HomeMy WebLinkAboutWest Covina Police Department; 2025-02-21; USE25-3637FAC USE25-3637FAC
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AGREEMENT FOR USE OF THE CARLSBAD SAFETY TRAINING CENTER (STC)
BETWEEN
THE CITY OF CARLSBAD AND WEST COVINA POLICE DEPARTMENT
1. PARTIES AND DATE
This Agreement for use of the Carlsbad Safety Training Center (STC) (“Agreement”) is entered
into this ________ day of __________________, 2025, by and between the City of Carlsbad, a municipal
corporation organized under the laws of the State of California with its relevant place of business at
5750 Orion Street, Carlsbad, California 92010 (“City”), and West Covina Police Department with its
principal place of business at 1444 West Garvey Avenue, West Covina, California 91790 (“Agency”). City
and Agency are sometimes individually referred to as “Party” and collectively as “Parties” in this
Agreement.
2. RECITALS
2.1 Agency desires to use certain City facilities located at 5750 Orion Street in the City of
Carlsbad, California, known as the Carlsbad Safety Training Center (“STC Facilities”); and
2.2 Agency desires to use the STC Facilities for the purposes of Firearms Training and other
Law Enforcement Training Activities on or about February 1, 2025 (“Training Events”).
2.3 City is willing to allow the Agency to use the STC Facilities pursuant to the terms and
conditions in this Agreement.
3. TERMS AND CONDITIONS
3.1 STC Facilities. City agrees to allow Agency to use the STC Facilities pursuant to this
Agreement including the conditions, requirements, and fees as described in Exhibit “A”, Exhibit “B”,
Exhibit “C”, and applicable STC Standard Operating Procedures (“SOP”), as may be amended from time
to time by the City at its sole and absolute discretion, all as incorporated herein by this reference. The
STC Facilities are subject to the needs of the City and as such the Agency’s use of STC Facilities may be
cancelled by the City at any time. In the event City determines, in its sole and absolute discretion, that
the STC Facilities are needed for any City purposes, the Agency shall immediately vacate the STC
Facilities upon notice by the City. It will also be understood that the STC Facilities will be made available
on an “as is” basis.
3.2 Training Events. Agency represents and warrants that all attendees, participants,
students, observers, instructors and any other persons brought to the STC Facilities by the Agency
(“Agency Invitees”) are qualified to participate in the Training Events, and use of the STC Facilities. The
City retains the discretion to terminate this Agreement and requires all Agency Invitees to immediately
vacate the STC Facilities if the Training Events or anyone’s participation in the Training Events poses any
kind of threat or liability to the City, the public, Agency Invitees or anyone else. Agency Invitees shall not
be considered an employee or agent of City for any purpose related to the Training Events.
3.3 Release of Liability / Assumption of Risk. In consideration of the City’s Agreement to
allow the Agency to use the STC Facilities, the Agency, on behalf of itself and its elected officials
(appointed and elected), officers, employees, contractors, agents, volunteers, students, and all Agency
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Invitees hereby releases and forever discharges the City and each of its elected officials (appointed and
elected), officers, employees, contractors, agents, and volunteers from any and all known and unknown,
certain or contingent, past, present or future obligations, liabilities, demands, claims, costs, expenses,
debts, controversies, damages, actions, and causes of action of every nature, character, or description
which they may have against the City, arising from or in any way related to the Training Events, use of
STC Facilities or this Agreement. Furthermore, Agency assumes all risks associated with using the STC
Facilities for the Agency’s purposes, including but not limited to inspections of the facility prior to and
after use, determination that the facilities “as is” status is appropriate for the Agency’s Training Events,
supervision and control of all Agency Invitees involved in the Agency’s use of the STC Facilities including
Agency Invitees, members of the general public and anyone else exposed during the period of time the
Agency is using the STC Facilities.
AGENCY HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 (“SECTION 1542”), WHICH IS
SET FORTH BELOW:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR
RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT
THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR
RELEASED PARTY.”
BY SIGNNING BELOW, AGENCY HEREBY WAIVES THE PROVISIONS OF SECTION 1542 IN
CONNECTION WITH THE RELEASED MATTERS.
_____________________________
Signature of Agency Representative
_____Sergeant Chastin Tedesco____
Printed Name of Agency Representative
3.4 Indemnification / Hold Harmless. Agency shall indemnify, defend and hold harmless
City, its elected officials (appointed and elected), officers, employees, contractors, agents, and
volunteers (“Indemnified Parties”) from and against any and all claims, damages, demands, liability,
costs, losses and expenses, including, without limitation, court costs and reasonable attorneys’ fees and
costs, arising out of, in connection with or in any way related to Agency’s actions or inactions related to
this Agreement, including without limitation any actions or inactions related to use of STC Facilities or
the Training Events, to the fullest extent permitted by law.
