California Joint Powers Insurance Authority (CJPIA) - FY2025-003
MEMORANDUM OF COVERAGE
PROPERTY PROGRAM
Issued to the City of Rancho Palos Verdes
EFFECTIVE JULY 1, 2024–JULY 1, 2025
MEMORANDUM OF COVERAGE
PROPERTY PROGRAM
ADMINISTERED BY THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
MEMBER: City of Rancho Palos Verdes
MAILING ADDRESS: 30940 Hawthorne Boulevard
Rancho Palos Verdes, CA 90275-5351
PROTECTION LIMITS: See Declarations
PROTECTION PERIOD: From July 1, 2024 at 12:01 a.m. Pacific Time until July 1,
2025 at 12:01 a.m. Pacific Time.
ENDORSEMENT(S):
This Memorandum of Coverage - Property Program (MOC - P), and any endorsements thereto,
are a description of the terms and conditions of the Program through which certain specified and
limited self-insured risks of property are administered by the Authority and shared by its
Covered Members. The Memorandum is not an insurance policy. As provided in Section 990.8
of the California Government Code and appellate court cases of Orange County Water District
v. Association of California Water Agencies JPIA (1997) and City of South El Monte v. Southern
California Joint Powers Insurance Authority (1995), the pooling of self-insured claims or losses
among the Members of the Authority shall not be considered insurance nor be subject to
regulation under the Insurance Code.
California JPIA
President
TABLE OF CONTENTS
I. DECLARATIONS ................................................................................................. 1
II. COVERAGE PART A - “ALL RISK”, EARTHQUAKE, AND FLOOD PERILS ...... 1
A. Limits of Liability .................................................................................................... 1
B. Sublimits of Liability ............................................................................................... 2
C. Coverage Agreement ............................................................................................ 3
D. Unit of Coverage Defined ...................................................................................... 5
III. PHYSICAL DAMAGE TO PROPERTY ............................................................... 7
Coverage .................................................................................................................... 7
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 ................................................................................................................ 10
8. Demolition Cost ............................................................................................................. 10
9. Increased Cost of Construction ..................................................................................... 10
10. Errors And Omissions ................................................................................................... 10
11. Animals ......................................................................................................................... 10
12. Valuable Papers ............................................................................................................ 11
13. Transit ........................................................................................................................... 11
14. Accidental Contamination Extension ............................................................................. 11
15. Leasehold Interest ......................................................................................................... 12
16. Brands, Labels, And Trademarks .................................................................................. 12
17. Consequential Damage ................................................................................................. 13
18. Consequential Reduction in Value ................................................................................ 13
19. Exhibition, Exposition, Fair Or Trade Show ................................................................... 13
20. Impounded Water .......................................................................................................... 13
21. Reward ......................................................................................................................... 13
22. Water Backup from Sewer or Drain ............................................................................... 13
23. Real Property ................................................................................................................ 14
24. Landscaping .................................................................................................................. 14
25. Unscheduled Or Temporary Locations .......................................................................... 14
Property Not Covered ............................................................................................... 14
Asbestos Clean-Up and Removal ............................................................................. 16
Loss Payment Basis/Valuation ................................................................................. 17
Automatic Coverage/Reporting Conditions ............................................................... 19
Definitions ................................................................................................................. 21
IV. BUSINESS INTERRUPTION ............................................................................. 25
A. Coverage ............................................................................................................. 25
B. Extensions of Coverage ...................................................................................... 25
1. Ingress/Egress .............................................................................................................. 25
2. Interruption By Civil Authority ........................................................................................ 26
3. Demolition and Increased Time to Rebuild .................................................................... 26
4. Non-Productive Property ............................................................................................... 26
5. Contingent Business Interruption and/or Extra Expense and/or Rental Value ............... 26
6. Tax Revenue Interruption Protection ............................................................................. 27
7. Extended Period of Indemnity ....................................................................................... 27
C. Exclusion ............................................................................................................. 28
D. Loss Payment Valuation Expenses to Reduce Loss ........................................... 28
E. Special Condition Applicable ............................................................................... 28
F. Definitions ........................................................................................................... 28
G. Period of Restoration ........................................................................................... 29
V. GENERAL CONDITIONS .................................................................................. 30
Perils Covered .......................................................................................................... 30
Perils Excluded ......................................................................................................... 30
Territorial Limits ........................................................................................................ 33
Reinstatement .......................................................................................................... 33
Free On Board (F.O.B.) Shipments .......................................................................... 33
Protection and Preservation of Property ................................................................... 33
Breach of Conditions ................................................................................................ 34
Permits and Privileges .............................................................................................. 34
Protective Safeguards .............................................................................................. 35
Notice of Loss ........................................................................................................... 35
Arbitration of Value ................................................................................................... 36
Proof of Loss ............................................................................................................ 36
Subrogation .............................................................................................................. 36
Cancellation .............................................................................................................. 37
Abandonment ........................................................................................................... 37
Assignment ............................................................................................................... 37
Salvage ..................................................................................................................... 37
Other Insurance/Coverage ....................................................................................... 37
Excess Insurance/Coverage ..................................................................................... 38
Right to Review Records Following a Covered Loss ................................................ 38
Concealment and Fraud ........................................................................................... 38
Liberalization ............................................................................................................ 38
Loss Payable Clause ................................................................................................ 39
Joint Loss Adjustment – Mechanical Breakdown ...................................................... 39
Lender’s Loss Payable ............................................................................................. 40
VI. 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
VII. MOBILE/CONTRACTORS EQUIPMENT........................................................... 47
Coverage .................................................................................................................. 47
Exclusions ................................................................................................................ 48
Loss Payment Basis/Valuation ................................................................................. 48
Special Condition ...................................................................................................... 48
Definition ................................................................................................................... 48
VIII. ACCOUNTS RECEIVABLE ............................................................................... 49
A. Coverage ............................................................................................................. 49
B. Exclusions ........................................................................................................... 49
C. Loss Payment Basis/Valuation ............................................................................ 49
D. Definition ............................................................................................................. 50
IX. APPEAL OF DISPUTES .................................................................................... 51
X. ENDORSEMENTS ............................................................................................. 54
A. Seepage and/or Pollution and/or Contamination Exclusion ............................... 54
B. Property Cyber and Data Endorsement ............................................................. 55
C. Communicable Disease Endorsement ................................................................ 57
XI. COVERAGE PART B - TERRORISM ................................................................ 58
A. Limits of Liability .................................................................................................. 58
B. Sublimits of Liability ............................................................................................. 58
C. Deductible ........................................................................................................... 58
D. Coverage Clause ................................................................................................. 58
E. Application of Memorandum of Property Coverage Provisions ........................... 58
F. Maintenance of the Memorandum Of Property Coverage ................................... 58
G. Definitions ........................................................................................................... 59
H. Exclusions ........................................................................................................... 59
I. Property Not Covered .......................................................................................... 60
J. Temporary or Unnamed Locations/Errors and Omissions ................................... 61
K. Claims ................................................................................................................. 61
L. Automatic Coverage/Reporting Conditions ......................................................... 61
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I. 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, 2023 at 12:01 am Pacific Time to July 1, 2024 at 12:01 am Pacific
Time.
C. Covered Locations
As held on file with the Authority’s authorized representative.
D. Notification of Losses
To the California Joint Powers Insurance Authority via its website claim
reporting system.
II. 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 unless
specifically stated. They are not a per Covered Member maximum.
In the event of loss or damage covered by this MOC - P and subject to coverage
terms contained within this MOC - P, the Authority shall not be liable for more
than the amounts shown under each Coverage Part.
A. Limits of Liability
$25,000,000 per occurrence except as follows:
$25,000,000 shared by all members 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 shared by all members per occurrence and in the annual
aggregate as respects Flood for those locations that Covered Members
specifically purchase Earthquake Shock coverage.
$10,000,000 shared by all members per occurrence and in the annual
aggregate as respects Flood for those locations that the Covered
Members do not purchase Earthquake Shock coverage.
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The maximum amount recoverable hereunder in respect of all Flood
shall not exceed $25,000,000 in the annual aggregate shared by all
members.
The maximum amount recoverable in respects of Earthquake Shock
shall not exceed $25,000,000 in the annual aggregate shared by all
members.
B. Sublimits of Liability
$25,000,000 Earthquake Sprinkler Leakage
$25,000,000 Ordinance or Law (Building Laws, Demolition Cost and
Increased Cost of Construction) in respect Earthquake
Shock and Flood only, per occurrence and in the Annual
Aggregate.
$25,000,000 Final Contract Value in respect of Real Property in the
Course of Construction, including new projects at new
locations. Includes Earthquake Shock and Flood for
existing Covered Members reported within 60 days.
Excludes Earthquake Shock and Flood for new Covered
Members.
$25,000,000 Newly Acquired Property per building or structure for
existing Covered Members. Includes Earthquake Shock
for existing Covered Members that already purchase
earthquake shock, when the new location is reported
within 60 days.
$25,000,000 Newly Acquired Property per building or structure for new
Covered Members reported within 60 days. Excludes
Earthquake Shock for new Covered Members.
$5,000,000 Newly Acquired for all piers, docks, wharves and dams
per member reported within 60 days. Includes
Earthquake Shock and Flood for existing Covered
Members that already purchase earthquake shock, when
the new location is reported within 60 days. Excludes
Earthquake Shock and Flood for new Covered Members.
