
Percentage applies per Unit
b. Occurring at all other premises, in any one
occurrence:
As respects Rental Value, any applicable percent
deductible shown above applies.
As respects Rental Value, if no percent deductible
applies, the deductible for Rental Value is included in
the occurrence deductible.
As respects Extra Expense, the deductible is included
in the occurrence deductible.
By Boiler and Machinery in any one accident:
Applicable to Direct Damage only.
By Boiler and Machinery to Rental Value, in any one
accident:
By Boiler and Machinery to Extra Expense, in any one
accident:
To Utility Services - Direct Damage, including Boiler and
Machinery, in any one occurrence:
To Utility Services - Time Element, including Boiler and
Machinery, in any one occurrence:
To any other covered loss, in any one occurrence:
D. VALUATION PROVISION:
% §$
$
$
Hours
Hours
$
Hours
$
Replacement Cost applies as per MS C5 05, except as otherwise stated
within endorsement MS C5 05, within this Supplemental Declarations or
elsewhere in this policy.
MS CO 03 07 99
250,000
100,000
5,000
24
24
5,000
48
5,000
E—. SOLE AGENT PROVISION: For any insurance afforded by this policy, HANFORD-FREUND &
COMPANY shall act on behalf of all insureds with respect to the giving and receiving of notice of
cancellation or nonrenewal, the payment of premiums and the receiving of return premiums, and
accepting of any endorsement issued to form a part of this policy.
F. PREMIUM ADJUSTMENT: This policy will be adjusted Annually for any changes in values and
premiums.
G. ISSUING COMPANY: Travelers Property Casualty Company of America (a Stock Company)
Page 5 of 5
KTJ-CMB-7F43519-2-17MS C1 00 08 07
PROPERTY COVERAGE FORM
Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and
what is and is not covered. Words and phrases that appear in quotation marks have special meaning; refer to
Section G., Definitions.
A.
INSURING AGREEMENT
The Company will pay for direct physical loss or damage to Covered Property at premises as described in the
most recent Statement of Values or other documentation on file with the Company, caused by or resulting from
a Covered Cause of Loss. Covered Cause of Loss means risks of direct physical loss unless the loss is
excluded in Section D., Exclusions; limited in Section E., Limitations; or excluded or limited in the Supplemental
Coverage Declarations or by endorsements.
COVERAGE
Coverage is provided for Covered Property and Covered Costs and Expenses, as described in Sections B.1.
and B.2., for which the Insured has an insurable interest, unless excluded in Section C., Property and Costs Not
Covered. Coverage applies only when a Limit of Insurance is shown in the Supplemental Coverage Declarations
for the specific type of Covered Property or Covered Costs and Expenses, except for items B.2. a., d., @., g., h.
and i. which do not require a specific Limit of Insurance to be shown.
1. COVERED PROPERTY
a. Building(s), means the buildings or other structures at the Insured’s premises, including:
(1) Completed additions;
(2) Fixtures, including outdoor fixtures;
(3) Machinery and equipment permanently attached to the building;
(4) Personal property owned by the Insured that is used to maintain or service the buildings, structures
or grounds; and
(5) If not covered by other insurance:
(a) Additions under construction, alterations and repairs to the buildings or structures; and
(b) Materials, equipment, supplies and temporary structures, on or within 1,000 feet of the
Insured’s premises, used for making alterations or repairs to the buildings or structures.
Building(s) do not include “Outdoor Property” except as provided in Section B.1.h.
b. Business Personal Property located in or on the buildings at the Insured’s premises or in the open (or
in a vehicle) within 1,000 feet of the Insured’s premises, consisting of the following unless otherwise
specified in the Supplemental Coverage Declarations:
(1) Furniture and fixtures;
(2) Machinery and equipment;
(3) “Stock”;
(4) All other personal property owned by the Insured and used in the Insured’s business;
(5) Labor, materials or services furnished or arranged by the Insured on personal property of others;
(6) The Insured’s use interest-as tenant in improvements and betterments. Improvements and
betterments are fixtures, alterations, installations or additions:
(a) Made a part of the buildings or structures occupied or leased, but not owned, by the Insured;
and
(b) Acquired or made at the Insured’s expense but which the Insured is not permitted to remove;
and
Personal Property of Others (including the Insured’s employees) used in the Insured’s business that
is in the care, custody, or control of the Insured or for which the Insured has agreed in writing to
insure prior to any loss or damage.
