2019/20 Property Program - Memorandum of CoverageC A L I F 0 R N I A
Providing innovative risk management solutions
for our public agency partners
Issued to the City of La Quinta
INTEGRITY
EXCELLENCE
INNOVATION
TEAMWORK
TABLE OF CONTENTS
DECLARATIONS..................................................................................................................... I
A.
COVERED MEMBERS: .................................................................................................I
B.
PERIOD OF COVERAGE: .................................... ............................................................
I
C.
COVERED LOCATIONS: ...............................................................................................
- I
D.
NOTIFICATION OF LOSSES: ...........................................................................................
I
E.
COVERAGE PART A - "ALL RISK", EARTHQUAKE, AND FLOOD PERILS ...........I
1. LIMITS OF LIABILITY........................................................................................................
1
2. SUBLIMITS OF LIABILITY................................................................................................
2
F.
COVERAGE PART B - TERRORISM..............................................................................3
1. LIMITS OF LIABILITY........................................................................................................3
2. SUBLIMITS OF LIABILITY................................................................................................
3
COVERAGEPART A...............................................................................................................4
SECTION
I - COVERAGE AGREEMENT.............................................................................4
A.
NAME OF COVERED PARTIES.......................................................................................4
B.
OPTIONAL COVERAGE PARTICIPATION....................................................................4
C.
DEDUCTIBLES..................................................................................................................4
1. "ALL RISK"...........................................................................................................................4
2. FLOOD: ............................................................. - ..................................................................
5
3. FLOOD IN RESPECT OF PIERS: .........................................................................................
5
4. EARTHQUAKE SHOCK: ............................. . ........................................................ .............
5
5. DEDUCTIBLE PROVISIONS ........................................ ..:....................................................
5
D.
UNIT OF COVERAGE DEFINED.....................................................................................5
SECTION II - PHYSICAL DAMAGE TO PROPERTY.........................................................7
A.
COVERAGE........................................................................................................................7
B.
EXTENSIONS OF COVERAGE........................................................................................7
1. PROPERTY IN COURSE OF CONSTRUCTION................................................................7
2. FIRE FIGHTING EXPENSES............................................................................. ....
..............
8
3. OFF PREMISES SERVICES CLAUSE.................................................................................
8
4. ARCHITECTS AND ENGINEERS FEES AND LOSS ADJUSTMENT EXPENSES ........
9
5. EXPEDITING EXPENSES....................................................................................................9
6. DEBRIS REMOVAL.............................................................................................................
9
7. BUILDING LAWS.................................................................................................................
9
8. DEMOLITION COST..........................................................................................................
10
9. INCREASED COST OF CONSTRUCTION.......................................................................
10
10. ERRORS AND OMISSIONS...............................................................................................
10
SECTION IV - GENERAL CONDITIONS............................................................................30
A.
PERILS COVERED..........................................................................................................30
B.
PERILS EXCLUDED...............................................................................6........................30
C.
TERRITORIAL LIMITS...................................................................................................33
D.
REINSTATEMENT...........................................................................................................33
E.
FREE ON BOARD (F.O.B.) SHIPMENTS......................................................................33
F.
PROTECTION AND PRESERVATION OF PROPERTY...............................................33
G.
BREACH OF CONDITIONS............................................................................................34
H.
PERMITS AND PRIVILEGES.........................................................................................34
I.
PROTECTIVE SAFEGUARDS........................................................................................35
J.
NOTICE OF LOSS........................................................................................................35
K.
ARBITRATION OF VALUE............................................................................................35
L.
PROOF OF LOSS..............................................................................................................36
M.
SUBROGATION...............................................................................................................36
N.
CANCELLATION.............................................................................................................37
0.
ABANDONMENT............................................................................................................37
P.
ASSIGNMENT..................................................................................................................37
Q.
SALVAGE.........................................................................................................................37
R.
OTHER INSURANCE / COVERAGE..............................................................................38
S.
EXCESS INSURANCE / COVERAGE............................................................................38
T.
RIGHT TO REVIEW RECORDS FOLLOWING A COVERED LOSS ..........................38
U.
CONCEALMENT AND FRAUD.....................................................................................38
V.
LIBERALIZATION...........................................................................................................39
W.
LOSS PAYABLE CLAUSE..............................................................................................39
X.
JOINT LOSS ADJUSTMENT - MECHANICAL BREAKDOWN.. .............................
-39,
Y.
LENDER'S LOSS PAYABLE..........................................................................................40
SECTION
V - FINE ARTS FLOATER..................................................................................42
A.
COVERAGE......................................................................................................................42
B.
PROPERTY COVERED...................................................................................................42
C.
"WALL TO WALL" ("NAIL TO NAIL") COVERAGE..................................................42
D.
EXCLUSIONS...................................................................................................................43
E.
LOSS PAYMENT BASIS/VALUATION.........................................................................43
F.
SPECIAL CONDITIONS..................................................................................................44
SECTION VI - MOBILE / CONTRACTORS EQUIPMENT................................................47
A.
COVERAGE......................................................................................................................47
B.
EXCLUSIONS...................................................................................................................48
DECLARATIONS
A. COVERED MEMBERS:
California Joint Powers Insurance Authority (the Authority) and its member agencies that
participate in its Property Program (a "Covered Member").
B. PERIOD OF COVERAGE:
July 1, 2019 at 12:01 am Pacific Time to July 1, 2020 at 12:01 am Pacific Time.
C. COVERED LOCATIONS:
As held on file with the Authority or insurance broker.
D. NOTIFICATION OF LOSSES:
To the California Joint Powers Insurance Authority via its website claim reporting system.
E. COVERAGE PART A - "ALL RISK", EARTHQUAKE, AND FLOOD PERILS
This is a shared limit program. The limits purchased are on a per occurrence basis (unless
specifically stated as aggregated). In the event of an occurrence exhausting the limit provided
by the Authority to Covered Members, payment to all Covered Members affected by the
occurrence will be made on a proportional basis as outlined by the Authority's policy. Where
coverages are aggregated these limits are for all Covered Members for the Period of Coverage.
They are not a per Covered Member maximum.
In the event of loss or damage covered by this MOC - P and subject to specific exclusions,
modifications conditions and the program limits of liability contained within this MOC - P, the
Authority shall not be liable for more than the amounts shown under each Coverage Part.
LIMITS OF LIABILITY
$25,000,000 per occurrence and in the annual aggregate except as follows:
$25,000,000 per occurrence and in the annual aggregate as respects Earthquake Shock for
those locations that Covered Members specifically purchase Earthquake Shock coverage.
$25,000,000 per occurrence and in the annual aggregate as respects Flood for those
locations that Covered Members specifically purchase Earthquake Shock coverage.
a $25,000 / 48-inch box maximum per item for trees and shrubs.
This coverage is excess to any amount recoverable from Federal
Emergency Management Agency (F.E.M.A.) and/or any State
Office of Emergency Services (O.E.S.) declared disasters,
providing said declaration provides funding for repairs.
$500,000 Per occurrence and $1,000,000 in the annual aggregate as
respects unscheduled landscaping, tees, sand traps, greens and
natural athletic fields and subject to a $25,000 / 48-inch box
maximum per item for trees and shrubs. This coverage is excess
to any amount recoverable from Federal Emergency
Management Agency (FEMA) and/or any State Office of
Emergency Services (O.E.S.) declared disasters, providing said
declaration provides funding for repairs.
$1,000,000 Per occurrence as respects unscheduled tunnels, bridges, dams,
catwalks (except those not for public use), roadways, highways,
streets, sidewalks, (and related appurtenances to these) culverts,
street lights and traffic signals.
$25,000,000 Tax Revenue Interruption Protection per occurrence for
scheduled property.
$500,000 Animals.