$2,000,000 Per occurrence as respects Off Premises Services
Business Interruption including Extra Expense
$5,000,000 Unscheduled or Temporary Locations
$2,500,000 Scheduled Vacant and Unoccupied Property
$10,000,000 Errors and Omissions
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$5,000,000 Per occurrence and in the annual aggregate inclusive of
resultant Time Element coverages as respects scheduled
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 excluding
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 excluding 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
C. Coverage Agreement
In consideration of the annual contribution charged to the Covered Member by
the Authority, the Authority agrees to provide coverage to the Covered
Member per the terms and conditions of this MOC - P.
1. Name of Covered Parties
The California Joint Powers Insurance Authority and its Member Agencies
that participate in its Property Program as held on file with the Authority.
Further, any entities or individuals for whom a Covered Member is
required to provide coverage as their interests may appear and other
organizations and enterprises which now exist or which hereafter may be
created or acquired and which are owned, financially controlled or actively
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managed by a Covered Member, all jointly, severally or in any combination
of their interests, for account of whom it may concern.
Lessors and other party(ies) of interest in all property of every description
covered hereunder are included herein as additional insureds for their
respective rights and interests, it being understood that the inclusion
hereunder of more than one covered party shall not serve to increase the
Authority's limit of liability.
Mortgagees to whom certificates of insurance or evidence of coverage
have been issued are covered hereunder in accordance with the terms
and conditions of Form 438 BFU NS, CP12 18 1091, or its equivalent.
Loss, if any, shall be adjusted with the Covered Member and payable to
the covered parties as their respective interests may appear, subject
however, to the provisions of any mortgagees or loss payee clauses which
may otherwise be herein provided or endorsed hereon.
It is agreed to include automatically under this MOC - P the interest of
Additional Covered Party(ies), and/or mortgagees and/or loss payees
where applicable without advice.
2. Optional Coverage Participation
It is understood and agreed that certain Covered Members purchase
coverage that is optional under this MOC - P. The selection of such
optional coverage by a Covered Member is as held on file with the
Authority and or the insurance broker.
3. Deductibles
a. “All Risk”
$10,000 per occurrence, all perils and property including fire and
ambulance vehicles and vehicles on the premises and boats, except
as indicated by peril or type of property below:
i. $2,500 per occurrence, radio and telephone equipment in
vehicles
ii. $2,500 per occurrence, auto physical damage – comprehensive
iii. $2,500 per occurrence, auto physical damage – collision
iv. $2,500 per occurrence, sea doos
v. $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
vi. $100,000 per occurrence, unscheduled property, unless Vacant
and Unoccupied in which case there is no coverage
vii. $500,000 per occurrence for Vacant and Unoccupied scheduled
buildings
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b. 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 and Unoccupied 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.1 of this Section.
c. Flood in Respect of Piers
$500,000 per occurrence, per pier.
d. 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.
e. Provisions
i. 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.
ii. 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
In the application of the Earthquake Shock Deductible Clause and made a
part of this coverage, each of the following shall be considered a Separate
Unit of Coverage:
1. Each Separate Building or Structure
2. The Contents of each separate Building or Structure
3. All insured Property in the open
4. Applicable Time Element Coverage of each separate Building or Structure
The Authority shall not be liable for loss to any Unit of Coverage covered
hereunder unless such loss exceeds the percentages stated in this MOC - P
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of the replacement values of such Unit of Coverage at the time when such
loss shall happen, and then only for its proportion of such excess.
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III. PHYSICAL DAMAGE TO PROPERTY
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.
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:
a. 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.
b. Values of the project are reported to the Authority in accordance with
the provisions of this MOC - P regarding changes, additions or
deletions.
c. The peril of Earthquake Shock is excluded as respects property newly
constructed, erected or assembled unless specifically declared and on
file with the Authority.
d. 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.
i. Additional Interest Coverage
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The Authority will pay the additional interest on money the
Covered Member borrows to finance construction or repair.
ii. Rent or Rental Value Coverage
The Authority pay the actual loss of net rental income that
results from delay beyond the projected completion date. But the
Authority will not pay more than the reduction in rental income
less charges and expenses that do not necessarily continue.
iii. Additional Real Estate Taxes or Other Assessments
The Authority will pay the additional real estate taxes or other
assessments the Covered Member incurs for the period of time
that construction is extended beyond the completion date.
iv. Additional Advertising and Promotional Expenses
The Authority will pay the additional advertising and promotional
expense that becomes necessary as a result of a delay in the
completion of the project.
v. Additional Commissions Expense
The Authority will pay the additional expenses which result from
the renegotiating of leases following an interruption in the
project.
vi. Additional Architectural and Engineering Fees
The Authority will pay the additional architectural and
engineering fees that become necessary as a result of a delay in
the completion of the project.
vii. Additional License and Permit Fees
The Authority will pay the additional license and permit fees that
become necessary as a delay in the completion of the project.
viii. Legal and Accounting Fees
The Authority will pay the additional legal and accounting fees
the Covered Member incurs as a result of a delay in the
completion of the project.
2. Fire Fighting Expenses
It is understood and agreed that the Authority shall be liable for the actual
charges of fire fighting expenses including but not limited to those charged
by municipal or private fire departments, or assumed by contract prior to
loss responding to and fighting fire in/on, and/or protecting property
included in coverage provided by this MOC - P.
3. Off Premises Services Clause
It is understood and agreed that coverage under this MOC - P is extended
to include physical damage, business interruption loss and/or extra
expense incurred and/or sustained by the Covered Member as a result of
damage to or destruction of, by the perils covered against, to property of
the type not excluded by this MOC - P of any suppliers furnishing heat,
light, power, gas, water, telephone, steam or similar services to the
Covered Member’s premises.
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4. Architects And Engineers Fees And Loss Adjustment Expenses
This MOC - P also covers any of the following:
a. Architects' and engineers' fees.
b. Loss adjustment expenses including, but not limited to, auditors,
consultants and accountants and excluding Public Adjusters.
5. 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.
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7. Building Laws
The loss occasioned by the enforcement of any local ordinance or state
law regulating the construction, repair or demolition of buildings or
structures, which is in force at the time such a loss occurs, or which
becomes in force within 30 days of the loss, which necessitates the
demolition of any portion of the covered building not damaged by the
covered peril(s).
8. Demolition Cost
The cost of demolishing any undamaged portion of the covered property
including the cost of clearing the site thereof, caused by loss from any
covered peril(s) under this MOC - P and resulting from 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 of loss, or
which become in force within 30 days of the loss, which necessitates such
demolition;
9. Increased Cost of Construction
The increased cost of repair or replacement occasioned by the
enforcement of any local state ordinance or law regulating the
construction, repair or demolition of buildings or structures which is in force
at the time such a loss occurs, or which becomes in force within 30 days of
the loss, which necessitates in repairing or replacing the building covered
hereunder which has suffered damage or destruction by the covered
peril(s) or which has undergone demolition, limited, however, to the
minimum requirements of such ordinance or law.
10. Errors And Omissions
No unintentional errors or omissions, or failure in making reports or other
data hereunder will prejudice the Covered Member’s right of recovery but
will be reported to the Authority as soon as practicable when discovered.
It is further understood and agreed that any error in description of
locations, or values of projects covered or to be covered by the MOC - P
shall not invalidate or otherwise reduce coverage.
The coverage provided by this clause is sublimited per the Program Limits
of Liability shown in the Declarations attached to this MOC - P.
11. Animals
Including police dogs, horses and other specially trained animals.
Coverage includes retraining expenses.
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12. Valuable Papers
Valuable papers or the cost to research, replace, restore or reconstruct
valuable papers lost or damaged by perils covered while inside or outside
the Covered Member’s premises during the term of this MOC - P.
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 contamination 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 and dirt 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.
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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:
a. 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 shall indemnify the Covered
Member for the actual rent payable for the unexpired term of the lease,
or
b. If as a result of such loss or damage the property becomes partially
untenantable or unusable and the lease agreement requires
continuation of the rent, the Authority shall indemnify the Covered
Member for the proportion of the rent applicable thereto, or
c. If as a result of such loss or damage the lease is cancelled by the
lessor pursuant to the lease agreement or by operation of law, the
Authority shall indemnify the Covered Member for its Lease Interest for
the first three months following such loss or damage and for its Net
Lease Interest for the remaining unexpired term of the lease provided,
however, that the Authority shall not be liable for any increase in the
amount recoverable hereunder resulting from the suspension, lapse or
cancellation of any license, or from the Covered Member exercising an
option to cancel the lease; or from any act or omission of the Covered
Member which constitutes a default under the lease; and provided
further that the Covered Member shall use any suitable property or
service owned or controlled by the Covered Member or obtainable from
another source to reduce the loss hereunder.
The following definitions shall apply to this coverage:
a. Lease Interest means the excess rent paid for the same or similar
replacement property over actual rent payable plus cash bonuses or
advance rent paid (including any maintenance or operating charges)
for each month during the unexpired term of the Covered Member’s
lease.
b. Net Lease Interest means that sum which placed at 8% interest
compounded annually would equal the Lease Interest (less any
amounts otherwise payable hereunder).
16. Brands, Labels, And Trademarks
If the Covered Member decides to stamp salvage and/or remove brands,
labels, trademarks, or information that carries or implies the Covered
Member guarantee or warranty on covered property damaged by covered
causes of loss, the Authority will pay expenses to perform those tasks and
the relabeling of the property in compliance with the requirements of the
law.