(7)
However, payment by the Company for loss or damage to Personal Property of Others will only be
for the account of the owner of the property.
Business Personal Property does not include:
Page 1 of 14
KTJ-CMB-7F43519-2-17MS C1 00 08 07
(1) “Electronic Data Processing Equipment” or “Electronic Data Processing Data and Media” except as
provided in Section B.1.c.;
(2) Accounts Receivable except as provided in Section B.1.d.;
(3) Valuable Papers except as provided in Section B.1.¢.; or
(4) “Fine Arts” except as provided in Section B.1.f.
c. “Electronic Data Processing Equipment” and “Electronic Data Processing Data and Media”
This insurance applies to loss or damage to “Electronic Data Processing Equipment” and “Electronic
Data Processing Data and Media’ at or within 1,000 feet of the Insured’s premises.
d. Accounts Receivable
This insurance applies to loss or damage to the accounts receivable records of the Insured while at or
within 1,000 feet of the Insured’s premises, including records stored on electronic data processing
media. Credit card company charge records will be considered accounts receivable records until
delivered to the credit card company.
(1). The Company will pay:
(a) Amounts due the Insured from customers that the Insured is unable to collect because of loss
or damage to the Insured’s accounts receivable records;
(b) Interest charges on any loan required to offset amounts the Insured is unable to collect
because of loss or damage to the Insured’s accounts receivable records, pending the
Company's payment of these amounts;
(c) Collection expenses in excess of the Insured’s normal collection expenses that are made
necessary by the loss; and
(d) Other reasonable expenses that the Insured incurs to re-establish the Insured’s records of
Accounts Receivable.
(2) The following additional exclusions apply to Accounts Receivable:
The Company will not pay for loss or damage caused by or resulting from any of the following:
(a) Bookkeeping, accounting or billing errors or omissions; and
(b) Alteration, falsification, manipulation, concealment, destruction or disposal of records of
accounts receivable committed to conceal the wrongful giving, taking, obtaining or withholding
of money, securities or other property but only to the extent of such wrongful giving, taking,
obtaining or withholding.
(3) The Company will not pay for loss or damage that requires an audit of records or any inventory
computation to prove its factual existence.
(4) In the event the Insured cannot accurately establish the amount of Accounts Receivable
outstanding as of the time of loss, the following method will be used:
(a) The Company will determine the total of the average monthly amounts of Accounts Receivable
for the 12 months immediately preceding the month in which the loss occurs;
(b) The Company will adjust the total for any normal fluctuations in the amounts of Accounts
Receivable for the month in which the loss occurred or for any demonstrated variance from the
average for that month; and
(c) The following will be deducted from the total amount of Accounts Receivable, however that
amount is established:
(i)> The amount of the accounts for which there is no loss;
(ii) The amount of the accounts that the Insured is able to re-establish or collect;
(iii) An amount to allow for probable bad debts that the Insured is normally unable to collect;
and
(iv) All unearned interest and service charges.
e. Valuable Papers and Records
Page 2 of 14
KTJ-CMB-7F43519-2-17MS C1 00 08 07
This insurance applies to loss or damage to Valuable Papers and Records while at or within 1,000 feet
of the Insured’s premises. Coverage does not apply to Valuable Papers and Records that exist on
electronic data processing media.
f. “Fine Arts”
This insurance applies to loss or damage to “Fine Arts” while at or within 1,000 feet of the Insured’s
premises.
g. Newly Constructed or Acquired Property
This insurance applies to:
(1) New buildings while being built on the Insured’s premises or on a newly acquired location including
materials, equipment, supplies and temporary structures which are at or within 1,000 feet of the
premises;
(2) Buildings newly acquired by the Insured at locations other than the Insured’s premises;
(3) Buildings the Insured becomes newly required to insure under a written contract; and
(4) Personal Property of a type insured under this policy at or within 1,000 feet of a newly acquired
building or a newly acquired location.