$250,000 Per occurrence and in the annual aggregate as respects Rewards.
$250,000 Newly Acquired Fine Arts per Covered Member.
F. COVERAGE PART B — TERRORISM
1. LIMITS OF LIABILITY
$100,000,000 Per occurrence and in the annual aggregate as respects Acts of
Terrorism and Sabotage.
2. SUBLIMITS OF LIABILITY
$25,000,000 Off -Premises Services Business Interruption.
$25,000,000 Contingent Time Element and coverage in respect of Direct
Customers and Suppliers only.
$10,000,000 Worldwide Transit.
3
a. $2,500 per occurrence, radio and telephone equipment in vehicles
b. $2,500 per occurrence, auto physical damage — comprehensive
c. $2,500 per occurrence, auto physical damage — collision
d. $2,500 per occurrence, sea doos.
e. $250,000 per occurrence, unscheduled tunnels, bridges, dams, catwalks (except those
not for public use), roadways, highways, streets, sidewalks, culverts, street lights and
traffic signals
f. $100,000 per occurrence, unscheduled property, unless vacant in which case there is
no coverage
g. $500,000 per occurrence for vacant scheduled buildings
2. FLOOD:
$ 100,000 per occurrence except $ 250,000 per occurrence, per Covered Member in respect
of locations situated wholly or partially within a Special Flood Hazard Area (SFHA), areas
as defined by the Federal Emergency Management Agency (FEMA). SFHA is defined as
the area that will be inundated by the flood event having a 1 percent chance of being equaled
or exceed in any given year. For unscheduled property, whether vacant or not, the Flood
deductible shall be the greater of the Flood deductible as stated in this paragraph, or the
applicable "All Risk" deductible from item C. i of this Section.
3. FLOOD IN RESPECT OF PIERS:
$ 500,000 per occurrence, per pier.
4. EARTHQUAKE SHOCK.
This coverage will not pay for loss or damage caused by "earthquake shock" until the amount
of loss or damage exceeds 5% per unit of coverage subject to a minimum deductible of $
100,000 per occurrence. The deductible applies separately to each Covered Member and to
each "earthquake shock" occurrence. This coverage will then pay the amount of loss or
damage in excess of the deductible, up to the applicable limits of coverage for "earthquake
shock" at each premises. "Total values" mean the 100% value of buildings, personal property
and Time Element coverage provided (using the applicable MOC - P valuation clause),
without regard to the limit of coverage.
S. DEDUCTIBLE PROVISIONS
A) If two or more deductible amounts provided above apply for a single 'occurrence', the
total to be deducted shall not exceed the largest per 'occurrence' deductible amount
applicable.
B) When two deductibles are involved, the amount of loss in excess of the higher deductible
will be considered as the common loss.
D. UNIT OF COVERAGE DEFINED
SECTION II — PHYSICAL DAMAGE TO PROPERTY
A. COVERAGE
Subject to the terms, conditions and exclusions hereinafter contained, this MOC - P covers
all property of every description of an coverable nature (as defined by the MOC- P), both
real (including vehicles) and personal (including improvements and betterments), of the
Covered Member or property of others in the care, custody or control of the Covered
Member, for which the Covered Member is liable or under obligation to keep covered,
located at an Covered Location or within 1,000 feet thereof, to the extent of the interest of
the Covered Member in such property.
B. EXTENSIONS OF COVERAGE
The following Extensions of Coverage do not act to increase the liability of the Authority
for any amount greater than stated in the Program Limits of Liability shown in the
Declarations attached to this MOC - P.
1. PROPERTY IN COURSE OF CONSTRUCTION
It is understood and agreed that as respects course of construction and remodeling
projects, this MOC - P will provide automatic coverage subject to the following
conditions:
(1) Project involves only real property additions or modifications to Covered
Member locations (excluding roads, bridges, dams and levees unless
specifically declared and on file with the Authority), foundations and building
materials including new locations.
(2) Values of the project are reported to the Authority in accordance with the
provisions of this MOC - P regarding changes, additions or deletions.
(3) The peril of Earthquake Shock is excluded as respects property newly
constructed, erected or assembled unless specifically declared and on file with
the Authority.
(4) Additional Expense Soft Cost: This coverage applies to new buildings or
structures in the course of construction up to the time that the new building (s)
or structure (s) is initially occupied or put to its intended use whichever occurs
first.
The Authority will provide coverage for a Covered Member's additional
expenses as defined below for up to 25% of the estimated completed value of
the project, not to exceed the MOC - P limit, which results from a delay in the
completion of the project beyond the date it would have been completed had no
loss or damage occurred. The delay must be due to direct physical loss or
damage to covered property and be caused by or result from a Covered Cause
of Loss. The Authority will pay covered expenses when they are incurred.
7
suppliers furnishing heat, light, power, gas, water, telephone, steam or similar services
to the Covered Member's premises.
4. ARCHITECTS AND ENGINEERS FEES AND LOSS ADJUSTMENT EXPENSES
This MOC - P also covers any of the following:
(1) Architects' and engineers' fees.
(2) Loss adjustment expenses including, but not limited to, auditors, consultants and
accountants and excluding Public Adjusters.
S. EXPEDITING EXPENSES
It is understood and agreed that coverage under this MOC - P includes the reasonable
extra cost of temporary repair and of expediting the repair of such damaged property of
the Covered Member, including overtime and the extra costs of express or other rapid
means of transportation.
6. DEBRIS REMOVAL
This MOC - P also covers expenses incurred in the removal of debris of the property
covered hereunder that may be destroyed or damaged by a covered peril(s). This debris
removal coverage does not apply to the cost to extract pollutants from land or water, or
to remove, restore or replace polluted land, water or groundwater.
This agreement also covers:
The expense incurred in the removal of debris of property covered hereunder, within
one thousand (1,000) feet of the Covered Member's premises, which may be
occasioned by loss caused by any of the perils covered by this MOC - P. However,
coverage for expense of removal of debris of property covered shall not apply to:
(a) any discharge, release or escape of any pollutant or contamination into, under
or upon the land, the atmosphere or any watercourse or body of water; or
(b) any fines or penalties incurred or sustained by or imposed on the Covered
Member at the order of any government agency, court or other governmental
authority arising from any cause whatsoever in excess of $15,000 annually
aggregated as respects all covered locations.
It is a condition precedent to recovery under this extension that the Authority shall have
paid or agreed to pay for direct physical loss or damage to property covered hereunder
and that the Covered Member shall give written notice of intent to claim for cost of
removal of debris.
7. BUILDING LAWS
M
13. TRANSIT
Personal property of the Covered Member or property held by the Covered Member in
trust or on commission or on consignment for which the Covered Member may be held
legally liable while in due course of transit, worldwide, against "All Risks" of Direct
Physical Loss or Damage to the property covered occurring during the period of
coverage of this MOC - P except as otherwise excluded.
14. ACCIDENTAL CONTAMINATION EXTENSION
This MOC - P is hereby extended to cover Business Interruption and Property Damage
loss from accidental contaminatiop to covered Property, as covered by this MOC - P,
including expenses necessarily incurred to clean up, remove and dispose of
contaminated substances so as to restore the covered property as covered by this MOC
- P to the same condition as existed prior to loss, all as a result of accidental
contamination, discharge or dispersal is itself caused physical damage to covered
property by fire, lightning, flood, earth movement, impact from aircraft, explosion, riot,
civil commotion, smoke, collapse, vehicles, windstorm, hail, vandalism, malicious
mischief or leakage and accidental discharge from automatic fire protective systems
whereupon this extension shall provide coverage up to $ 1,000,000 annual aggregate
for all properties combined, of liability provided by this MOC - P.