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17. Consequential Damage
When damage by covered causes of loss, without the intervention of any
other independent cause, results in a sequence of events which causes
physical loss or damage not otherwise excluded to other covered property,
the Authority will cover the resulting physical loss or damage and the
actual loss sustained under Business Interruption coverage during the time
period as would be required with the exercise of due diligence and
dispatch to repair or replace the damaged property.
18. Consequential Reduction in Value
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.
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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
Including natural athletic fields, sand traps, tees and greens as sublimited
per the Program Limits of Liability shown in the Declarations attached to
this MOC - P. Landscaping is only covered if its position and planting was
undertaken by human agency for cosmetic effect.
25. Unscheduled Or Temporary Locations
The Authority will pay, for damage by covered causes of loss, excluding
Flood and Earthquake Shock, to Property at any other location (including
buildings or structures, owned, occupied or which the Covered Member is
obligated to maintain coverage) located within the territorial limitations set
by this MOC - P as sublimited in the Sublimits of Liability shown in the
Declarations of this MOC - P. In the event of a covered loss under this
provision, the Authority reserves the unconditional right to levy a
retroactive premium charge for such property for up to ten prior coverage
years.
Property Not Covered
This MOC - P does not provide coverage for any of the following:
1. Watercraft unless scheduled, and under 26 feet in length.
2. Aircraft, except small unmanned aircraft meaning a device that is used or
intended to be used for flight in the air without the possibility of direct
human intervention from within or on the aircraft and weighing less than 55
pounds on takeoff, including everything that is on board or otherwise
attached to the aircraft, and such coverage is provided only while not in
operation.
3. Retaining walls unless specifically declared and on file with the Authority.
4. Rolling stock, unless specifically declared and on file with the Authority.
5. Standing timber, bodies of water, and growing crops.
6. Land and dirt, (including land on which covered property is located), and
land values except landscaping including natural athletic fields, sand traps,
tees and greens which is excluded excess of the sublimits in the Program
Limits of Liability shown in the Declarations attached to this MOC - P.
7. Property in due course of ocean marine transit.
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8. Shipment by mail after delivery into the custody of the United States Post
Office, Federal Express, UPS, or any other paid delivery service.
9. Unscheduled tunnels, bridges, dams, catwalks (except those not for public
use), roadways, highways, streets, sidewalks(and related appurtenances
to these) culverts, streetlights and traffic signals in excess of the sublimit
per the Program Limits of liability shown in the Declarations attached to the
MOC - P.
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 if the 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.
16
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.
h. Loss by destruction of any animal(s) on the order of the federal or any
state government, or otherwise as a result of having contracted or been
exposed to any contagious or communicable disease.
i. The removal or disposal of the remains of neither any animal(s) nor the
expense thereof unless such loss is the result of an event otherwise
covered by this MOC - P.
j. The loss of any animal(s) that has been unnerved (the term "unnerved"
to be considered as meaning the operation of neurotomy for
lameness).
k. Any claim consequent upon delay, deterioration, or loss of use or loss
of market arising from an event covered by this MOC - P.
13. Unscheduled Vacant and Unoccupied property
Asbestos Clean-Up and Removal
1. This MOC - P only provides coverage for asbestos physically incorporated
in a covered building or structure, and then only that part of the asbestos
which has been physically damaged during the period of coverage by one
of these Listed Perils:
Fire; Explosion; Earthquake Shock; Flood, Water Damage; Lightning;
Windstorm; Hail; Direct impact of vehicle, aircraft or vessel; Riot or Civil
Commotion; Vandalism or Malicious Mischief; or accidental discharge
of fire protective equipment.
2. This coverage is subject to all limitations in the MOC - P and, in addition,
to each of the following specific limitations:
a. The said building or structure must be covered under this MOC - P for
damage by that Listed Peril.
b. The Listed peril must be the immediate, sole cause of the damage to
the asbestos.
c. The Covered Member must report to the Authority the existence and
cost of the damage as soon as practicable after the Listed Peril first
damaged the asbestos. However, this MOC - P does not cover any
such damage first reported to the Authority more than 12 (twelve)
months after the expiration, or termination, of the MOC - P.
d. Coverage under this MOC - P in respect of asbestos shall not include
any sum relating to:
i. Any faults in the design, manufacture or installation of the asbestos.
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ii. Asbestos not physically damaged by the Listed Peril including any
governmental or regulatory authority direction or request of
whatsoever nature relating to undamaged asbestos.
3. Except as set forth in the foregoing Section 2, this MOC - P does not
provide coverage for asbestos or any sum relating thereto.
Loss Payment Basis/Valuation
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:
1. 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 and Unoccupied
property, the following valuation provisions shall apply:
a. On premises defined as Vacant and Unoccupied herein for a period in
excess of 60 days and reported to the Authority, then actual cash value
shall apply.
b. On premises defined as Vacant and Unoccupied 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
2. 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.
3. On manuscripts, mechanical drawings, patterns, 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.
4. 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
18
maintain a buildings’ historical significance without deduction for
depreciation.
5. On property of others for which the Covered Member is liable under written
contract, written lease, or written agreement the Authority' liability in the
event of loss is limited to the Covered Member’s obligation as defined in
said written contract or written lease agreement.
6. Recovery for loss or damage to covered vehicles and contractors
equipment/unlicensed vehicles on or off premises, the Authority shall not
be liable for more than the cost to repair or replace the same with material
of like kind and quality, except when the repair costs exceed the market
value of the vehicle (as established by a current valuation from "Kelly Blue
Book"), in which case the Scheduled Limit shall apply.
7. Animals: The stated value as per schedule on file with the Authority or
insurance broker.
8. The valuation of library contents is based on the raw costs of each
category of books as established by an Authority and Covered Member
agreed upon library association at time of loss. These figures do not
include the "shelving cost" of each book as the Authority recognize that not
all books will be replaced. The coverage for shelving is a "valuable papers"
exposure, i.e., and covered elsewhere in this MOC - P.
Therefore, the formula for adjusting a library loss is:
Number of items in a category multiplied by agreed upon valuation
figure plus shelving cost under "valuable papers" coverage if item is
replaced.
The intention for such a formula is to eliminate the need to adjust library
items on its specific actual cash value or replacement cost.
9. Landscaping, sand traps, tees, putting greens and natural athletic fields;
the actual replacement cost of sod, shrubs, plants and trees; however the
Authority’s liability for replacement of trees, plants and shrubs will be
limited to actual size of the destroyed plant, tree or shrub at the time of the
loss up to a maximum size of a 48 inch box per item but not to exceed
$25,000 per item for trees and shrubs and further limited as stated in the
Limits of Liability shown in the Declarations of Coverage.
10. Definitions As Respects Loss Payment Basis/Valuation
a. Actual Cash Value: Wherever the term "actual cash value" is used as
respects real property or improvements and betterments in this clause,
it shall mean replacement value less physical depreciation.
The aforementioned valuations shall also be used for the purpose of
the assessment adjustment clause of this MOC - P.
b. Replacement Cost shall mean the cost of repairing, replacing,
constructing or reconstructing (whichever is the least) the property on
19
the same site, using new materials of like kind and quality and for like
occupancy without deduction for depreciation, subject to the following:
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.
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
20
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.
Earthquake Shock is excluded from this provision.
4. Piers, Docks, Wharves, and Dams
As respects existing Covered Members and new Covered Members, this
MOC - P is automatically extended to cover all additional piers, docks,
wharves and dams and associated Business Interruption / Extra Expense
which may be purchased, leased, acquired or otherwise become at the
risk of existing Covered Members and 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.
Earthquake Shock is excluded from this provision
5. It is understood and agreed as respects Earthquake Shock:
a. As respects existing Covered Members, this MOC - P is automatically
extended to cover Earthquake Shock for 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 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.
b. As respects new Covered Members added after the inception of the
period of coverage automatic coverage applies for the peril of
Earthquake Shock for a period of 30 days from date of contractual
requirement by any bond, certificate of participation or any similar
investment, for any new locations where there is such a contractual
requirement to provide Earthquake Shock coverage.
6. Course of Construction
Projects for both new and existing Covered Members, including new
projects at new locations, are automatically covered hereon for All Risks
coverage excluding Flood and Earthquake Shock, subject to the applicable
rate.
As respects existing Covered Members this MOC - P is automatically
extended to cover Earthquake Shock and Flood for property in the course
of construction at the applicable rate, subject to such projects being
reported to the Authority within sixty (60) days of attachment.
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If new Covered Members require Earthquake Shock and Flood coverage,
projects must be declared and agreed to by the Authority prior to
attachment.
7. The Authority shall automatically cover such property and/or properties,
subject to all the terms and conditions of the MOC - P to which this clause
is attached; provided, however, that if there shall be any other insurance
contract covering such additional property this MOC - P shall not attach or
provide coverage thereon until liability of all such other coverage shall
have first been exhausted and shall then attach and cover only 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.
Definitions
1. 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
22
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 Member during an elected period of one
hundred and sixty-eight (168) hours arose out of, or was caused by a
single atmospheric disturbance, the stated opinion of the United States
Weather Bureau or comparable authority in any other country or
locality shall govern as to whether or not a single atmospheric
disturbance continued throughout the period at the location(s) involved.
b. Flood
Each loss by flood shall constitute a single loss hereunder.
i. If any flood occurs within a period of the continued rising or overflow
of any river(s) or stream(s) and the subsidence of same within the
banks of such river(s) or stream(s); or
ii. If any flood results from any tsunami, tidal wave or series of tidal
waves caused by any one disturbance such flood shall be deemed
to be a single occurrence within the meaning of this MOC - P.