Insurance under this Coverage for each newly constructed or acquired property will end when any of the
following first occurs:
(1) This policy is cancelled or expires;
(2) 120 days expire after the Insured acquires or begins to construct the building(s);
(3) The Insured reports the new values to the Company; or
(4) The property is more specifically insured elsewhere.
The Company will charge the Insured additional premium for values reported from the date construction
begins or the Insured acquires the property.
h. “Outdoor Property”
This insurance applies to “Outdoor Property’ at the Insured’s premises for loss or damage only by the
following Covered Causes of Loss:
(1) Fire;
(2) Lightning;
(3) Explosion;
(4) Riot or civil commotion;
(5) Vandalism or malicious mischief; or
(6) Aircraft or vehicles.
This insurance also applies to the necessary and reasonable expense incurred by the Insured to
remove debris of “Outdoor Property” at the Insured’s premises caused by or resulting from a Covered
Cause of Loss listed above that occurs during the policy period. Such expenses will be paid only if
reported to the Company in writing within 180 days of the date of direct physical loss or damage. This
will not increase the Limit of Insurance that applies to “Outdoor Property’.
i. Personal Effects of Officers and Employees of the Insured
This insurance applies to the.Personal Effects and “Fine Arts” owned by officers, partners or employees
of the Insured. Such property must be located at or within 1000 feet of the Insured’s premises.
Payment for loss or damage to Personal Effects and “Fine Arts” will only be for the account of the owner
of the property.
j. _ Covered Property At Undescribed Premises
This insurance applies to:
(1) Covered Property at an “exhibition” including while in transit to and from the “exhibition” site.
Coverage for this property applies worldwide except within any country on which the United States
government has imposed sanctions, embargoes or any other similar prohibitions.
(2) Covered Property that will or has become a permanent part of an installation project being
performed for others by the Insured, or on the Insured’s behalf, while such property is at the
installation premises or at other premises where the property is temporarily stored. Coverage for
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KTJ-CMB-7F43519-2-17MS C1 00 08 07
this installation property applies only within the Policy Territory and will apply only until the Insured’s
interest in the property ceases, the installation is accepted, the installation is abandoned, or this
policy is cancelled or expires, whichever occurs first.
(3) Covered Property at any other premises within the Policy Territory which are not otherwise insured
under this policy, and which the Insured does not own, lease or regularly operate.
This Coverage does not apply to Personal Effects of Officers and Employees of the Insured.
k. Covered Property in Transit
This insurance applies to Covered Property in due course of transit at the risk of the Insured between
points within the Policy Territory, including inland and coastal waters and air space.
This Coverage will attach when the Covered Property leaves the initial point of shipment and will
continue until the property is delivered at its destination. In the event the Covered Property is not
deliverable or is rejected by the consignee, such property will be covered while in due course of transit
back to the Insured and while temporarily being held by the receiver or carrier awaiting its return to the
Insured.
The Company will also pay for:
(1) Any general average or salvage charges incurred by the Insured as respects losses to waterborne
shipments.
(2) The Insured’s contingent interest in shipments sold on a F.O.B. (Free On Board) basis but only in
the event that any loss recoverable hereunder is not collectible from the consignee or any other
insurance.
(3) Loss of Covered Property occasioned by the unintentional acceptance of fraudulent bills of lading,
shipping receipts or messenger receipts by the Insured or any agent, customer or consignee of the
Insured.