For the purposes of this extension the term "covered property" as covered by this MOC
- P, is held to include land on the premises of the Covered Member, (including Land on
which covered property is located), and Land Values, as part of the above stated
sublimit, whether or not the same are excluded by this MOC - P. It being specifically
understood and agreed that this extension shall not afford coverage to land, (including
land on which covered property is located), and land Values for loss in excess of the $
1,000,000 annual aggregate sublimit liability stated above and shall be subject to a 180
day reporting period.
It is further understood and agreed that this extension shall not override anything
contained in Asbestos Clean Up and Removal in this MOC - P.
The sublimit of liability stated above forms part of the limit(s) of liability provided by
this MOC - P and does not increase it (them).
This coverage extension is specifically excess of any other valid and collectible
insurance or coverage available to a Covered Member or a Covered Party.
15. LEASEHOLD INTEREST
In the event of physical loss or damage of the type covered by this MOC - P to real
property of the type covered by this MOC - P. which is leased by the Covered Member,
this MOC - P is extended to cover:
(1) If as a result of such loss or damage the property becomes wholly untenantable or
unusable and the lease agreement requires continuation of the rent, the Authority
18. CONSEQUENTIAL RED UCTIONIN TEAL UE
The Authority will pay for the reduction in value of covered components or parts of
products due to damage by covered causes of loss to other components or parts of such
products.
19. EXHIBITION, EXPOSITION, FAIR OR TRADE SHOW
The Authority will pay for damage by covered causes of loss to a Covered Member's
Personal Property situated on the premises of any exhibition, exposition, fair or trade
show.
20. IMPOUNDED WATER
The Authority will pay for covered causes of loss to covered property and Business
Interruption resulting from the lack of adequate water supply stored behind dams or in
reservoirs on the covered property; only if the water is used as a raw material, for power
or for other manufacturing purposes and the water is released from storage as a result
of damage to, or destruction of the dam, reservoir, or control equipment due to covered
causes of loss.
Coverage is limited to thirty (30) consecutive days after the length of time required,
with the exercise of due diligence and dispatch to repair or replace the damaged or
destroyed dam, reservoir or control equipment.
21. REWARD
The Authority will pay a reward to any individual or group (except the Covered
Member and its elected officials), for the capture of, or for information which results in
the arrest and conviction, of any person(s) related to covered loss or damage to
Buildings and Personal Property.
22. WATER BACKUP FROM SEWER OR DRAIN
The Authority will pay for covered causes of loss to covered property from water that
backs up from a sewer or drain.
23. REAL PROPERTY
Definition of Real Property is extended to include paths, walks, walkways, fences,
driveways, awnings, signs, canopies, and artificial athletic fields, where values are
included in the Real Property values reported and on file with the Authority.
24. LANDSCAPING
13
(10) Power transmission, feeder lines, and underground pipes more than 1,000 feet from
a covered location (not including the line or pipe itself) the Covered Member.
(11) As respects course of construction the following exclusions shall apply:
(a) The cost of making good, faulty or defective workmanship, material,
construction or design, but this exclusion shall not apply to damage not
otherwise excluded resulting from such faulty or defective workmanship,
material, construction or design;
(b) The cost of non-compliance of or delay in completion of contract;
(c) The cost of non-compliance with contract conditions;
(d) Contractors' equipment or tools not a part of or destined to become a part of the
installation.
12. The following additional exclusions apply to loss or damage to animals covered
under this MOC - P:
(a). Death of any animal(s) from natural causes.
(b.) Death of any animal(s) that dies from an unknown cause unless:
upon the death of such animal a post-mortem examination made of such
animal by a licensed veterinarian, and ifthe veterinarian's post-mortem report
shows the cause of death to clearly fall within the coverages of this MOC -
P.
(c.) Death of any animal(s) as a result of surgical operation, including inoculation,
unless the necessity for same arises from an event covered by this MOC - P.
(d.) The death or destruction of any animal(s) caused by, resulting from or made
necessary by physical injury caused by or resulting from the activities of the
injured animal or other animals unless such death or destruction is the result
of any event otherwise covered by the MOC - P. This exclusion does not
apply to the Death, destruction or injury of any covered animal while acting
in the line of duty.
(e.) The death of any animal(s) caused directly or indirectly by the neglect or abuse
of the Covered Member, his agent, employees or bailees (carriers for hire
excepted) unless such loss is a result of an event otherwise covered by this MOC
- P.
(f.) The loss by death of any animal(s) as a result of parturition or abortion.
(g.) Loss resulting from depreciation in value caused by any animal(s) covered -
hereunder becoming unfit for or incapable of filling the function or duties for
which it is kept, employed or intended unless such loss is the result of an event
otherwise covered by this MOC - P.
15
(b) Asbestos not physically damaged by the Listed Peril including any
governmental or regulatory authority direction or request of whatsoever
nature relating to undamaged asbestos.
(2) Except as set forth in the foregoing Section 1, this MOC - P does not provide
coverage for asbestos or any sum relating thereto.
E. LOSS PAYMENT BASISNALUATION
In case of loss to property of a Covered Member covered hereunder, the basis of adjustment
shall be as of the time and place of loss as follows:
(A) On all real and personal property, including property of others at the replacement value,
that is replacement with materials of like kind and quality, at the time of the loss without
deduction for depreciation. If property is not replaced within a reasonable period of
time but no longer than 5 years from the date final payment is received by the member,
then the actual cash value shall apply. However, on vacant property, the following
valuation provisions shall apply:
1. On premises defined as vacant herein for a period in excess of 60 days and reported to the
Authority, then actual cash value shall apply.
2. On premises defined as vacant herein for a period in excess of 60 days and not reported to
the Authority, the maximum the Authority will pay will be the actual cash value less a
further 25% of actual cash value
(B) On improvements and betterments at the replacement value at time of loss without
deduction for depreciation. If property is not repaired or replaced within a reasonable
period of time, then the actual cash value shall apply. If replaced or repaired by others
for the use of the Covered Member, there shall be no liability hereunder. The Authority
agrees to accept and consider the Covered Member as sole and unconditional owner of
all improvements and betterments, any contract or lease the Covered Member may have
made to the contrary notwithstanding.
(C) On manuscripts, mechanical drawings, patterns, electronic data processing media,
books of accounting and other valuable papers, the full replacement cost of the property
at the time of loss (including expenses incurred to recreate the information lost,
damaged or destroyed) or what it would then cost to repair, replace or reconstruct the
property with other of like kind and quality. If not repaired, replaced or reconstructed
within a reasonable period of time, then not to exceed the cost of blank or unexposed
material.
(D) On antique, restored or historical buildings, the cost of acquisition, relocation to the site
and renovation, restoration, reproduction or reconstruction. In the event of a partial loss,
replacement cost for antique, restored or historical buildings shall mean the cost of
repairing, replacing, constructing or reconstructing (whichever is less) the property on
the same site using materials of like kind and quality necessary to preserve or maintain
a buildings' historical significance without deduction for depreciation.
17
(i) Until the property is actually repaired, replaced or reconstructed, the maximum amount
recoverable shall be the actual cash value of the lost or damaged property;
(ii) Replacement shall be effective by the Covered Member with due diligence and
dispatch;
(iii)Replacement need not be on same site, or of same or similar construction or occupancy
provided that the Authority shall not be liable for any additional costs that are directly
attributable to the inclusion of this provision.
(iv)For historical buildings as more specifically defined in this Section.
(v) In no event shall the Authority's liability exceed the amount actually and necessarily
expended in repairing or replacing (whichever is less) covered property or any part
thereof.
It is understood and agreed that as respects replacement cost, the Covered Member shall
have the option of replacement with electrical and mechanical equipment having
technological advantages and/or representing an improvement in function and/or forming
part of a program of system enhancement provided that such replacement can be
accomplished without increasing the Authority's liability. The Authority shall be allowed
to dispose of, as salvage, any non-proprietary property deemed unusable by the Covered
Member.