Should any time period referred to above extend beyond the expiration
date of this MOC - P and commence prior to expiration, the Authority
shall pay all such flood losses occurring during such period as if such
period fell entirely within the term of this MOC - P.
The Authority shall not be liable, however, for any loss caused by any
flood occurring before the effective date and time of this MOC - P or
commencing after the expiration date and time of this MOC - P.
Flood shall mean a general condition of partial or complete inundation
of normally dry land area from:
i. overflow of inland or tidal water
ii. unusual and rapid accumulation or run off of surface waters from
any source.
Flood shall also mean mudslide or mudflow, which is a river or flow of
liquid mud caused by flooding as defined in (a) or (b) above.
The definition of flood does not include ensuing loss or damage
CAUSED BY FIRE, EXPLOSION OR SPRINKLER LEAKAGE.
c. Earthquake Shock
With respect to the peril of earthquake shock, any and all losses from
this cause within a one hundred sixty-eight (168) hour period shall be
deemed to be one loss. The Covered Member may elect the moment
from which each of the aforesaid periods of one hundred sixty eight
23
(168) hours shall be deemed to have commenced but no two such one
hundred sixty eight (168) hour periods shall overlap.
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:
a. Articles of Clothing
b. Jewelry
c. Sound Equipment
d. Fine Arts (up to the sub-limit of unscheduled fine arts)
e. EDP Media and Hardware
f. Valuable Papers
g. 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, 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.
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5. Vacant
A Vacant building has no people and contains little or no furniture, or other
personal property necessary to sustain normal occupancy.
6. Unoccupied
An Unoccupied building has people but contains little or no furniture, or
other personal property necessary to sustain normal occupancy.
25
IV. BUSINESS INTERRUPTION
A. Coverage
Subject to the terms, conditions and exclusions stated elsewhere herein, this
MOC - P provides coverage for:
1. Business Interruption
Against loss resulting directly from interruption of business, services or
rental value caused by direct physical loss or damage, resulting from a
covered peril to real and/or personal property covered hereunder,
occurring during the term of this MOC - P.
In the event of such loss or damage the Authority shall be liable for the
actual loss sustained by the Covered Member for gross earnings as
defined herein and rental value, tax interruption and tuition income as
defined herein resulting from such interruption of business, services, or
rental value; less all charges and expenses which do not necessarily
continue during interruption of business for only such length of time as
would be required with the exercise of due diligence and dispatch to
rebuild, repair or replace such part of the property as has been damaged
or destroyed, commencing with the date of such damage or destruction
and not limited by the date of expiration of this MOC - P (hereinafter
referred to as the period of restoration). Due consideration shall be given
to the continuation of normal charges and expenses including payroll
expenses to the extent necessary to resume operations of the Covered
Member with the same quality of service which existed immediately
preceding the loss.
2. Extra Expense
This MOC - P is extended to cover the necessary and reasonable extra
expenses as hereinafter defined, incurred by the Covered Member in order
to continue as nearly as practicable the normal operation of the Covered
Member's business following damage to or destruction by a covered peril
of real or personal property which is owned, leased or occupied by the
Covered Member. In the event of such damage or destruction, the
Authority shall be liable for such necessary extra expense incurred for only
such length of time as would be required with the exercise of due diligence
and dispatch to rebuild, repair or replace such part of the property as has
been damaged or destroyed commencing with the date of damage or
destruction and not limited by the date of expiration of this MOC - P
(hereinafter referred to as the period of restoration).
B. Extensions of Coverage
1. Ingress/Egress
This MOC - P is extended to insure the actual loss sustained during the
period of time not exceeding sixty (60) consecutive days when, as a direct
result of physical damage by a covered peril(s) by this MOC - P to property
of a type covered hereunder occurring within ten (10) statute miles of a
26
covered location, ingress to or egress from property covered by this MOC -
P is prevented.
Coverage under this extension is subject to a 24-hour waiting period.
2. Interruption By 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 physical
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. Demolition and 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.
5. Contingent Business Interruption and/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
27
prevents a supplier of goods and/or services to the Covered Member
from supplying such goods and/or services, or that prevents a
recipient of goods and/or services from the Covered Member from
accepting such goods and/or services.
6. Tax Revenue Interruption Protection
a. Type of revenue to be covered: Sales Tax, Property Tax, Transient
Occupancy Tax, Tribal Incremental Municipal Services Payments,
whenever the word "Revenue" appears in this MOC - P, it shall mean
only such revenue as specified.
b. Revenue Interruption Protection is only provided if the Covered
Member has scheduled Revenue Interruption values for which
premium has been charged for the relevant perils covered hereunder.
Further coverage is limited to any amount listed in the sublimits section
of the Declarations.
c. Except as hereinafter or heretofore excluded, this MOC - P covers only
against loss resulting directly from necessary interruption of revenue as
specified above collected by or due to the Covered Member caused by
damage to of destruction property which is not operated by the
Covered Member against all risks of direct physical loss or damage
during the term of this MOC - P, which wholly or partially prevents the
generation of revenue for the account of the Covered Member (referred
to as ‘contributing properties’).
d. In the event of such damage or destruction, coverage shall be for the
actual loss sustained by the Covered Member from direct damage by
perils covered hereunder to one or more contributing properties which
results in the interruption of revenue for only the length of time as
would be required with exercise of due diligence and dispatch to
rebuild, replace or repair the contributing property commencing with the
date of damage to the contributing property, but not limited by the
expiration date of this MOC - P.
Such loss recovery after deductible shall be limited to whichever is the
least of:
i. The limit covered on the MOC - P
ii. The actual loss sustained
iii. The difference in amount between 97.5% of the anticipated revenue
and the actual total revenue after the loss.
e. Deductible: Each loss or series of losses arising out of one event
at each location shall be adjusted separately and from the aggregate
amount of all such losses 2.5% of the annual revenue value shall be
deducted.
7. Extended Period of Indemnity
Subject to the terms, conditions and exclusions of the MOC - P to which
this extension is attached, the business interruption, tax interruption and
tuition income and/or extra expense and/or rental value coverage
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provided by this MOC - P is extended to provide 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
a. the date on which the Authority's liability would otherwise terminate or
b. 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 is
the sum of:
a. total net sales and
b. other earnings derived from the operation of the business
less the cost of
a. merchandise sold including packaging materials and
b. materials and supplies consumed directly in supplying the
service(s) sold by the Covered Member, and
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c. service(s) purchased from outside (not employees of the Covered
Member) for resale that does not continue under contract.
No other cost shall be deducted in determining gross earnings.
In determining gross earnings, due consideration shall be given to the
experience of the business before the date of loss or damage and the
probable experience thereafter, had no loss occurred.
2. Merchandise shall be understood to mean goods kept for sale by the Covered
Member that are not the products of manufacturing operations conducted by
the Covered Member.
3. Extra Expense, whenever used in this MOC - P, is defined as the excess (if any)
of the total cost incurred during the period of restoration chargeable to the
operation of the Covered Member’s business over and above the total cost
that would normally have been incurred to conduct the business during the
same period had no damage or destruction occurred. Any salvage value of
property obtained for temporary use during the period of restoration, which
remains after the resumption of normal operations, shall be taken into
consideration in the adjustment of any loss hereunder.
4. Rental Value is defined as the sum of:
a. the total anticipated gross rental income from tenant occupancy, and
b. the amount of all charges which are the legal obligation of the tenant(s)
and which would otherwise be obligations of the Covered Member, and
c. The fair rental value of any portion of said property which is occupied by
the Covered Member, and
d. Any amount in excess of a, b, and c (above) which is an obligation due
under the terms and conditions of any revenue bond, certificate of
participation or other financial instrument.
In determining rental value, due consideration shall be given to the experience
before the date of loss or damage and the probable experience thereafter had
no loss occurred.
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.
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V. GENERAL CONDITIONS
Applicable to all Sections under Coverage Part A
Perils Covered
Subject to the terms, conditions and exclusions stated elsewhere herein, this
MOC - P provides coverage against all risk of direct physical loss or damage
occurring during the period of coverage of this MOC - P.
Perils Excluded
This MOC - P does not cover any of the following:
1. Loss or damage caused by or resulting from moths, vermin, termites, or
other insects, inherent vice, latent defect, wear, tear or gradual
deterioration, contamination, rust, wet or dry rot, unless physical damage
by a peril not otherwise excluded ensues and then only for such ensuing
loss, or loss or damage by normal settling, shrinkage or expansion in
building or foundation.
2. Earthquake shock, except when coverage is purchased and property is
scheduled for the peril of earthquake shock.
3. Delay or loss of markets (this exclusion shall be inapplicable to the extent
inconsistent with any time element coverage provided elsewhere herein).
4. Unless otherwise endorsed, herein, breakdown or derangement of
machinery and/or steam boiler explosion, unless physical loss not
otherwise excluded herein ensues and then only for such ensuing loss.
(This exclusion is applicable only to boilers owned or controlled by the
Covered Member.) This exclusion does not apply to data processing
equipment or media.
5. Loss or damage caused by or resulting from misappropriation, conversion,
inventory shortage, unexplained disappearance, infidelity or any dishonest
act on the part of the Covered Member, its employees or agents or others
to whom the property may be entrusted (bailees and carriers for hire
excepted) or other party of interest.