This Coverage does not apply to:
(1) Shipments by a government postal service except by registered mail;
(2) Any export shipment once the earlier of the following occurs:
(a). The shipment is placed on the export conveyance; or
(b) Coverage under an Ocean Marine or other insurance policy covering the shipment begins;
(3) Any import shipment until the later of the following occurs:
(a). The shipment is unloaded from the importing vessel or conveyance; or
(b) Coverage under an Ocean Marine or other insurance policy covering the shipment ends;
(4) Theft from a conveyance or container while unattended unless the portion of the conveyance or
container containing the Covered Property is fully enclosed and securely locked, and the theft is by
forcible entry of which there is visible evidence;
(5) Property of others for which the Insured is responsible while acting as a common or contract carrier,
freight forwarder, freight consolidator, freight broker or public. warehouseman; or
(6) Personal Effects of Officers and Employees of the Insured or to Covered Property in due course of
transit to or from an “exhibition”.
1. Covered Property Overseas
The Company will pay for loss or damage to Covered Property while in the custody of any officer or
employee of the Insured while temporarily traveling outside of the Policy Territory. But this Coverage
does not apply to Covered Property at, or in due course of transit to or from, an “exhibition”.
Coverages j. Covered Property At Undescribed Premises, k. Covered Property in Transit and |. Covered
Property Overseas are each subject to the applicable Limit of Insurance specified in the Supplemental
Coverage Declarations for the coverage, but in no event will the Company pay more for loss or damage to
any type of Covered Property than the amount that would have been paid if the loss or damage had
occurred at or within 1000 feet of the Insured’s premises.
2. COVERED COSTS AND EXPENSES
a. Debris Removal
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(1) The Company will pay the necessary and reasonable expense incurred by the Insured to remove
debris of Covered Property, other than “Outdoor Property”, caused by or resulting from a Covered
Cause of Loss that occurs during the policy period. Such expenses will be paid only if reported to
the Company in writing within 180 days of the date of direct physical loss or damage. Coverage for
the expense to remove debris of “Outdoor Property’ is provided separately under Section B.1.h. of
this Coverage Form.
For this Debris Removal Coverage, the Company will pay up to 25% of:
(a) The amount the Company pays for the direct physical loss or damage to the Covered Property;
plus
(b) The deductible in this policy applicable to that direct physical loss or damage.
8
This limit is part of and not in addition to the Limit of Insurance that applies to the lost or damaged
Covered Property. But if:
(a) (i) The sum of direct physical loss or damage and debris removal expense exceeds the Limit
of Insurance; or
(ii) The debris removal expense exceeds the above 25% limitation;
and
(b) A Limit of Insurance is specified in the Supplemental Coverage Declarations for Debris
Removal (additional);
the Company will also pay an additional amount, up to the Limit of Insurance specified in the
Supplemental Coverage Declarations for Debris Removal (additional) .
(3
In no event will this Debris Removal Coverage apply to:
(a) Costs to extract “pollutants” from land or water; or
(b) Costs to remove, restore or replace polluted land or water.
b. Pollutant Cleanup and Removal
The Company will pay the necessary and reasonable expense incutred by the Insured to extract
“pollutants” from land or water at the Insured’s premises if the discharge, dispersal, seepage, migration,
release or escape of the “pollutants” is caused by or results from a “specified cause of loss” which
occurs during the policy period.
Such expenses will be paid only if reported to the Company in writing within 180 days of the date on
which the “specified cause of loss” occurs.
This Coverage does not apply to costs to test for, monitor or assess the existence, concentration or
effects of “pollutants”. But the Company will pay for testing which is performed in the course of
extracting the “pollutants” from the land or water.