F. AUTOMATIC COVERAGE/REPORTING CONDITIONS
It is understood and agreed that:
(1) The Authority may add/delete named Covered Members to coverage herein provided.
(2) Covered Members at the inception of the Period of Coverage
As respects Covered Members covered at the inception of the Period of Coverage, this
MOC - P is automatically extended to cover all additional property as described in this
MOC - P and associated Business Interruption / Extra Expense which may be
purchased, leased, acquired or otherwise become at the risk of existing Covered
Members during the term of this MOC - P; subject to the sublimit covered in Program
Limits of Liability shown in the Declarations attached to this MOC - P.
Earthquake Shock is excluded from this provision
(3) New Covered Members added after the inception of the Period of Coverage
As respects new Covered Members added after the inception of the Period of Coverage,
this MOC - P is automatically extended to cover all additional property as described in
this MOC - P and associated Business Interruption / Extra Expense which may be
purchased, leased, acquired or otherwise become at the risk of new Covered Members
during the term of this MOC - P; subject to such increase in values being reported to
this carrier within sixty (60) days of acquisition, and subject to the sublimit in Program
Limits of Liability shown in the Declarations attached to this MOC - P.
for its proportion of the excess of loss, if any, over and above the amount due from such
other coverage, whether valid or invalid or by solvent or insolvent insurers.
(8) Any additional or return premium declared under this clause shall be computed as
follows:
All additions or deletions to schedules will be done at anniversary date, on an ensuing
year basis. No additional or return premium will be required for additions or deletions
during the period of coverage except:
(a) New Covered Members/Covered Members Deletions:
The reporting of new/deleted named Covered Members to the Authority and the
applicable additional or return premium will be provided to/from the Authority
based on the date of addition/or deletion of the Covered Member.
(b) Earthquake Shock:
There is no automatic coverage for Earthquake Shock except as provided in
Paragraph 5 and 6 above. In the event of any increase of the total insured values as
respects Earthquake Shock, as agreed by the Authority, the premium shall be
charged from the date of change at rates to be agreed. In the event of any decrease
of the total insured values as respects Earthquake Shock, premium will be returned
from the date of change at the applicable rate.
G. DEFINITIONS
1) OCCURRENCE
The term occurrence shall mean any one loss, disaster, casualty or series of losses, disasters
or casualties, arising out of one event. When the term applies to occurrence(s) from
windstorm, flood, and/or earthquake shock, the following provisions shall apply:
(A) WINDSTORM
Each loss by windstorm shall constitute a single claim hereunder; provided, if more
than one windstorm shall occur within any period of one hundred and sixty-eight (168)
hours during the term of this MOC - P, such windstorm shall be deemed to be a single
windstorm within the meaning thereof. The Covered Member may elect the moment
from which each of the aforesaid periods of one hundred and sixty-eight (168) hours
shall be deemed to have commenced but no two such one hundred and sixty-eight (168)
hour periods shall overlap. The Authority shall not be liable for any loss occurring
before the effective date and time of the MOC - P. The Authority will be liable for any
losses occurring for a period of up to one hundred and sixty-eight (168) hours after the
expiration of this MOC - P provided that the first windstorm loss or damage within that
one hundred and sixty-eight (168) hours occurs prior to the date and time of expiration
of this MOC - P.
In the event of there being a difference of opinion between the Covered Member and
the Authority as to whether or not all windstorm losses sustained by the Covered
21
The Authority shall not be liable for any loss caused by an earthquake shock occurring
before the effective date and time of this MOC - P. The Authority will be liable for any
losses occurring for a period of up to one hundred sixty eight (168) hours after the
expiration of this MOC - P provided that the first earthquake shock loss or damage
within that one hundred sixty eight (168) hours occurs prior to the date and time of the
expiration of this MOC - P.
In the event of there being a difference of opinion between the Covered Member and
the Authority as to whether or not all earthquake shock losses sustained by the Covered
Member during an elected period of one hundred sixty eight (168) hours arose out of,
or were caused by a single earthquake shock, the stated opinion of the National
Earthquake Shock Information Service of the United States Department of the Interior
or comparable Authority in any other country or locality shall govern as to whether or
not a single earthquake shock continued throughout the period at the locations involved.
The term earthquake shock is defined as: earth movement, landslide, subsidence, earth
sinking, rising or shifting, including collapse, cracking, or shifting of buildings,
structures or their parts, caused by a shaking or trembling of the earth that is tectonic in
origin. The definition of earthquake shock does not include ensuing loss CAUSED BY
FIRE, EXPLOSION SPRINKLER LEAKAGE or FLOOD. Further Earthquake
Sprinkler Leakage is covered outside of the- "Earthquake Shock" definition and subject
to the basic peril deductible.
2) PERSONAL PROPERTY OF OTHERS
Means any property (other than real property) belonging to others who are not employees,
volunteers or elected or appointed officials for which a Covered Member has assumed
liability in a written agreement. This includes but is not limited to:
— Articles of Clothing
— Jewelry
— Sound Equipment
— Fine Arts (up to the sub -limit of unscheduled fine arts)
— EDP Media and Hardware
— Valuable Papers
— Portable Electronic Equipment
3) IMPROVEMENTS AND BETTERMENTS
Means additions or changes made by a Covered Member/lessee at their own expense to a
building they are occupying that enhance the building's value.
4) SCHEDULED VALUES
As used in the MOC — P, Scheduled Values, shall mean specifically declared values for
such items/assets have been reported as part of the Covered Member'.s schedule of values
held on file with the Authority or insurance broker.
23
2. INTERRUPTIONBY CIVIL AUTHORITY
This MOC - P is extended to include the actual loss sustained by the Covered Member,
as covered hereunder, during the length of time not exceeding sixty (60) consecutive
days when, as a direct result of damage to or destruction of property of the type covered
hereunder by the covered peril(s), occurring within ten (10) statute miles of a covered
location, access to such described premises is specifically prohibited by order of any
civil authority.
Coverage under this extension is subject to a 24-hour waiting period.
3. DEMOLITIONAND INCREASED TIME TO REBUILD
The Authority shall, in the case of loss covered under this MOC - P, be liable also for
loss to the interest covered by the MOC - P, occasioned by the enforcement of any local
or state ordinance or law regulating the construction, repair or demolition of
buildings or structures and in force at the time such loss occurs or which becomes in
force within 30 days of the loss, which necessitates the demolition of any portion of
the described building(s) not damaged by the covered peril(s). The Authority shall
also be liable for loss due to the additional period of time required for repair or
reconstruction in conformity with the minimum standards of such ordinance or law
of the building(s) described in this MOC - P damaged by a covered peril.
THE AUTHORITY SHALL NOT BE LIABLE UNDER THIS CLAUSE FOR:
A) More than the limit(s) of liability as shown elsewhere in this MOC - P_
B) Any greater proportion of any loss to the interest covered by this MOC - P than the
amount covered under this MOC - P on said interest bears to the total
insurance and coverage on said interest, whether all such insurance contains this
clause or not.
4. NON -PRODUCTIVE PROPERTY
If. the Real and/or Personal Property sustaining loss or damage does not produce an
income the actual loss sustained shall be the continuing fixed charges and expenses
directly attributable to such non -productive property. .