6. Loss or damage caused by or resulting from electrical injury or disturbance
from artificial causes to electrical appliances, devices of any kind or wiring,
unless physical loss or damage not otherwise excluded herein ensues and
then only for such ensuing loss. This exclusion does not apply to data
processing equipment or media.
7. Loss or damage to personal property resulting from shrinkage,
evaporation, loss of weight, leakage, breakage of fragile articles, marring,
scratching, exposure to light or change in color, texture or flavor, unless
such loss is caused directly by fire or the combating thereof, lightning,
windstorm, hail, explosion, strike, riot, or civil commotion, aircraft, vehicles,
breakage of pipes or apparatus, sprinkler leakage, vandalism and
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malicious mischief, theft, attempted theft, flood or earthquake shock
(earthquake shock shall apply to all locations that are scheduled for
earthquake shock.).
8. Loss or shortage disclosed upon taking inventory or mysterious
disappearance of property (except property in the custody of carriers or
bailees for hire).
9. Loss caused directly or indirectly by:
a. 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
i. by any government or sovereign power (de jure or de facto) or by
any Authority maintaining or using military, naval or air forces; or
ii. by military, naval or air forces; or
iii. by an agent of any such government, power, authority or forces
b. any weapon of war employing atomic fission or radioactive force
whether in time of peace or war
c. 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.
10. 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.
11. 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:
a. Defective workmanship, material, construction or design from any
cause
b. 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.
12. 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.
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13.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.
This coverage is subject to all limitations in the MOC - P and, in addition,
to each of the following specific limitations:
a. The said property must otherwise be covered under this MOC - P for
physical loss or damage by that peril.
b. The Covered Member must report to the Authority the existence and
cost of the physical loss or damage by mold, mildew or fungus as
soon as practicable, but no later than twelve (12) months after the
peril first caused any physical loss or damage to covered property
during the period of coverage. This MOC - P does not cover any
physical loss or damage by mold, mildew or fungus first reported to
the Authority after that twelve (12) month period.
c. Regardless of circumstance or other MOC - P provisions, the maximum
amount covered and payable under this MOC - P for all mold, mildew
or fungus caused by or resulting from such peril is $10,000 per
occurrence for all parts of any claim and in total $100,000 in the
aggregate for the period of coverage. This sublimit applies to all
sections or extensions of the MOC - P combined under which any
claim arises or is made.
14. Except as set forth in the foregoing Section A, this MOC - P does not
cover any loss, damage, claim, cost, expense or other sum directly or
indirectly arising out of or relating to:
mold, mildew, fungus, spores or other microorganism of any type,
nature, or description, including but not limited to any substance whose
presence poses an actual or potential threat to human health.
This exclusion applies regardless whether there is (i) any physical loss or
damage to covered property; (ii) any covered peril or cause, whether or
not contributing concurrently or in any sequence; (iii) any loss of use,
occupancy, or functionality; or (iv) any action required, including but not
limited to repair, replacement, removal, clean-up, abatement, disposal,
relocation, or steps taken to address medical or legal concerns.
15. Terrorism Exclusion
Notwithstanding any provision to the contrary within this MOC - P or any
endorsement thereto it is agreed that this MOC - P excludes loss, damage,
cost or expense of whatsoever nature directly or indirectly caused by,
resulting from or in connection with any act of terrorism regardless of any
other cause or event contributing concurrently or in any other sequence to
the loss.
For the purpose of this MOC - P an act of terrorism means an act,
including but not limited to the use of force or violence and/or the threat
33
thereof, of any person or group(s) of persons, whether acting alone or on
behalf of or in connection with any organization(s) or government(s),
committed for political, religious, 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.
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.
16. Loss, damage, to an unmanned aerial vehicle (aka: drone) while in
operation.
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.
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.
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.
Protection and Preservation of Property
This MOC - P covers:
1. 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.
2. Reasonable and necessary:
a. Fire department fire fighting charges imposed as a result of responding
to a fire in, on or exposing the covered property;
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b. Costs incurred of restoring and recharging fire protection systems
following an covered loss;
c. Costs incurred for the water used for fighting a fire in, on or exposing
the covered property.
This additional coverage is subject to the deductible provisions that would
have applied had the physical loss or damage occurred.
Breach of Conditions
If any breach of a clause, condition or warranty of the MOC - P shall occur
prior to a loss affected thereby under this MOC - P, such breach shall not void
the MOC - P nor avail the Authority to avoid liability unless such breach shall
exist at the time of such loss under this MOC - P, and be a contributing factor
to the loss for which claim is presented hereunder, it being understood that
such breach of clause or condition is applicable only to the property affected
thereby. Notwithstanding the foregoing, if the Covered Member establishes
that the breach, whether contributory or not, occurred without its knowledge or
permission or beyond its control, such breach shall not prevent the Covered
Member from recovering under this MOC - P.
Permits and Privileges
1. Anything in the printed conditions of this MOC - P to the contrary
notwithstanding, permission is hereby granted:
a. to maintain present and increased hazards which are consistent with
the current operation of the Covered Member’s facilities, provided that
the Authority is given notice as soon as reasonably practicable of any
increase in hazard and reserves the right to alter the terms and
conditions of the MOC - P accordingly.
b. to make additions, alterations, extensions, improvements and repairs,
to delete, demolish, construct and reconstruct, and also to include all
materials, equipment and supplies incidental to the foregoing
operations of the property covered hereunder, while in, on and/or about
the premises or adjacent thereto.
c. for such use of the premises as usual and/or incidental to the business
as conducted therein and to keep and use all articles and materials
usual and/or incidental to said business in such quantities as the
exigencies of the business require.
d. for premises to be or become Vacant and Unoccupied or unoccupied
for up to 60 consecutive days.
2. The Authority further agrees that Covered Member facilities or premises
may be Vacant and Unoccupied or unoccupied for more than 60
consecutive days provided that:
a. The same degree of fire protection and security service is maintained
as existed at the time of the discontinuance of normal operations; the
maximum amount the Authority will pay in respect of property damage
from a covered loss to property Vacant and Unoccupied in excess of
35
60 consecutive days, shall be the actual cash value as outlined in
Section E. Loss Payment Basis/Valuation herein; and
b. That written notice is given to the Authority prior to the 60th consecutive
day. In the event the Covered Member fails to comply with the
foregoing, the Authority will not pa y for any loss or damage caused
by any of the following even if they are perils covered:
i. Vandalism;
ii. Sprinkler leakage, unless the s ystem has been protected against
freezing;
iii. Building glass breakage;
iv. Water dam age;
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.
3. This MOC - P shall not be prejudiced by:
a. 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.
b. 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
c. 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.
Protective Safeguards
The Covered Member shall exercise due diligence in maintaining in complete
working order all protective safeguard equipment and services.
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.
36
Arbitration of Value
In case the Covered Member and the Authority shall fail to agree as to the
amount of loss, then, on the written demand of either, each shall select a
competent and disinterested appraiser and notify the other of their
selection. The appraisers shall first select a competent and disinterested
umpire, and failing to agree upon such umpire, then, on request of the
Covered Member or the Authority such umpire shall be selected by judge of a
court of record in the state in which the property covered is located.
The appraisers shall as soon as practicable, appraise the loss stating
separately the loss of each item and failing to agree, shall submit their
differences only to the umpire. An award in writing so itemized, of any two
appraisers when filed with the Authority shall determine the amount of loss.
The party selecting him shall pay each appraiser and the expenses of
appraisal and umpire shall be paid by the parties equally.
Proof of Loss
The Covered Member shall render a signed and sworn proof of loss as soon
as practical after the occurrence of a loss, stating the time, place and cause
of loss, the interest of the Covered Member and of all others in the property,
the value thereof and the amount of loss or damage thereto.
Subrogation
In the event of any loss payment under this MOC - P, the Authority, shall be
subrogated to all the Covered Member’s rights of recovery thereof against any
person or organization and the Covered Member shall execute and deliver
instruments and papers and do whatever else is necessary to secure such
rights.
As respects subrogation it is agreed that, after expenses incurred in
subrogation are deducted, the Covered Member and the Authority shall share
proportionately to the extent of their respective interests as determined by the
amount of their net loss. Any amount thus found to be due to either party from
the other shall be paid promptly.
This MOC - P shall not be prejudiced by agreement made by the Covered
Member releasing or waiving the Covered Member’s right to recovery against
third parties responsible for the loss, under the following circumstances only:
1. If made before the loss has occurred, such agreement may run in favor of
any third party
2. If made after loss has occurred, such agreement may run only in favor of a
third party falling within one of the following categories at the time of loss
a. a third party covered under this MOC - P, or
b. a corporation, firm, or entity
i. owned or controlled by the Covered Member or in which the
Covered Member owns capital stock or other proprietary interest, or
ii. owning or controlling the Covered Member or owning or controlling
capital stock or other proprietary interest in the Covered Member.
37
3. 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
4. a Tenant of the Named Covered Member.
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.
Abandonment
There shall be no abandonment to the Authority of any property.
Assignment
Assignment or transfer of this MOC - P shall not be valid except with the
written consent of the Authority.
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.
Other Insurance/Coverage
Permission is hereby granted to the Covered Member to carry more specific
coverage with another coverage provider on any property covered under this
MOC - P. This MOC - P shall not attach or come to provide coverage upon
any property which at the time of loss is more specifically described and
covered under any other coverage provider’s form until the liability of such
other coverage has first been exhausted and shall then cover only the excess
38
of value of such property over and above the amount payable under such
other coverage, whether collectible or not. This MOC - P, subject to its
conditions and limitations, shall attach and come to provide coverage upon
such property as respects any peril not covered by such other coverage
provider’s form and not otherwise excluded herein.