The most the Company will pay under this Coverage for the sum of all covered expenses arising out of
all "specified cause of loss” occurrences that occur during each separate 12 month period of this policy
is the Limit of Insurance specified for.Pollutant Cleanup and Removal shown in the Supplemental
Coverage Declarations.
c. Claim Data Expense
The Company will pay the reasonable expenses incurred by the Insured in preparing claim data
required by the Company. This includes the cost of taking inventories, making appraisals and preparing
other documentation to show the extent of loss. The Company will not pay for any expenses incurred,
directed, or billed by or payable to insurance adjusters or their associates or subsidiaries, or any costs -
as provided in the General Conditions - Section C. Appraisal.
d. Fire Department Service Charge
When the fire department is called to save or protect Covered Property from a Covered Cause of Loss,
the Company will pay for any fire department service charges incurred by the Insured that are:
(1) Assumed by contract or agreement prior to loss; or
(2) Required by local ordinance.
e. Fire Protective Equipment Discharge
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If fire protective equipment discharges accidentally or to control a Covered Cause of Loss, the
Company will pay the Insuréd’s cost to:
(1) Refill or recharge the system with the extinguishing agents that were discharged; and
(2) Replace or repair faulty valves or controls that caused the discharge.
f. Ordinance or Law
If a Covered Cause of Loss occurs to Covered Property, the Company will pay for:
(1) The loss to the undamaged portion of a covered building caused by the enforcement of any
ordinance or law that:
(a) Requires the demolition of parts of the same property not damaged by a Covered Cause of
Loss;
(b) Regulates the construction or repair of buildings, or establishes zoning or land use
requirements at the Insured’s premises; and
(c) Is in force at the time of loss.
The most the Company will pay for loss or damage under this portion of Ordinance or Law is the
Limit of Insurance specified for Ordinance or Law — Undamaged Portion shown in the Supplemental
Coverage Declarations.
2)
The cost to demolish and clear the site of undamaged parts of the covered building caused
by the enforcement of building, zoning or land use ordinance or law.
The Company will not pay more for loss or damage under this portion of Ordinance or Law than the
lesser of:
(a) The amount the Insured actually spends to demolish and-clear the site; or
(b) The Limit of Insurance specified for Ordinance or Law — Demolition shown in the Supplemental
Coverage Declarations.
(3)
The increased cost to repair, rebuild or construct the Covered Property caused by
enforcement of building, zoning, land use or any other ordinance or law when the Covered Property
is insured for replacement cost. If the covered building is repaired or rebuilt, it must be intended for
similar occupancy as the current building, unless otherwise required by zoning or land use
ordinance or law.
The Company will not pay for increased construction costs until the Covered Property is actually
repaired or replaced, at the same location or elsewhere; and unless the repairs or replacement are
made as soon as reasonably possible after the loss or damage but not to exceed 2 years. The
Company may extend this period in writing during the 2 years.
The most the Company will pay for loss or damage under this portion of Ordinance or Law is the
increased cost of construction repair or replacement:
(a) Of a building of the same size and at the same premises, or another premises if required by the
ordinance or law; and
(b) Limited to the minimum requirements of such ordinance or law regulating the repair or
reconstruction of the damaged property on the same site.
not to exceed the Limit of Insurance specified for Ordinance or Law — Increased Cost of
Construction shown in the Supplemental Coverage Declarations.
(4)
Ordinance or Law Coverages do not apply to:
(a) “Vacant” properties;
(b) Any loss due to the Insured’s failure to comply with any ordinance or law that the Insured was.
required to comply with before the loss, even if the Covered Property was undamaged; and
(c). Costs associated with the enforcement of any ordinance or law that requires the Insured or
others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way
respond to, or assess the effects of “pollutants”.
g. Preservation of Property
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If it becomes necessary to move Covered Property from an insured premises to preserve it from loss or
damage by a Covered Cause of Loss, the Company will pay for:
(1) The necessary and reasonable expenses actually incurred by the Insured to remove the Covered
Property from an insured premises and to move the Covered Property back to an insured premises;
and
(2) Any direct physical loss or damage to Covered Property while it is being moved from an insured
premises, while temporarily stored at another location or while it is being moved back to an insured
premises.