S. CONTINGENT BUSINESS INTERR UPTIONAND/OR EXTRA EXPENSE
AND/OR RENTAL VALUE
Business interruption, extra expense, rental value coverage provided by this MOC -
P is extended to cover loss directly resulting from physical damage covered under
this MOC - P to property of the type not otherwise excluded by this MOC - P at direct
supplier or direct customer locations (whether such location is owned by a
Covered Member or not) that prevents a supplier of goods and/or services to the
Covered Member from supplying such goods and/or services, or that prevents a
25
coverage for the additional length of time required to restore the business of the
Covered Member to the condition that would have existed had no loss occurred
commencing on either
(1) the date on which the' Authority's liability would otherwise terminate or
(2) the date on which rebuilding, repairing or replacement of such property as has been
lost, damaged or destroyed is actually completed, whichever is later.
The Authority's liability under this extension shall terminate no later than twelve (12)
months from the commencement date set forth above.
C. EXCLUSION
The Authority shall not be liable for any increase of loss which may be occasioned by the
suspension, lapse, or cancellation of any lease or license, contract or order, unless such
suspension, lapse, or cancellation results directly from the interruption of business and, then
the Authority shall only be liable for such loss as affects the Covered Member's earnings
during and limited to, the period of indemnity covered under this MOC - P.
D. LOSS PAYMENT VALUATION EXPENSES TO REDUCE LOSS
This MOC - P also covers such expenses as are necessarily incurred for the purpose of
reducing loss under this section (except incurred to extinguish a fire); but in no event to
exceed the amount by which loss is thereby reduced.
E. SPECIAL CONDITION APPLICABLE
If the Covered Member could reduce the loss resulting from the interruption of business:
(1) by complete or partial resumption of operation of the property whether or not such
property be lost or damaged, or
(2) by making use of merchandise or other property at a Covered Member's location or
elsewhere
Such reduction shall be taken into account in arriving at the amount of the loss hereunder.
F. DEFINITIONS
1. GROSS EARNINGS
"Gross Earnings" is defined as the sum of:
(1) total net sales and
(2) other earnings derived from the operation of the business
27
G. PERIOD OF RESTORATION
The period during which business interruption and /or rental interruption and/or extra
expense applies will begin on the date direct physical loss occurs and interrupts
normal business operations and ends on the date that the level of income prior to the loss
is restored (normal operations) with due diligence and dispatch.
29
H) Loss or shortage disclosed upon taking inventory or mysterious disappearance of
property (except property in the custody of carriers or bailees for hire).
I) Loss caused directly or indirectly by:
(1) War, 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; or
(b) by military, naval or air forces; or
(c) by an agent of any such government, power, authority or forces
(2) any weapon of war employing atomic fission or radioactive force whether in time
of peace or war
(3) insurrection, rebellion, revolution, civil war, usurped power, or action taken by
governmental authority or hindering, combating or defending against such an
occurrence, seizure or destruction under quarantine or customs regulations,
confiscation by order of any government or public authority, or risks of contraband
or illegal transportation or trade.
J) Loss by nuclear reaction or nuclear radiation or radioactive contamination, all whether
controlled or uncontrolled, and whether such loss be direct or indirect, proximate or
remote, or be in whole or in part caused by, contributed to, or aggravated by the covered
peril(s) in this MOC - P; however, subject to the foregoing and all provisions of this
MOC - P, direct loss by fire resulting from nuclear reaction or nuclear radiation or
radioactive contamination is covered by this MOC - P.
K) This MOC - P does not provide coverage for the following, but, if physical damage not
excluded by this MOC - P results, then only that resulting damage is covered:
(1) Defective workmanship, material, construction or design from any cause
(2) Loss or damage to the interior portion of buildings under construction from rain,
sleet or snow, whether or not driven by wind, when the installation of the roof, walls
and windows of such buildings has not been completed. But damage by surface
water is covered.
L) Loss, damage, cost or expense of whatsoever nature directly or indirectly caused by,
resulting from or in connection with the actual or threatened malicious use of
pathogenic or poisonous biological or chemical materials regardless of any other cause
or event contributing concurrently or in any other sequence thereto.
M) This MOC - P only covers physical loss or damage to covered property by mold,
mildew or fungus when directly caused by a peril covered by this MOC - P occurring
during the period of coverage.
31
This MOC - P also excludes loss, damage, cost or expense of whatsoever nature
directly or indirectly caused by, resulting from or in connection with any action taken
in controlling, preventing, suppressing or in any way relating to any act of terrorism.
If the Authority alleges that by reason of this exclusion, any loss, damage, cost or
expense'is not covered by this MOC - P the burden of proving the contrary shall be upon
the Covered Member.
In the event any portion of this exclusion is found to be invalid or unenforceable, the
remainder shall remain in full force and effect.
P) Loss, damage, to an unmanned aerial vehicle (aka: drone) while in operation.
C. TERRITORIAL LIMITS
This MOC - P insures property within the United States of America, its territories and .
possessions. Personal property while in transit therein is extended to worldwide coverage.
D. REINSTATEMENT
Any reduction in the amount covered hereunder due to payment of any loss or losses shall
be automatically reinstated for the balance of the term of this MOC - P except as respects
to those perils that are subject to annual aggregate limitation.
E. FREE ON BOARD (F.O.B.) SHIPMENTS
The Authority shall be liable for the interest of the Covered Member at sole option of the
Covered Member, the interest of the consignee in merchandise which has been sold by the
Covered Member under terms of F.O.B. point of origin or other terms usually regarded as
terminating shippers' responsibility short of point of delivery.
F. PROTECTION AND PRESERVATION OF PROPERTY
This MOC - P covers:
A) Reasonable and necessary costs incurred for actions to protect or preserve covered
property; provided such actions are necessary due to actual, or to prevent immediately
impending, covered physical loss or damage to such covered property.
B) Reasonable and necessary:
(1) Fire department fire fighting charges imposed as a result of responding to a fire in,
on or exposing the covered property;
(2) Costs incurred of restoring and recharging fire protection systems following an
covered loss;
(3) Costs incurred for the water used for fighting a fire in, on or exposing the covered
33
not pay for any loss or damage caused by any of the following even if they
are perils covered:
(i) Vandalism;
(ii) Sprinkler leakage, unless the system has been protected against freezing;
(iii) Building glass breakage;
(iv) Water damage;
(v) Theft; or
(vi) Attempted theft.
With respect to perils covered against other than those listed in (b) (i) through to (b)
(vi) above, the maximum the Authority will pay will be the actual cash value less a
further 25% of the actual cash value.
The covered building is considered vacant or unoccupied when it does not contain
adequate covered property to conduct customary business operations, but this provision
shall not apply to any time period when customary business operations are suspended
due to circumstances that are usual to such business operations.
E) This MOC - P shall not be prejudiced by:
1) error in stating the name, number, street, or location of any building(s) and contents
covered hereunder, or any error or omission involving the name or title of the
Covered Member.
2) any act or neglect of the owner of the building, if the Covered Member hereunder
is not the owner, or of any occupant of the within described premises other than the
Covered Member, when such act or neglect is not within the control of the Covered
Member named herein; or
3) by failure of the Covered Member to comply with any of the warranties or
conditions endorsed hereon in any portion of the premises over which the Covered
Member has no control.
I. PROTECTIVE SAFEGUARDS
The Covered Member shall exercise due diligence in maintaining in complete working
order all protective safeguard equipment and services.
J. NOTICE OF LOSS
In the event of loss or damage covered against under this MOC - P, the Covered
Member shall give, as soon as practicable but no later than two years from the date of
discovery, that a loss has occurred, notice thereof to California Joint Powers Insurance
Authority via its website claim reporting system.
K. ARBITRATION OF VALUE
35
stock or other proprietary interest in the Covered Member.
C) whether made before or after loss had occurred, such agreement must release
or waive the entire Right of Recovery of the named Covered Member against
such Third party or
D) a Tenant of the Named Covered Member.