In the event of a loss that is covered with another coverage provider, wherein
this MOC - P is excess of any amount paid by such other coverage provider
shall be applied to the deductible amount stated elsewhere. Should the
amount paid by such other coverage exceed these deductibles, no further
deductibles shall be applied under this MOC - P.
Excess Insurance/Coverage
Permission is granted to the Covered Member to maintain excess coverage
over the limit of liability set forth in this MOC - P without prejudice to this MOC -
P and the existence of such excess coverage, if any, shall not reduce any
liability under this MOC - P. Also it is understood and agreed as respects
earthquake shock or flood, that in the event of reduction or exhaustion of the
aggregate limits of liability under the underlying policy(ies) by reason of
loss(es) thereunder this MOC - P shall:
1. in the event of reduction, pay out excess of the reduced underlying limit
and
2. in the event of exhaustion, continue in force as the underlying policy.
Right to Review Records Following a Covered Loss
The Covered Member as often as may be reasonably required, shall submit
and so far as within their power, cause all other persons interested in the
property or employees to submit to examination under oath by any person
named by the Authority relative to any and all matters in connection with a
claim, and produce for examination all books of account, bills, invoices and
other vouchers or certified copies thereof if originals be lost, at such
reasonable time and place as may be designated by the Authority or their
representatives and shall permit extracts and copies thereof to be made.
Concealment and Fraud
This entire MOC - P shall be void, if whether before or after a loss, the
Covered Member has willfully concealed or misrepresented any material facts
or circumstance concerning this MOC - P of the subject thereof, or the interest
of the Covered Member therein, or in case of any fraud or false swearing by
the Covered Member relating thereto.
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
39
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.
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.
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.
The Arbitrators shall be three (3) in number, one of whom shall be
appointed by the Mechanical Breakdown Insurer(s) and one of whom
shall be appointed by the Authority hereon and the third appointed by
consent of the other two, and the decision by the Arbitrators shall be
binding on the Authority and that judgment upon such award may be
entered in any Court of Competent Jurisdiction.
4. The Covered Member agrees to cooperate in connection with such
arbitration but not to intervene therein.
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Lender’s Loss Payable
1. Loss or damage, if any, under this MOC - P, shall be paid to any Lender,
its successors and assigns where obligated in a written loan agreement
with the Covered Member, hereinafter referred to as "the Lender", in
whatever form or capacity its interests may appear and whether said
interest be vested in said Lender in its individual or in its disclosed or
undisclosed fiduciary or representative capacity, or otherwise, or vested in
a nominee or trustee of said Lender.
2. The coverage under this MOC - P, or any rider or endorsement attached
thereto, as to the interest only of the Lender, its successors and assigns,
shall not be invalidated nor suspended: (a) by any error, omission, or
change respecting the ownership, description, possession, or location of
the subject of the coverage or the interest therein, or the title thereto; (b)
by the commencement of foreclosure proceedings or the giving of notice of
sale of any of the property covered by this MOC - P by virtue of any
mortgage or trust deed; (c) by any breach of warranty, act, omission,
neglect, or non-compliance with any of the provisions of this MOC - P,
including any and all riders now or hereafter attached thereto, by the
Covered Member, the borrower, mortgagor, trustor, vendee, owner,
tenant, warehouseman, custodian, occupant, or by the agents of either or
any of them or by the happening of any event permitted by them or either
of them, or their agents, or which they failed to prevent, whether occurring
before or after the attachment of this clause, or whether before or after a
loss, which under the provisions of this MOC - P or of any rider or
endorsement attached thereto would invalidate or suspend the coverage
as to the Covered Member, excluding herefrom, however, any acts or
omissions of the Lender while exercising active control and management
of the property.
3. In the event of failure of the Covered Member to pay any premium or
additional premium which shall be or become due under the terms of this
MOC - P or on account of any change in occupancy or increase in hazard
not permitted by this MOC - P, the Authority agrees to give written notice
to the Lender of such non-payment of premium after sixty (60) days from
and within one hundred and twenty (120) days after due date of such
premium and it is a condition of the continuance of the rights of the Lender
hereunder that the Lender when so notified in writing by the Authority of
the failure of the Covered Member to pay such premium shall pay or cause
to be paid the premium due within ten (10) days following receipt of the
Authority's demand in writing therefor. If the Lender shall decline to pay
said premium or additional premium, the rights of the Lender under this
Lender's Loss Payable clause shall not be terminated before ten (10) days
after receipt of said written notice by the Lender.
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
41
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.
5. 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.
8. 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.
9. 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.
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VI. FINE ARTS FLOATER
A. Coverage
The provisions and stipulations of this Section shall apply only to the property
covered hereunder.
If any of the property covered by this Section is also covered under any other
provisions of the MOC - P of which this Section is made a part, those
provisions are hereby amended to exclude such property, the intent being
that the coverage under this Section is the sole coverage on such
property.
This MOC - P is extended to cover fine arts, which are the property of the
Covered Member or the property of others in the custody or control of the
Covered Member while on exhibition or otherwise within the limits of the
Continental United States and Canada.
B. Property Covered
1. Objects of art of every kind and description, the property of the
Covered Member, the property of others and property in which the
Covered Member shall have a fractional ownership interest which are
owned by or have been leased, loaned, rented or otherwise made available
to the Covered Member. "Property" under this ‘Section V – Fine Arts
Floater’ shall mean paintings, drawings, etchings, pictures, prints,
rare books, manuscripts, rugs, tapestries, furniture, statuary, potteries,
porcelains, marbles and all other bonafide works of art and other objects of
rarity, historic value, cultural interest or artistic merit, which are part of the
collections of the Covered Member, or in the care, custody or control of the
Covered Member, and their frames, glazing and shadow boxes.
2. Objects of art, and property incidental thereto, the property of the Covered
Member, or of others for which the Covered Member may be liable and
while such property is on or away from the Covered Member’s
premises in accordance with the terms and conditions of this MOC - P.
C. "Wall to Wall" ("Nail to Nail") Coverage
This MOC - P covers the Covered Member's property on a "Wall to Wall"
("Nail to Nail") basis, or domicile to domicile basis, as applicable, from the
time said property is removed from its normal repository incidental to
shipment until returned thereto or other point designated by the owner or
owner's agent prior to return shipment, including while in transit to or from
points of consolidation or deconsolidation, packing, repacking or unpacking,
while at such locations during such processes or awaiting shipment.
Coverage shall terminate upon arrival of the covered property at the final
destination designated by the owner or owner's agent, or upon expiration of
this MOC - P whichever may occur first, except that expiration of this MOC - P
shall not prejudice coverage of any risk then in transit.
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D. Exclusions
1. 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.
2. Loss or damage caused by or resulting from:
a. hostile or warlike action in time of peace or war, including action in
hindering, combating or defending against an actual, impending or
expected attack:
i. by any government or sovereign power (de jure or de facto), or by
any authority maintaining or using military, naval or air forces, or
ii. by military, naval or air forces, or
iii. by an agent of any such government, power, authority or forces
b. any weapon of war employing atomic fission or radioactive force
whether in time of peace or war.
c. 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.
3. 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.
4. 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 Basis/Valuation
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 insure, shall be covered for and valued at the
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amount agreed upon for each article by the Covered Member and
owner(s) as recorded on the books and records of the Covered Member
prior to loss.
3. Otherwise, in the absence of recorded current fair market values or agreed
values for each article covered, the Authority shall not be liable beyond the
fair market value of the property at the time of any loss or damage
occurs. Said value shall be ascertained by the Covered Member and the
Authority or, if they differ, then the amount of value or loss shall be
determined as provided in the following appraisal clause.
F. Special Conditions
1. Misrepresentation and Fraud: This entire Section shall be void if, whether
before or after a loss, the Covered Member has concealed or
misrepresented any material fact or circumstance concerning this MOC - P
or the subject thereof, or the interest of the Covered Member therein, or in
case of any fraud or false swearing by the Covered Member relating
thereto.
2. Notice of Loss: The Covered Member shall as soon as practicable report
in writing to the Authority or its agent every loss, damage or occurrence
which may give rise to a claim under this Section and shall also file with
the Authority or its agent within sixty (60) days from the date of discovery
of such loss, damage or occurrence, a detailed sworn proof of loss.
3. Examination under Oath: The Covered Member, as often as may be
reasonably required, shall exhibit to any person designated by the
Authority all that remains of any property herein described, and shall
submit, and insofar as is within its power cause its employees, Covered
Members and others to submit to examination under oath by any person
named by the Authority and subscribe the same; and, as often as may be
reasonably required, shall produce for examination all writings, books of
account, bills, invoices and other vouchers, or certified copies thereof if
originals be lost, at such reasonable time and place as may be designated
by the Authority or its representative and shall permit extracts and copies
thereof to be made. No such examination under oath or examination of
books or documents, nor any act of the Covered Member or any of its
employees or representatives in connection with the investigation of any
loss or claim hereunder, shall be deemed a waiver of any defense which
the Covered Member might otherwise have with respect to any loss or
claim, but all such examinations and acts shall be deemed to have been
made or done without prejudice to the Authority's liability.
4. Settlement of Loss: All adjusted claims shall be paid or made good to the
Covered Member within sixty (60) days after presentation and acceptance
of satisfactory proof of interest and loss at the office of the Authority. No
loss shall be paid or made good if the Covered Member has collected the
same from others.