However, this Coverage will apply only if the loss or damage occurs within 90 days after the property is
first moved and will cease when the policy is amended to provide insurance at the new location, the
property is returned to the existing location, or this policy is cancelled or expires, whichever occurs first.
h. Protection of Property
The Company will pay the necessary and reasonable expenses actually incurred by the Insured to
temporarily safeguard Covered Property against the threat of imminent direct physical loss or damage
by a “specified cause of loss”. This Coverage does not apply to any expenses to which the above
Preservation of Property coverage applies.
i. Water, Other Liquids, Powder or Molten Material Damage
If covered loss or damage caused by or resulting from water or other liquid, powder or molten material
damage occurs, the Company will also pay the cost to tear out and replace any part of the building or
structure to repair damage to the system or appliance from which the water or other substance
escapes.
When a Limit of Insurance is specified in the Supplemental Coverage Declarations for Water, Other
Liquids, Powder or Molten Material Damage, that Limit of Insurance is the most the Company will pay
under this Coverage. Otherwise, this coverage is provided subject to the Limit of Insurance that applies
to the covered water or other liquid, powder or molten material damage loss.
C. PROPERTY AND COSTS NOT COVERED
Unless the following property or costs are added by endorsement to this Coverage Form, Covered Property and
Covered Costs and Expenses do not include:
1. Currency, deeds or other evidences of debt, money, notes, checks, drafts, or securities;
2. Contraband or property in the course of illegal transportation or trade;
3. Water whether in its natural state or otherwise, above or below ground (except water normally contained in
plumbing, the process of manufacture or fire protection equipment) watercourses, aquifers or the cost of
reclaiming or restoring water;
4. Land whether in its natural state or otherwise (including land on which the property is located), land
improvements, grain, hay straw or other harvested crops while outside of buildings, growing crops or
standing timber;
The cost of excavations, grading, backfilling or filling;
Property sold by the Insured under an installment plan, conditional sale, trust agreement or other deferred
payment plan after delivery to the purchasers;
7. Vehicles or self-propelled machines that:
(a) Are licensed for use on public roads; or
(b) Are operated principally away from the insured premises;
8. Aircraft or watercraft;
9. Live animals or birds;
10. Bulkheads, pilings, piers, wharves, docks, dikes, dams, canals, sea walls or vehicular bridges;
11. Underground tanks, pipes, flues, drains or tunnels, all whether or not connected to buildings, mines or
mining property;
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KTJ-CMB-7F43519-2-1712.
13.
14.
15.
MS C1 00 08 07
Any “Electronic Data Processing Data and Media” which is obsolete or unused by the Insured;
Property that is covered under another coverage form or endorsement of any other policy in which it is more
specifically described, except for the excess of the amount due (whether the Insured can collect on it or not)
from that other insurance;
Any of the specific types of Covered Property described in Sections B.1.a. through B.1.1. of this Coverage
Form for which a Limit of Insurance is not shown in the Supplemental Coverage Declarations; or
Any of the following Covered Costs and Expenses for which a Limit of Insurance is not shown in the
Supplemental Coverage Declarations:
a. Pollutant Clean Up and Removal, as described in Section B.2.b.;
b. Claim Data Expense, as described in Section B.2.c.; or
c. Ordinance or Law, as described in Section B.2.f.
D. EXCLUSIONS
1.
The Company will not pay for loss or damage caused directly or indirectly by any of the following. Such loss
or damage is excluded regardless of any other cause or event that contributes concurrently or in any
sequence to the loss.
a. EARTH MOVEMENT
(1) Any earth movement (other than “sinkhole collapse”) including earthquake, mine subsidence,
landslide, erosion, the expansion or contraction of soil due to the presence of moisture or water, or
the lack thereof, and any other earth sinking, rising, shifting or movement, all whether naturally
occurring or due to man made or other artificial causes.
But if earth movement results in fire or explosion, the Company will pay for the loss or damage
caused by that fire or explosion.