N. CANCELLATION
This MOC - P may be cancelled by the Covered Member at any time by written notice
or surrender of this MOC - P. This MOC - P may also be cancelled by or on behalf of
the Authority by delivering to the Covered Member or by mailing to the Covered
Member by registered, certified or other first class mail at the Covered Member's
address as held by the Authority, written notice, not less than sixty (60) days prior to
the Authority's intent to cancel. The mailing of such notice as aforesaid shall be
sufficient proof and this MOC - P and shall terminate at the date and hour specified in
such notice. Notwithstanding what has been stated above, however, should this MOC
- P be cancelled for non-payment of premium, the Authority shall only be required to
give the Covered Member ten (10) days' notice.
If coverage in total shall be cancelled by the Covered Member, the Authority shall
retain the customary short rate proportion of the premium hereon.
Payment or tender of any unearned premium by the Authority shall not be condition
precedent to the effectiveness of cancellation but such payment shall be made
forthwith.
Cancellation shall not affect coverage on any shipment in transit on date of
cancellation. Coverage will continue in full force until such property is safely
delivered and accepted at place of final destination.
O. ABANDONMENT
There shall be no abandonment to the Authority of any property.
P. ASSIGNMENT
Assignment or transfer of this MOC - P shall not be valid except with the written
consent of the Authority.
Q. SALVAGE
When, in connection with any loss hereunder, any salvage is received prior or
subsequent to the payment of such loss, the loss shall be figured on the basis on which
it would have been settled had the amount of salvage been known at the time the loss
was originally determined.
37
V. LIBERALIZATION
If during the period that coverage is in force under this MOC - P, or within forty-five
(45) days prior to the inception date thereof, on behalf of the Covered Member there
be adopted, or filed with an approved or accepted insurance authority, all in conformity
with law, any changes in the form attached to this MOC - P by which this form of
MOC - P could be extended or broadened without increased assessment charge by
endorsement or substitution of form, then such extended broadened MOC - P shall
inure to the benefit of the Covered Member hereunder as though such endorsement or
substitution of form had been made.
W. LOSS PAYABLE CLAUSE
In the event of a loss occurring under this MOC - P, the loss payment will be made in
favor of the Covered Member(s) submitting the claim alone, and not to the program
name.
X. JOINT LOSS ADJUSTMENT — MECHANICAL BREAKDOWN
In the event of damage to or destruction of property covered by this MOC - P and also
covered in a Mechanical Breakdown (aka: Boiler and Machinery) policy(ies), and there is
disagreement between the Authority with respect to:
(1) Whether such damage or destruction was caused by a peril covered by this MOC
- P or by an accident covered by such Mechanical Breakdown policy(ies) or
(2) The extent of participation of this MOC - P and of such Mechanical Breakdown
Insurance policy(ies) in a loss which is covered, partially or wholly, by one or
all of said policies.
The Authority shall, upon written request of the Covered Member, pay to the Covered
Member one-half of the amount of the loss which is in disagreement, but in no event more
than the Authority would have paid if there had been no Mechanical Breakdown policy(ies)
in effect, subject to the following conditions:
1. The amount of loss which is in disagreement after making provisions for any
undisputed claims payable under said policy(ies) and after the amount of the
loss is agreed by the Covered Member and the Authority, is limited to the
minimum amount remaining payable under either the Mechanical Breakdown
policy(ies) or this MOC - P.
2. The Mechanical Breakdown Insurer(s) shall simultaneously pay to the Covered
Member one-half of the said amount which is in disagreement.
3. The payments by the Authority hereunder and acceptance of the same by the
Covered Member signify the agreement of the Authority to submit to and proceed
with Arbitration within sixty (60) days of such payments.
39
4. Whenever the Authority shall pay to the Lender any sum for loss or damage under
this MOC - P and shall claim that as to the Covered Member no liability therefor
exists, the Authority, at its option, may pay to the Lender the whole principal sum
and interest and other indebtedness due or to become due from the Covered
Member, whether secured or unsecured, (with refund of all interest not accrued),
and the Authority, to the extent of such payment, shall thereupon receive a full
assignment and transfer, without recourse, of the debt and all rights and securities
held as collateral thereto.
If there be any other coverage upon the within described property, the Authority
shall be liable under this MOC - P as to the Lender for the proportion of such loss
or damage that the sum hereby covered bears to the entire coverage of similar
character on said property under policies held by, payable to and expressly
consented to by the Lender. Any Contribution Clause included in any Fallen
Building Clause Waiver or any Extended Coverage Endorsement attached to this
MOC - P is hereby nullified, and also any Contribution Clause in any other
endorsement or rider attached to this MOC - P is hereby nullified except
Contribution Clauses for the compliance with which the Covered Member has
received reduction in the rate charged or has received extension of the coverage to
include hazards other than fire and compliance with such Contribution Clause is
made a part of the consideration for insuring such other hazards. The Lender upon
the payment to it of the full amount of its claim, will subrogate the Authority (pro
rata with all other insurers contributing to said payment) to all of the Lender's rights
of contribution under said other coverage.
6. The Authority reserves the right to cancel this MOC - P at any time, as provided
by its terms, but in such case this MOC - P shall continue in force for the benefit
of the Lender for ten (10) days after written notice of such cancellation is received
by the Lender and shall then cease.
7. This MOC - P shall remain in full force and effect as to the interest of the Lender
for a period of ten (10) days after its expiration unless an acceptable policy in
renewal thereof with loss thereunder payable to the Lender in accordance with the
terms of this Lender's Loss Payable clause, shall have been issued by some
insurance company and accepted by the Lender.
Should legal title to and beneficial ownership of any of the property covered under
this MOC - P become vested in the Lender or its agents, coverage under this MOC
- P shall continue for the term thereof for the benefit of the Lender but, in such
event, any privileges granted by this Lender's Loss Payable clause which are not
also granted the Covered Member under the terms and conditions of this MOC - P
and/or under other riders or endorsements attached thereto shall not apply to the
coverage hereunder as respects such property.
All notices herein provided to be given by the Authority to the Lender in
connection with this MOC - P and this Lender's Loss Payable clause shall be mailed
to or delivered to the Lender at any address as directed by the Covered Member.
41
D. EXCLUSIONS
A) Loss or damage occasioned by: wear and tear, gradual deterioration, insects, vermin,
inherent vice or damage sustained due to and resulting from any repairing, restoration
or retouching process.
B) Loss or damage caused by or resulting from:
(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, or
(b) by military, naval or air forces, or
(c) by an agent of any such government, power, authority or forces
(2) any weapon of war employing atomic fission or radioactive force whether in time
of peace or war.
(3) insurrection, rebellion, revolution, civil war, usurped power or action taken by
governmental authority in hindering, combating or defending against such an
occurrence, seizure or destruction under quarantine or customs regulations,
confiscation by order of any government or public authority or risks of contraband
or illegal transportation or trade.
C) Loss by nuclear reaction or nuclear radiation or radioactive contamination, all whether
controlled or uncontrolled and whether such loss be direct or indirect, proximate or
remote, or be in whole or in part caused by, contributed to, or aggravated by the covered
perils covered against in this Section; however, subject to the foregoing and all
provisions of this Section, direct loss by fire resulting from nuclear reaction or nuclear
radiation or radioactive'contamination is covered against by this Section.
D) Loss or damage caused by or resulting from infidelity or any dishonest act on the part
of the Covered Member, it's employees .or agents or others to whom the property may
be entrusted (bailees and carriers for hire excepted) or other party of interest.
E. LOSS PAYMENT BASISIVALUATION
The valuation of each article of property covered by this MOC - P shall be determined as
follows:
(1) Property of the Covered Member shall be covered for and valued at the current fair value
of each article indicated on the books and records of the Covered Member prior to loss,
according to the Covered Member's valuation of each object covered.