3.5 Assumption of Risk Agreement and Participant Release. Agency shall ensure that all
Agency Invitees observing or participating in the Training Events sign and execute a release, substantially
in the same form as set forth in the attached Exhibit “B”, incorporated by this reference (“Participant
Release”). No one shall attend or participate in the Event or use the STC Facilities without signing and
executing a Participant Release also commonly known as a Hold Harmless Agreement.
3.6 Insurance. Agency shall, at its sole expense, procure and maintain for the duration of its
obligations under this Agreement insurance against claims for injuries to persons or damages to
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property which may arise from or be in connection with the STC Facilities and the Training Events or
activities conducted by the Agency, its elected officials, officers, employees, contractors, agents,
volunteers, students, and Agency Invitees. The insurance shall take the form of a commercial general
liability policy or approved self-funding agreement, to include bodily injury, personal injury, and
property damage coverage, written on an occurrence basis with a company reasonably acceptable to
the City, in an amount not less than Two Million Dollars ($2,000,000) to cover any activities performed
by any person under the permission granted herein and any damage or loss suffered or incurred by the
City, its elected officials, officers, employees, contractors, agents, and volunteers resulting from such
activity. The insurance will be obtained from an insurance carrier admitted and authorized to do
business in the State of California. The insurance carrier is required to have a current Best's Key Rating
of not less than "A-:VII" OR with a surplus line insurer on the State of California’s List of Eligible Surplus
Line Insurers (LESLI) with a rating in the latest Best’s Key Rating Guide of at least “A:X”. Agency shall
maintain Workers Compensation coverage in the statutorily required amounts, if applicable. Agency
shall require its insurer to waive all rights of subrogation against City, its elected officials, officers,
employees, contractors, agents, and volunteers, except for any liability resulting from the willful
misconduct or grossly negligent acts of City. The Agency will provide evidence of such insurance
coverage to City’s satisfaction prior to initiating the Training Events. The Agency shall cause all such
policies to be endorsed to add the City, its elected officials, officers, employees, contractors, agents, and
volunteers as Additional Insured’s. Agency’s self-funded programs will be required to provide evidence
that meets City’s requirements as determined at the sole and absolute discretion of the City.
3.7 Governmental Approvals. Agency shall or has obtained all necessary and applicable
federal, state and local approvals, certifications, and permits to conduct the Training Events prior to use
of STC Facilities. City reserves the right to require Agency to provide proof regarding these approvals,
certifications, and permits, if applicable.
3.8 Scheduling of Facility / Cancellations. Agency may schedule use of the City’s Facilities on
an “as available”, “first come first served” basis by contacting the City’s Facility Manager. In the event
Agency is unable to use its allotted time(s), it shall, contact the City’s Facility Manager within ten (10)
business days. Agency will be invoiced for hours scheduled not actual hours used if sufficient notice for
cancellation is not provided.
3.9 Term of Agreement. The term of this Agreement shall commence upon execution of this
Agreement by City, and shall terminate five (5) years from the date of commencement. It is also
understood that the City may terminate this Agreement at any time for any or no reason.
3.10 Payments for Use of STC Facilities. City shall invoice Agency on an hourly fee based upon
Agency scheduling and use of STC Facilities. All STC Facility use fees shall be in accordance with the STC
Facility fee table which may be amended by the City from time to time. Agency shall remit payment in
full to the attention of City of Carlsbad, 1635 Faraday Avenue, Carlsbad, CA 92008, within thirty days
(30) days of receipt of such invoice. A late charge equivalent to 5% of the unpaid balance shall be
assessed on all accounts ten (10) or more days past due. Agency shall be liable for the payment at the
full cost of the use of the STC Facilities for the hours scheduled for Training Events whether or not
Agency subsequently uses the STC Facilities or not.