Volcanic eruption, explosion or effusion. But if volcanic eruption, explosion or effusion results in
“volcanic action” or fire, the Company will pay for the loss or damage caused by that “volcanic
action” or fire.
2
All “volcanic action” that results from all volcanic eruptions or explosions that occur within any 168
consecutive hours period will constitute a single occurrence.
b. FLOOD
Flood meaning:
(1) Flood, surface water, underground water, waves, tides, tidal waves, tsunamis, overflow of any body
of water, or their spray, all whether driven by wind or not;
(2) Mudslide or mudflow;
(3) Release of water impounded by a dam; and
(4) Water or sewage which backs up through sewers, drains or sumps;
all whether naturally occurring or due to man made or other artificial causes.
This exclusion will not apply to direct loss or damage from resulting fire, explosion or leakage from fire
protective equipment; however, the Company will be liable only for such resulting loss or damage.
c. GOVERNMENTAL ACTION
Seizure or destruction of property by order of governmental authority except as provided for under the
Covered Costs and Expenses, Section B.2.f. Ordinance or Law.
But the Company will pay for loss or damage caused by or resulting from acts of destruction ordered by
governmental authority and taken at the time of a fire to prevent its spread, if the fire would be covered
under this Coverage Form.
d. NUCLEAR HAZARD
Nuclear reaction or radiation, or radioactive contamination however caused.
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This exclusion will not apply to. direct loss or damage by:
‘ (1) Fire resulting from nuclear reaction or radiation, or radioactive contamination; or
(2) Sudden and accidental radioactive contamination, including resultant radiation damage to Covered
Property provided:
(a) Such radioactive contamination arises out of material at the Insured’s premises;
(b) Such radioactive material is kept at an Insured’s premises for the purpose of the Insured’s
operations; and
(c) At the time of such loss at the Insured’s premises there is neither a nuclear reactor capable of
sustaining nuclear fission in a self-supporting chain reaction, nor any new or used nuclear fuel
which is intended for or which has been used in a nuclear reaction.
But the most the Company will pay for Sudden and Accidental Radioactive Contamination as
provided in d. (2)(a), (b) and (c) above is the specified Limit of Insurance shown in the
Supplemental Coverage Declarations. This is not additional insurance.
e. WAR AND MILITARY ACTION
(1) Hostile or warlike action in time of peace or war, including action in hindering, combating or
defending against an actual, impending or expected attack:
(a) By any government or sovereign power (de jure or de facto), or by any authority maintaining or
using military, naval or air forces;
(b) By military, naval or air forces; or
(c) By an agent of any such government, power, authority or forces.
(2) Insurrection, rebellion, revolution, civil war, usurped power, or action taken by governmental
authority in hindering, combating or defending against such an occurrence.
(3) Any discharge, explosion or use of any weapon of war employing nuclear fission or fusion will be
conclusively presumed to be such a hostile or warlike action by such a government, power,
authority or forces.
f. COMPUTER VIRUS
Computer Virus means intrusive codes or programming that are entered into a computer system
causing direct physical loss or damage to, or destruction of, “Electronic Data Processing Equipment” or
“Electronic Data Processing Data and Media’.
This exclusion will not apply in the event the Computer Virus results in a “specified cause of loss”;
however, the Company will be liable only for such resulting loss or damage.
g. PROGRAMMING ERRORS OR OMISSIONS
Programming errors, omissions or incorrect instructions to a machine.
This exclusion will not apply in the event Programming errors, omissions or incorrect instructions to-a
machine results in a “specified cause of loss”, however, the Company will be liable only for such
resulting loss or damage.
h. ORDINANCE OR LAW
The enforcement of any ordinance or law:
(1) Regulating the construction, use or repair of any property; or
(2) Requiring the tearing'down of any property, including the cost of removing its debris;
except as provided in the Covered Costs and Expenses, item B.2.f. Ordinance or Law.