(2) Property of others loaned to the Covered Member and for which the Covered
Member may be legally liable, or which the Covered Member has been instructed to
43
assign and transfer such claim or right of action to the Authority or, at the Authority's
option, execute and deliver to the Authority the customary form of loan receipt upon
receiving an advance of funds in respect of the loss or damage; and will subrogate the
Authority to, or will hold in trust for the Authority, all such rights of action to the extent
of the amount paid or advanced, and will permit suit to be brought in the Covered
Member's name under the direction of and at the expense of the Authority.
(7) Protection and Preservation of Property: As per Section IV GENERAL CONDITIONS
F)
(8) Appraisal: If the Covered Member and the Authority fail to agree as to the amount of
loss, each shall on the written demand of other, made within sixty (60) days after receipt
of proof of loss by the Authority, select a competent and disinterested appraiser, and the
appraisal shall be made at a reasonable time and place. The appraisers shall first select a
competent and disinterested umpire, and failing for fifteen (15) days to agree upon such
umpire, then on the request of the Covered Member or the Authority, such umpire shall
be selected by a judge of a court of record in the state in which such appraisal is pending.
The appraisers shall then appraise the loss, stating separately the actual cash value at the
time of loss and the amount of loss, and failing to agree shall submit their differences to
the umpire. An award in writing of any two shall determine the amount of loss. The
Covered Member and the Authority shall each pay their chosen appraiser and shall bear
equally the other expenses of the appraisal and umpire. The Covered Member'shall not
be held to have waived any of its rights by any act relating to appraisal.
(9) Civil Authority: Property covered under this Section against the peril of fire is also
covered against the risk of damage or destruction by Civil authority during a
conflagration and for the purpose of retarding the same; provided that neither such
conflagration nor such damage or destruction is caused or contributed to by a peril
otherwise excluded herein.
(10) Conformity to Statute: Terms of this Section that are in conflict with the statutes of the
state wherein this Section is issued are hereby amended to conform to such statutes.
(11) 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 Section or stop the Covered
Member from asserting any right under the terms of this Section, nor shall the terms of
this Section be waived or changed except by endorsement issued to form a part of this
Section.
(12) Additional Covered Party(ies): The owner and owners defined as associations,
corporations, firms, institutions, museums, persons and others who own or control
collections, objects or articles who make them available to the Covered Member, and
temporary borrowers or custodians (but not carriers, packers or shippers) of property
covered, are additional Covered Party(ies) hereunder, but only as respects coverage
afforded said Covered Member's property.
(13) Packing: It is agreed by the Covered Member that the property covered hereunder be
packed and unpacked by competent packers.
45
SECTION VI - MOBILE / CONTRACTORS EQUIPMENT
A. COVERAGE
This extension covers only mobile machines, including equipment thereof while
attached thereto or located thereon, such as bulldozers, drag lines, power shovels,
derricks, drills, concrete mixers and other machinery of a mobile nature.
This extension insures against all risks of direct loss or damage to the above described
property from any external cause except as provided below:
A) Loss or damage due to wear, tear, rust, corrosion, latent defect, mechanical
breakage, or improper assemblage.
B) Loss or damage due to the weight of the load imposed on the machine exceeding
the capacity for which such machine was designed.
C) Loss or damage to crane or derrick boom(s) and jib(s) of lattice construction while
being operated unless directly caused by fire, lightning, hail, windstorm, earthquake
shock, explosion, riot, riot attending a strike; civil commotion, actual physical
contact with an aircraft or airborne missile including objects falling therefrom,
collision with other vehicles or other contractors equipment whether or not such
other equipment is covered hereunder, landslide, or upset of the unit of which it is
a part (but only when and to the same extent that such other perils are covered by
the MOC - P).
D) Loss or damage due to explosion arising from within steam boilers.
E) Loss or damage to dynamos, exciters, lamps, switches, motors or other electrical
appliances or devices, including wiring, caused by lightning or other electrical
currents (artificial or natural) unless fire ensues and then for the loss by fire only.
F) Loss or damage due to dishonesty of Covered Member's employees or persons to
whom the Covered Member's property is entrusted.
G) Loss or damage caused by or contributed to failure of the Covered Member to keep
and maintain the property in a thorough state of repair.
H) Loss or damage caused by or resulting from:
(1) hostile or warlike action in time of peace or, 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 using military, naval or air forces, or
(b) any military, naval or air forces, or
(c) by an agent of any such government, power, authority or forces
47
E. DEFINITIONS
Contractors' Equipment shall include but is not limited to:
Land vehicles including equipment and apparatus attached thereto, whether or not self-
propelled and not subject to motor vehicle registration.
49
(4) The amount determined under (3) above shall be increased or decreased in
conformity with the normal fluctuations in the amount of accounts receivable
during the fiscal month involved, due consideration being given to the experience
of the business since the last day of the last fiscal month for which statement has
been rendered.
There shall be deducted from the total amount of accounts receivable, however established,
the amount of such accounts evidenced by records not lost or damaged or otherwise
established or collected by the Covered Member, and an amount to allow for probable bad
debts which would normally have been uncollectible by the Covered Member. All unearned
interest and service charges shall be deducted.
D. DEFINITION
ACCOUNTS RECEIVABLE
(1) All sums due the Covered Member from customers, provided the Covered Member
is unable to effect collection thereof as the direct result of loss or damage to records
of accounts receivable.
(2) Interest charges on any loan to offset impaired collections pending
repayment of such sums made uncollectible by such loss or damage.
(3) Collection expense in excess of normal collection cost and made necessary because
of such loss or damage.
(4) Other expenses, when reasonably incurred by the Covered Member, in re-
establishing records of accounts receivable following such loss or damage.
51
The Binding Arbitration Process shall be as follows:
A. Following a decision by the Appeals Committee, the appealing Member shall notify the
Chief Executive Officer in writing, within 30 days of the Appeals Committee's final
decision, that it wishes to participate in Binding Arbitration and shall submit a non-
refundable $1,000 arbitration appeal fee. The written notice shall specify the grounds for
the arbitration.
B. Following payment of the arbitration appeals fee, the name of each Member, other than
the appealing Member and the Members represented on the Appeals Committee, shall be
placed in an unmarked envelope. Each envelope shall be placed in a box and eleven
envelopes shall be drawn by the Chief Executive Officer. A representative of the
appealing Member may be present at the drawing.
C. The Chief Executives of the eleven Members shall be the pool of potential arbitrators.
The eleven Members and the names of their Chief Executives shall be given in writing to
the appealing Member.
D. The appealing Member shall have the right to strike two or less names from the pool for
any reason which shall not be disclosed. The Authority shall have the right to strike two
or less names from the pool for any reason which shall not be disclosed. The appealing
Member and the Authority must strike names within five business days of the drawing.
The right of either party to strike names shall lapse at 5:00 PM on the fifth day following
the drawing. Notice of names stricken by either party shall be given in writing to the
other party prior to 5:00 PM on the fifth day following the drawing.
E. The remaining Chief Executives shall be contacted by the Chief Executive Officer to
determine their willingness to serve on the arbitration panel. If more than five are willing
to serve, each name shall be placed in an unmarked envelope, put in a box, and the Chief
Executive Officer shall draw five envelopes from the box. The individuals whose names
are drawn shall be the arbitration panel and they shall be disclosed- in writing to the
appealing Member.
F. If only five are willing to serve, they shall be the arbitration panel.
G. f fewer than five are willing to serve, the name of each member not drawn in the previous
selection drawing shall be placed in an unmarked envelope, put in a box, and four
envelopes shall be drawn for each arbitration panel position needed to have a five -
member panel. A representative of the appealing Member may be present at the drawing.
The names drawn shall be disclosed to the appealing Member who may reject, for any
reason which shall not be disclosed, one name for each four names drawn. The Authority
may also reject one name for each four names drawn and shall not disclose the reason.