3.11 Accidents / Damage Investigations. The Agency Safety Officer, as such person is
described in the STC Facilities Standard Operating Procedures (SOP), shall immediately report any injury
or non-injury accidents, equipment damage and/or negligent firearm discharges immediately to the City
Facility Manager. The Parties agree to fully and promptly cooperate in the investigations of injury or
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non-injury accidents, equipment damage and/or negligent firearm discharges arising from Agency’s use
of the STC Facilities. The City’s Facility Manager will coordinate such investigations for the purpose of
determining cause, responsibility and any physical or operational modifications or improvements
deemed necessary to improve facility safety. In the event damage to the STC Facility requires repair
and/or replacement, City shall affect such repair and present to the Agency an invoice for the cost of the
repairs/replacement plus 5% (five percent) for City administrative costs. Agency shall remit payment in
full to the attention of City of Carlsbad, 1635 Faraday Avenue, Carlsbad, CA 92008, within thirty days
(30) days of receipt of such invoice. A late charge equivalent to 5% of the unpaid balance shall be
assessed on all accounts ten (10) or more days past due.
3.12 Facility Inspections / Cleanup. The Parties will conduct a joint inspection of STC Facilities
before and after use. All damages will be annotated on inspection sheets provided by the City’s Facility
Manager to Agency. Agency shall be responsible for general cleanup of the STC Facilities following its
use of the same. For purposes of this Agreement, “cleanup” for STC Facilities will be described in further
detail in the STC Facilities SOP.
3.13 Notices. Except as otherwise expressly provided by law, any and all notices or other
communications required or permitted by this Agreement to be served on or given to either Party to this
Agreement shall be in writing and shall be deemed duly served or given when personally delivered to
the Party to whom it is directed or to any managing or executive officer or director of that Party in lieu
of personal service when deposited in the United States mail, first class postage prepaid, addressed as
follows:
If to Agency:
Attn: Sergeant Chastin Tedesco
Special Problems Detail
West Covina Police Dept.
1444 West Garvey Avenue
West Covina, CA 91760
If to City:
City of Carlsbad
1635 Faraday Avenue
Carlsbad, CA 92008
Attn:
Contract Administration
With copy to:
Office of the City Attorney
1200 Carlsbad Village Drive
Carlsbad, CA 92008
3.14 Survival. Agency’s obligations to release, indemnify, defend, and hold harmless the
Indemnified Parties as set forth in Section 3.4, shall survive expiration or termination of the term of this
Agreement and shall remain in effect until there is no risk to the City of any liability for any claims or
losses due to the use of the STC Facilities for the Training Events.
3.15 Interpretation. The provisions of this Agreement are intended by the Parties to be
interpreted and construed to provide the fullest protection possible under the law to the City.
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3.16 Selection of Counsel. Agency’s obligation to indemnify the Indemnified Parties under
this Agreement shall include the obligation of the Agency to defend the City with legal counsel of City’s
own choosing. In the event City elects not to select such counsel, the designation of such counsel shall
be made by the Agency but shall be subject to prior approval by City.
3.17 Entire Agreement. This written document contains the entire agreement of the Parties
and supersedes any prior oral or written statements or agreements between the Parties. No
supplement, modification, or amendment of this Agreement shall be binding unless executed in writing
by the Parties.
3.18 Waiver and Severability. No waiver of any default shall constitute a waiver of any other
breach or default, whether of the same or of any other covenant or condition. No waiver, benefit,
privilege or service voluntarily given or performed by either Party shall give the other party any
contractual right by custom, estoppel or otherwise. If any provision of this Agreement is invalid or
unenforceable with respect to any Party, the remainder of this Agreement or the application of such
provision to persons other than those as to whom it is held invalid or unenforceable, shall not be
affected and each provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
3.19 Counterparts. This Agreement may be signed in counterparts, each of which shall
constitute an original and which collectively shall constitute one instrument.
3.20 Authority; Binding on Successors and Assigns. Each Party warrants that the individuals
who have signed this Agreement have the legal power, right, and authority to enter into this Agreement
and bind each respective Party. This Agreement shall be binding on and inure to the benefit of the
successors and permitted assignees of the respective Parties. Notwithstanding the foregoing, this
Agreement may not be assigned by Agency unless City consents in writing to such assignment.
3.21 Governing Law and Venue. This Agreement shall be governed by the laws of the State of
California. Any action to interpret or enforce this Agreement shall be brought and maintained
exclusively in the courts of and for San Diego County, California.
4. AUTHORITY
The individuals executing this Agreement and the instruments referenced in it, on behalf of Agency,
each represent and warrant that they have the legal power, right and actual authority to bind Agency to
the terms and conditions of this Agreement.