The Ordinance or Law exclusion applies whether the loss results from an ordinance or law that is
enforced even if the property has not been damaged; or from the increased costs incurred to comply
with an ordinance or law in the course of construction, remodeling or demolition of property, or removal
of its debris, following a physical loss to that property.
i. OFF PREMISES UTILITY SERVICES
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The interruption, failure or fluctuation of power or other utility service(s) provided to an insured premises
if the cause of the interruption, failure or fluctuation occurs off an insured premises.
This exclusion will not apply in the event the interruption, failure or fluctuation of power or other utility
service(s) results in a Covered Cause of Loss; however, the Company will be liable only for such
resulting loss or damage.
j- COLLAPSE OF BUILDINGS
Collapse of buildings meaning an abrupt falling down or caving in of a building or substantial portion of a
building with the result being that the building or substantial portion of a building cannot be occupied for
its intended purpose.
(1) This exclusion will not apply to collapse of buildings if the collapse is caused by one or more of the
following:
(a) A “specified cause of loss”;
(b) Decay or insect or vermin damage that is hidden from view, unless the presence of such decay
or insect or vermin damage is known to the Insured prior to collapse;
(c) Weight of people or personal property;
(d) Weight of rain that collects on a roof;
(e) Use of defective material or methods in construction, remodeling or renovation if the collapse
occurs during the course of the construction, remodeling or renovation. However, if the
collapse occurs after the construction, remodeling or renovation is complete and is caused in
part by a cause of loss listed in j.(1)(a) through (d) above, the Company will be liable for loss or
damage caused by the collapse even if use of defective material or methods in construction,
remodeling or renovation contributes to, the collapse.
In the event collapse results in a Covered Cause of Loss, the Company will be liable only for such
resulting loss or damage by that Covered Cause of Loss.
(2)
A building or portion of a building that:
(a) Is in imminent danger of abruptly falling down or caving in; or
(b) Suffers a substantial impairment of structural integrity;
is not considered a collapse but is considered to be in a state of imminent collapse.
3
As respects buildings in a state of imminent collapse, the Company will not pay for loss or damage
unless the state of imminent collapse first manifests itself during the policy period and is caused
only by one or more of the following which occurs during the policy period:
(a) Fire; lightning; explosion; windstorm or hail; aircraft or vehicles; riot or civil commotion;
“sinkhole collapse"; weight of snow, ice or sleet;
(b) Weight of people or personal property;
(c) Weight of rain that collects on a roof; or
(d) Use of defective material or methods in construction, remodeling or renovation if the state of
imminent collapse occurs during the course of construction, remodeling or renovation.
As respects “Electronic Data Processing Equipment” and “Electronic Data Processing Data and Media”,
only exclusions D.1.a. through g. and D.1.i. apply. As respects Accounts Receivable, and Valuable Papers
and Records, only exclusions D.1.a. through g. apply. As respects Property in the due course of transit,
Exclusions D.1.a. and D.1.b. do not apply.
2. The Company will not pay for loss or damage caused by or resulting from any of the following:
a. Artificially generated electric current, including electric arcing, that disturbs electrical devices,
equipment, appliances or wires.
But in the event artificially generated electric current results in fire or explosion, the Company will be
liable only for such resulting loss or damage.
b. Indirect or remote loss or damage; delay, loss of use or loss of market; or interruption of business;
c. (1) Wear and tear or depletion;
(2) Rust, corrosion, erosion, fungus, decay, deterioration, wet or dry rot, mold, hidden or latent defect
or any quality in the property that Causes it to damage or destroy itself;
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(8) Settling, cracking, shrinking, bulging or expansion;
(4) Nesting or infestation or discharge or release of waste products or secretions, by insects, birds,
+ rodents or other animals;
(5) Mechanical or machinery breakdown, including rupture or bursting caused by centrifugal force; and
(6) The following causes of loss to personal property:
(a) Dampnes