45
5. No Benefit to Bailee: This MOC - P shall in no way inure directly or
indirectly to the benefit of any carrier or other bailee.
6. Subrogation or Loan: If in the event of loss or damage the Covered
Member shall acquire any right of action against any individual, firm or
corporation for loss of, or damage to, property covered hereunder, the
Covered Member will, if requested by the Authority, 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 V. 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.
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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.
14. Other Insurance: Coverage provided by this Section is excess coverage
over any other valid and collectible insurance which may apply to any
objects of art for which coverage would apply under this MOC - P.
15. Pair and Set: In the event of the total loss of any article or articles which
are a part of a set, the Authority agrees to pay the Covered Member the
full amount of the value of such set and the Covered Member agrees to
surrender the remaining article or articles of the set to the Authority.
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VII. MOBILE/CONTRACTORS EQUIPMENT
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:
1. Loss or damage due to wear, tear, rust, corrosion, latent defect,
mechanical breakage, or improper assemblage.
2. Loss or damage due to the weight of the load imposed on the machine
exceeding the capacity for which such machine was designed.
3. 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).
4. Loss or damage due to explosion arising from within steam boilers.
5. 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.
6. Loss or damage due to dishonesty of Covered Member's employees or
persons to whom the Covered Member's property is entrusted.
7. 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.
8. Loss or damage caused by or resulting from:
a. hostile or warlike action in time of peace or, including action in
hindering, combating or defending against an actual, impending or
expected attack
i. by any government or sovereign power (de jure or de facto) or by
any authority maintaining using military, naval or air forces, or
ii. any military, naval or air forces, or
iii. by an agent of any such government, power, authority or forces
b. any weapon of war employing atomic fission or radioactive force
whether in time of peace or war.
c. insurrection, rebellion, revolution, civil war, usurped power, or action
taken by governmental authority in hindering, combating or defending
48
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.
9. 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 peril(s) covered against in this
Section; 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 against by this MOC - P.
Exclusions
1. Automobiles, motorcycles, motor trucks, or parts thereof, unless as
otherwise covered herein.
2. Buildings used as camps or otherwise.
3. Machinery or equipment or building materials to be installed in any building
for the purpose of becoming a part thereof; nor on any property which
has become a permanent part of any structure
4. Property that is located underground.
5. Property while waterborne except while being transported on any regular
ferry.
6. Plans, blue prints, designs or specifications.
Loss Payment Basis/Valuation
Recovery for loss or damage to covered vehicles and contractors’
equipment/unlicensed vehicles on or off premises, the Authority shall not be
liable for more than the cost to repair or replace the same with material of like
kind and quality, except when the repair costs exceed the market value of the
vehicle (as established by a current valuation from “Kelly Blue Book”), in
which case the Schedule Limit shall apply.
Special Condition
This extension covers only within the limits of the United States of America
and Canada.
It is a condition of this MOC - P that all articles covered hereunder are in
sound condition at the time of attachment of this MOC - P.
Definition
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.
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VIII. ACCOUNTS RECEIVABLE
A. Coverage
This MOC - P covers the loss of or damage to the Covered Member's
records of accounts receivable as defined below, occurring during the
period of coverage as a result of direct physical loss or damage as covered
by this MOC - P.
B. Exclusions
This MOC - P does not apply:
A) To loss due to any fraudulent, dishonest or criminal act by the Covered
Member, a partner therein, or an officer, director or trustee thereof, while
working or otherwise and whether acting alone or in collusion with others.
B) To loss due to bookkeeping, accounting or billing errors or omissions.
C) To loss, the proof of which as to factual existence, is dependent upon an
audit of records or an inventory computation; but this shall not preclude
the use of such procedures in support if claim for loss which the Covered
Member can prove through evidence wholly apart therefrom, is due solely
to a risk of loss to records of accounts receivable not otherwise excluded
hereunder.
D) To loss due to 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.
C. Loss Payment Basis/Valuation
Determination of Receivables; Deductions
When there is proof that a loss covered by this Section has occurred, but the
Covered Member cannot accurately establish the total amount of accounts
receivable outstanding as of the date of such loss, such amount shall be
based on the Covered Member’s monthly statements and shall be computed
as follows:
1. Determine the amount of all outstanding accounts receivable at the end of
the same fiscal month in the year immediately preceding the year in which
the loss occurs
2. Calculate the percentage of increase or decrease in the average monthly
total of accounts receivable for the twelve (12) months immediately
preceding the month in which the loss occurs as compared with such
average for the months of the preceding year
3. The amount determined under (1) above, increased or decreased by the
percentage calculated under (2) above, shall be the agreed total amount
of accounts receivable as of the last day of the fiscal month in which said
loss occurs
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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.
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IX. APPEAL OF DISPUTES
No party is entitled to appeal or arbitrate claims under this Memorandum other
than the Member. Any disputes concerning coverage, protection, Defense
obligations, or procedures of the Program, as interpreted by the Authority’s
staff, shall be appealed to the Authority’s Executive Committee in accordance
with the following procedures.
A. A written notice that a Claim is not covered by the Memorandum will normally
be provided to the Member by the Claims Administrator. A Member may
request any determination of a lack of coverage made by the Claims
Administrator to be reviewed by the Chief Executive Officer. Such a request
shall be in writing and must be made within 90 days of the date of the written
notice from the Claims Administrator.
B. Upon request, the Chief Executive Officer shall review a determination of a
lack of coverage made by the Claims Administrator or Authority staff and
shall send to the Member a written determination of coverage.
C. If a Member disagrees with the coverage determination by the Chief
Executive Officer, the Member may appeal the decision to the Appeals
Committee. The Appeals Committee consists of the Executive Committee
and the chairs of the Managers and Finance Officers Committees. Appeals
must be in writing within 90 days of the date of the Chief Executive Officers
written decision. The appeal request must state why the Member disagrees
with the denial, and the Member should present any information that may
have a bearing on the ultimate determination of coverage.
D. The appeal request shall be presented by Authority staff to the Appeals
Committee, on a regularly scheduled Executive Committee meeting day,
allowing time for sufficient review and agenda deadlines. Staff shall notify the
Member in advance of the meeting at which its appeal will be presented.
E. If the Member would like to personally address the Appeals Committee, the
Member or the Member’s representative may attend the meeting and speak
to the issue.
F. The Appeals Committee may refer the appeal to the Coverage Committee
and consider the recommendation of the Coverage Committee during its
deliberation on the appeal. The Appeals Committee’s decision is final.
Authority staff will notify the Member of the Appeals Committee’s decision in
writing.
G. Following a final determination regarding a Claim, consideration of the
decision may be reopened at the request of the Member if circumstances
change as follows: (1) a new and distinct Claim arising out of the prior
Occurrence is presented to the Member; or (2) new and distinct causes of
action are added to the Claim. If the new Claim or causes of action are
reasonably thought by the Member to be covered, the Appeals Committee
will reconsider the issue, in accordance with the procedure in this Section
IX.E. Appeal of Disputes, upon request. Any request for such reconsideration
52
must be in writing within 90 days of the notice to the Member of the new
Claim or cause of action.
H. If the Member has followed the coverage appeals procedure outlined in
Section IX.E. Appeal of Disputes and disagrees with the final determination
of the Appeals Committee, the Member may request consideration of the
coverage issue through the Authority’s Binding Arbitration Process.
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. If 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
53
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 Executive Officer and disclosed
in writing to the appealing Member. A representative of the appealing
Member may be present at the drawing.
I. This process shall be repeated until five members are obtained for the
arbitration panel.
J. The arbitration panel members shall be compensated at the rate of $125 per
half-day or portion thereof. If a panel member is required to stay away from
home overnight, lodging shall be paid by the Authority. Necessary meals
shall be provided for all panel members. Mileage costs shall be reimbursed
by the Authority at its standard rate.
K. The cost of the arbitration panel shall be borne by the Authority. The cost of
presentation by the appealing Member, including preparation, exhibits,
attorneys, and all other costs of the Member shall be paid by the Member.
L. The arbitration panel may request legal counsel that shall be selected by the
Chief Executive Officer and paid for by the Authority. Legal counsel shall not
be the counsel for the Authority that has advised the staff and Executive
Committee. However, counsel for the Authority may participate in or make
the presentation to the arbitration panel on behalf of the Authority, as
requested by the Chief Executive Officer.
M. The parties to the arbitration shall not be governed by formal rules of
evidence.
N. The arbitration panel’s decision shall be final and binding on the Member and
the Authority. Decisions of the arbitration panel shall be by majority vote.
O. The decision of the arbitration panel shall be written and shall govern the
issue decided but may be referred to by the Authority and future arbitration
panels for precedent.
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X. ENDORSEMENTS
A. 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.
1. 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 cover 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 Authority
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 Authority of intent to claim for cost of removal of debris or
cost of clean-up NO LATER THAN TWELVE (12) MONTHS AFTER THE
DATE OF SUCH PHYSICAL LOSS OR DAMAGE.
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2. Civil Authorities Exclusion
Notwithstanding any of the preceding provisions of this endorsement or
any provision of the MOC - P to which this endorsement is attached, this
MOC - P does not cover loss, damage, costs, expenses, fines or penalties
incurred or sustained by or imposed on the Covered Member at the order
of any government agency, court or other civil authorities arising from any
cause whatsoever.
Nothing in this endorsement shall override any radioactive
contamination exclusion clause in the MOC - P to which this
endorsement is attached.