Names rejected by the appealing Member and the Authority must be rejected within 48-
hours of the drawing. The right to reject names shall lapse 48-hours following the
drawing.
H. The Chief Executives of the Members remaining shall be contacted by the Chief
Executive Officer to determine their willingness to serve on the arbitration panel. The
names of those willing to serve shall be placed in unmarked envelopes, put in a box, and
the number necessary to fill out the arbitration panel shall be drawn by the Chief
53
ENDORSEMENTS
1. SEEPAGE AND / OR POLLUTION AND / OR CONTAMINATION EXCLUSION
Notwithstanding any provision in the MOC - P to which the endorsement is attached, this MOC
- P does not cover loss, damage, costs or expenses in connection with any kind or description
of seepage and / or pollution and / or contamination, direct or indirect, arising from any cause
whatsoever.
Nevertheless, if fire is not excluded from this MOC - P and a fire arises directly or indirectly
from seepage and / or pollution and / or contamination, any loss or damage covered under this
MOC - P arising directly from that fire shall, (subject to the terms, conditions and limitations
of the MOC - P) be covered.
However, if the covered property is the subject of direct physical loss or damage for which the
Covered Member has paid or agreed to pay, then this MOC - P (subject to its terms, conditions
and limitations) insures against direct physical loss or damage to the property covered
hereunder caused by resulting seepage and / or pollution and / or contamination.
The Covered Member shall give notice to the Authority of Intent to claim NO LATER THAN
TWELVE (12) MONTHS AFTER THE DATE OF THE PHYSICAL LOSS OR
DAMAGE.
DEBRIS REMOVAL AND COST OF CLEAN-UP EXTENSION
Notwithstanding the provisions of the preceding exclusions in this endorsement or any provision
respecting seepage and/or pollution and/or contamination, and/or debris removal and/or cost of clean-
up in the MOC - P to which this endorsement is attached, in the event of direct physical loss or damage
to the property covered hereunder, this MOC - P (subject otherwise to its terms, conditions and
limitations, including but not limited to any applicable deductible) also insures, within the sum
covered:
A) expenses reasonably incurred in removal of debris of the property hereunder destroyed
or damaged from the premises of the Covered Member and/or covered party;
and/or
B) cost of clean-up at the premises of the Covered Member made necessary as a result of
such direct physical loss or damage;
PROVIDED that this MOC - P does not insure against the costs of decontamination or removal
of water, soil or any other substance on or under such premises.
It is a condition precedent to recovery under this extension that the Company shall have
paid or agreed to pay for direct physical loss or damage to the property covered hereunder
unless such payment is precluded solely by the operation of any deductible and that the
Covered Member shall give notice to the Company of intent to claim for cost of removal
55
2. Electronic Data Processing Media Valuation
Notwithstanding any provision to the contrary within the MOC - P or any endorsement
thereto, it is understood and agreed as follows: -
Should electronic data processing media covered by this MOC - P suffer physical loss or
damage covered by this MOC - P, then the basis of valuation shall be the cost to repair,
replace or restore such media to the condition that existed immediately prior to such loss
or damage, including the cost of reproducing any ELECTRONIC DATA contained thereon,
providing such media is repaired, replaced or restored. Such cost of reproduction shall
include all reasonable and necessary amounts, not to exceed $5,000,000 any one loss,
incurred by the Covered Member in recreating, gathering and assembling such
ELECTRONIC DATA. If the media is not repaired, replaced or restored the basis of
valuation shall be the cost of the blank media. However, this MOC - P does not insure any
amount pertaining to the value of such ELECTRONIC DATA to the Covered Member or
any other party, even if such ELECTRONIC DATA cannot be recreated, gathered or
assembled.
57
E. DEFINITIONS
(a) Occurrence: The word "Occurrence" shall mean any one loss and/or series of losses
arising out of and directly occasioned by one Act or series of Acts of Terrorism or
Sabotage for the same purpose or cause. The duration and extent of any one
"Occurrence" shall be limited to all losses sustained by the Covered Member at the
property covered herein during any period of 72 consecutive hours arising out of the
same purpose or cause. However, no such period of 72 consecutive hours may extend
beyond the expiration of this MOC - P unless the Covered Member shall first sustain
direct physical damage by an Act of Terrorism or an Act of Sabotage prior to expiration
and within said period of 72 consecutive hours nor shall any period of 72 consecutive
hours commence prior to the attachment of this Coverage Part B.
(b) Act of Terrorism: The words "Act of Terrorism" means an act or series of acts,
including but not limited to the use of force or violence, of any person or group(s) of
persons, whether acting alone or on behalf of or in connection with any organization(s),
committed for political, religious or ideological or similar purposes including the
intention to influence any government and/or to put the public, or any section of the
public, in fear for such purposes.
(c) Act of Sabotage: For the purpose of this Coverage Part B, an act of sabotage means a
subversive act or series of such acts committed for political, religious or ideological
purposes including the intention to influence any government and/or to put the public
in fear for such purposes.
F. LOSSES EXCLUDED
Coverage Part B does not cover:
Loss or damage arising directly or indirectly from nuclear detonation, nuclear
reaction, nuclear radiation or radioactive contamination, however such nuclear
detonation, nuclear reaction, nuclear radiation or radioactive contamination may
have been caused.
2. Loss or damage occasioned directly or indirectly by war, invasion or warlike
operations (whether war be declared or not), hostile acts of sovereign or local
government entities, civil war, rebellion, revolution, insurrection, martial law,
usurpation of power, or civil commotion assuming the proportions of or amounting
to an uprising.
Loss by seizure or legal or illegal occupation unless physical loss or damage is
caused directly by an Act of Terrorism or an Act of Sabotage.
4. Loss or damage caused by confiscation, nationalization, requisition, detention,
embargo, quarantine, or any result of any order of public or government authority
which deprives the Covered Member of the use or value of its property, nor for loss
or damage arising from acts of contraband or illegal transportation or illegal trade.
59
5. Any land conveyance, including vehicles, locomotives or rolling stock, unless such
land conveyance is declared hereon and solely whilst located at the property
covered herein at the time of its damage.
6. Animals, plants and living things of all types.
H. TEMPORARY OR UNNAMED LOCATIONS/ERRORS AND OMISSIONS
Coverage Part B does not cover property covered under any temporary or unnamed location
or errors and omissions coverage provided under the MOC - P Coverage Part A if such
property is located within the Restricted Areas being:
New York City - 10001 through to 10029, 10036, 10038, 10044, 10048, 10128
Chicago - 60601 through to 60611
San Francisco - 94102, 94103, 94104, 94105, 94107, 94108, 94109, 94110,
94111, 94112, 94114, 94115, 94116, 94117, 94118, 94121,
94122, 94123, 94124, 94127, 94129, 94131, 94132, 94133,
94134
Washington - 20001, 20004, 20005, 20006
Boston - 02108, 02109, 02110, 02111, 02113, 02114
I. CLAIMS
The Covered Member, upon knowledge of any occurrence likely to give rise to a claim
hereunder, shall give written advice as soon as reasonably practicable to the Authority for
that purpose in the Declarations Page, who is to advise the Authority within seven (7) days
of such knowledge of any occurrence and it is a condition precedent to the liability of the
Authority that such notification is given by the Covered Member as provided for by this
MOC - P.
If the Covered Member makes a claim under this MOC - P the Covered Member must give
the Authority such relevant information and evidence as may reasonably be required and
co-operate fully in the investigation or adjustment of any claim. If required by the
Authority, the Covered Member must submit to examination under oath by any person
designated by the Authority.
J. AUTOMATIC COVERAGE / REPORTING CONDITIONS
All as per the MOC - P Coverage Part A except in Restricted Areas, as stated above.
311