Nothing herein contained shall be held to vary, alter, waive or extend any
of the terms, conditions, or limitations of the MOC - P to which this
endorsement is attached other than as above stated.
B. Property Cyber and Data Endorsement
1. Notwithstanding any provision to the contrary within this MOC - P or any
endorsement thereto this MOC - P excludes any:
a. Cyber Loss, unless subject to the provisions of paragraph 2;
b. loss, damage, liability, claim, cost, expense of whatsoever nature
directly or indirectly caused by, contributed to by, resulting from, arising
out of or in connection with any loss of use, reduction in functionality,
repair, replacement, restoration or reproduction of any Data, including
any amount pertaining to the value of such Data, unless subject to the
provisions of paragraph 3;
regardless of any other cause or event contributing concurrently or in any
other sequence thereto.
2. Subject to all the terms, conditions, limitations and exclusions of this MOC
- P or any endorsement thereto, this MOC - P covers physical loss or
physical damage to property insured under this MOC - P caused by any
ensuing fire or explosion which directly results from a Cyber Incident,
unless that Cyber Incident is caused by, contributed to by, resulting from,
arising out of or in connection with a Cyber Act including, but not limited to,
any action taken in controlling, preventing, suppressing or remediating any
Cyber Act.
3. Subject to all the terms, conditions, limitations and exclusions of this MOC
- P or any endorsement thereto, should Data Processing Media owned or
operated by the Insured suffer physical loss or physical damage insured
by this MOC - P, then this MOC - P will cover the cost to repair or replace
the Data Processing Media itself plus the costs of copying the Data from
back-up or from originals of a previous generation. These costs will not
include research and engineering nor any costs of recreating, gathering or
assembling the Data. If such media is not repaired, replaced or restored
the basis of valuation shall be the cost of the blank Data Processing
Media. However, this MOC - P excludes any amount pertaining to the
56
value of such Data, to the Insured or any other party, even if such Data
cannot be recreated, gathered or assembled.
4. In the event any portion of this endorsement is found to be invalid or
unenforceable, the remainder shall remain in full force and effect.
5. This endorsement supersedes and, if in conflict with any other wording in
the MOC - P or any endorsement thereto having a bearing on Cyber Loss,
Data or Data Processing Media, replaces that wording.
6. Definitions
a. Cyber Loss means any loss, damage, liability, claim, cost or expense
of whatsoever nature directly or indirectly caused by, contributed to by,
resulting from, arising out of or in connection with any Cyber Act or
Cyber Incident including, but not limited to, any action taken in
controlling, preventing, suppressing or remediating any Cyber Act or
Cyber Incident.
b. Cyber Act means an unauthorised, malicious or criminal act or series of
related unauthorised, malicious or criminal acts, regardless of time and
place, or the threat or hoax thereof involving access to, processing of,
use of or operation of any Computer System.
c. Cyber Incident means:
i. any error or omission or series of related errors or omissions
involving access to, processing of, use of or operation of any
Computer System; or
ii. any partial or total unavailability or failure or series of related partial
or total unavailability or failures to access, process, use or operate
any Computer System.
d. Computer System means any computer, hardware, software,
communications system, electronic device (including, but not limited to,
smart phone, laptop, tablet, wearable device), server, cloud or
microcontroller including any similar system or any configuration of the
aforementioned and including any associated input, output, data
storage device, networking equipment or back up facility, owned or
operated by the Insured or any other party.
e. Data means information, facts, concepts, code or any other information
of any kind that is recorded or transmitted in a form to be used,
accessed, processed, transmitted or stored by a Computer System.
f. Data Processing Media means any property insured by this MOC - P
on which Data can be stored but not the Data itself.
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LMA5400 11 November 2019
C. Communicable Disease Endorsement
(For use on property policies)
1. This MOC - P, subject to all applicable terms, conditions and exclusions,
covers losses attributable to direct physical loss or physical damage
occurring during the period of insurance. Consequently and
notwithstanding any other provision of this MOC - P to the contrary, this
MOC - P does not insure any loss, damage, claim, cost, expense or other
sum, directly or indirectly arising out of, attributable to, or occurring
concurrently or in any sequence with a Communicable Disease or the fear
or threat (whether actual or perceived) of a Communicable Disease.
2. For the purposes of this endorsement, loss, damage, claim, cost, expense
or other sum, includes, but is not limited to, any cost to clean-up, detoxify,
remove, monitor or test:
a. for a Communicable Disease, or
b. any property insured hereunder that is affected by such Communicable
Disease.
3. As used herein, a Communicable Disease means any disease which can
be transmitted by means of any substance or agent from any organism to
another organism where:
a. the substance or agent includes, but is not limited to, a virus,
bacterium, parasite or other organism or any variation thereof, whether
deemed living or not, and
b. the method of transmission, whether direct or indirect, includes but is
not limited to, airborne transmission, bodily fluid transmission,
transmission from or to any surface or object, solid, liquid or gas or
between organisms, and
c. the disease, substance or agent can cause or threaten damage to
human health or human welfare or can cause or threaten damage to,
deterioration of, loss of value of, marketability of or loss of use of
property insured hereunder.
4. This endorsement applies to all coverage extensions, additional
coverages, exceptions to any exclusion and other coverage grant(s).
All other terms, conditions and exclusions of the MOC - P remain the same.
LMA5393 25 March 2020
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XI. COVERAGE PART B - TERRORISM
A. Limits of Liability
$100,000,000 Per occurrence and in the annual aggregate as respects
Acts of Terrorism and Sabotage
B. 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
C. Deductible
Each occurrence shall be adjusted separately and from each such amount the
sum stated below shall be deducted:
$10,000 any one occurrence.
24-Hour waiting period in respect of Off Premises Services Business
Interruption.
D. Coverage Clause
Subject to the definitions, exclusions, limits and conditions contained in this
Coverage Part B, the Authority agree to indemnify the Covered Member in
respect of direct physical loss or physical damage to the covered property
described in the MOC - P Section A, while located at the premises or
contained within the territory described in the MOC - P Coverage Part A,
occurring during the period of coverage and caused by an Act of Terrorism, as
herein defined.
E. Application of Memorandum of Property Coverage Provisions
Coverage Part B is subject to the same warranties, terms and conditions
(except as regards the premium, the amount and Limits of Liability (including
any reinstatement provisions) other than the deductible or self-insurance
provision where applicable, and the renewal agreement, if any, AND EXCEPT
AS OTHERWISE PROVIDED HEREIN) as are contained in or as may be
added to MOC - P Section A prior to the happening of a loss for which claim is
made hereunder and should any alteration be made in the premium for the
MOC - P Coverage Part A, then the premium hereon may be adjusted
accordingly.
F. Maintenance of the Memorandum Of Property Coverage
It is a condition precedent to recovery under this Coverage Part B that the
coverage provided in this MOC - P Coverage Part A shall be maintained in full
force and effect during the period of coverage.
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In the event of the MOC - P Coverage Part A being cancelled by the Covered
Member, or the Authority, this coverage in Coverage Part B shall also automatically
terminate on such date of such cancellation.
G. Definitions
1. 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.
2. 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.
3. Act of Sabotage, for the purpose of this Coverage Part B, 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.
H. Exclusions
1. 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.
3. 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
60
value of its property, nor for loss or damage arising from acts of
contraband or illegal transportation or illegal trade.
5. Loss or damage directly or indirectly arising from or in consequence of the
seepage and/or discharge of pollutants or contaminants, which pollutants
and contaminants shall include but not be limited to any solid, liquid,
gaseous or thermal irritant, contaminant or toxic or hazardous substance
or any substance the presence, existence or release of which endangers
or threatens to endanger the health, safety or welfare of persons or the
environment.
6. Loss or damage arising directly or indirectly from or in consequence of
chemical or biological emission, release, discharge, dispersal or escape or
chemical or biological exposure of any kind.
7. Loss or damage by electronic means including but not limited to computer
hacking or the introduction of any form of computer virus or corrupting or
unauthorized instructions or code or the use of any electromagnetic
weapon.
This exclusion shall not operate to exclude losses (which would otherwise
be covered under this MOC - P Section A) arising from the use of any
computer, computer system or computer software program or any other
electronic system in the launch and/or guidance system and/or firing
mechanism of any weapon or missile.
8. Loss or damage caused by vandals or other persons acting maliciously or
by way of protest or strikes, labor unrest, riots or civil commotion unless
damage is caused directly by an Act of Terrorism.
9. Loss or increased cost as a result of threat or hoax.
10. Loss, damage, to an unmanned aerial vehicle (aka: drone) while in
operation.
I. Property Not Covered
As respects the peril(s) covered in this Coverage Part B, this MOC - P does
not cover physical loss or physical damage to:
1. Land or land values except landscaping including natural athletic fields,
sand traps, tees and greens which are excluded excess of the sublimits in
the Program Limits of Liability shown in the Declarations attached to this
MOC - P.
2. Power transmission, feeder lines or pipelines not on the Covered
Member’s premises.
3. Watercraft, unless scheduled and under 26 feet in length.
4. Aircraft except small unmanned aircraft meaning, a device that is used or
intended to be used for flight in the air without the possibility of direct
61
human intervention from within or on the aircraft and weighing less than 55
pounds on takeoff, including everything that is on board or otherwise
attached to the aircraft and such coverage is provided only while not in
operation.
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.
J. 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
K. 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.
L. Automatic Coverage/Reporting Conditions
All as per the MOC - P Coverage Part A except in Restricted Areas, as stated
above.