[signatures on the following page]
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CITY OF CARLSBAD
By: _____________________________
Geoff Patnoe, City Manager
Attest: __________________________
for Sherry Freisinger, City Clerk
If required by City, proper notarial acknowledgment of execution by Agency must be attached. If a corporation,
Agreement must be signed by one corporate officer from each of the following two groups:
Group A Group B
Chairman, Secretary,
President, or Assistant Secretary,
Vice-President CFO, or Assistant Treasurer
AGENCY
By: _________________________
Signature
Chastin Tedesco____________
Name (Print)
Sergeant__________________
Title (Print)
By: _________________________
Signature
_________________________
Name (Print)
_________________________
Title (Print)
APPROVED AS TO FORM:
CINDIE K. McMAHON, City Attorney
By:
Assistant City Attorney
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EXHIBIT “A”
SAFETY TRAINING CENTER FACILITY DESCRIPTION,
CAPABILITIES AND LOCATION
1. The Carlsbad Safety Training Center (STC) is a four-acre facility that provides training resources
which can replicate emergency scenarios and high-risk training events that Joint First
Responders may encounter when conducting public safety operations. The STC Facilities are
predominantly used by firefighting and law enforcement agencies to maintain and enhance their
First Responder capabilities and to increase the readiness of internal public safety networks. The
training conducted at this facility is crucial to building a rapid and capable First Responder
Agency that can respond to emergencies within the City of Carlsbad and outlying cities.
2. The STC Facilities consists of a primary training building which houses two indoor shooting
ranges (25 yards and 100 yards), multiple storage areas, and three classrooms with audio visual
systems, and a training room for computer generated training scenarios. The outside areas of
the facility consist of a residential live fire burn prop, four story commercial tower with multiple
live fire burn props, confined space training area, trench extrication area, vehicle extrication
area, city streetscape, emergency vehicle training area (grinder), parking, and various
equipment storage areas that house City of Carlsbad Police and Fire related equipment.
3. General Location Information:
a. The STC is located at 5750 Orion Street, Carlsbad, CA 92010.
b. U.S. Geological Survey (USGS) Information:
-Map Sheet: San Luis Rey Quadrangle, California-San Diego (7.5 Minute Series)
-Latitude and Longitude: N 33° 8’ 16.106” W 117° 16’ 0.397”
-Grid Reference System (10-digit/WGS-84 Datum): 11S MS 75118 66596
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EXHIBIT “B”
PARTICIPANT RELEASE
(HOLD HARMLESS CERTIFICATION)
I, _____________________________________ (print name), have voluntarily requested that
the City of Carlsbad (“City”) allow me to use or observe the use of the facilities at the Carlsbad Safety
Training Center and/or the various safety training apparatus located at 5750 Orion Street, Carlsbad,
California, 92010, known as the Carlsbad Safety Training Center (“STC Facilities”), for the purposes of
Firearms Training and other Law Enforcement Training Activities on or about __________________
(“Training Events”). I hereby acknowledge, understand and agree that the City is allowing the use of said
STC Facilities for my sole benefit. I also acknowledge, understand and agree that by using STC Facilities I
may be exposed to risks of damage to my person or property, including, but not limited to, personal
property damage, personal bodily injury, mental or psychological effects, gunshot wounds, small
explosions, strikes from bullet fragments and shell casings, falls from high structures, trip and snag
hazards, falls on wet surfaces, lead contamination, falling debris, motor vehicle accidents, and/or other
known and unknown hazards that may result in serious bodily injury or death. I understand,
acknowledge and agree that such serious bodily injury or death may be caused, either directly or
indirectly, in whole or in part, by the fact that I am present upon the STC Facilities site whether or not I
may be participating in or observing a Training Event.
I HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE that I am fully aware of the risks and
hazards inherent in using or observing the use of STC Facilities or participating in a Training Events, and I
hereby accept and assume full responsibility for any and all risks of damage, injury, effects or death
resulting to me or my property while using or observing the use of the STC Facilities, or participating in a
Training Event, or resulting from the use or condition of STC Facilities, whether or not using STC
Facilities, and whether or not the risks are known or unknown to me or to City. ______ (Initial)
I HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE, in consideration for the City allowing me
to use or observe the use of STC Facilities or to participate in the Training Events, that I, my personal
representatives, heirs, next-of-kin and assigns (collectively the “Releasors”) hereby release, waive,
discharge, and covenant not to sue or bring any claim or demand, whether administrative, judicial or
otherwise, against the City and its elected officials (appointed and elected), officers, employees,
contractors, agents, and volunteers for any and all liability from and for any loss or damage to me or the
other Releasors, and from and for any claims or demands therefor on account of injury to the person or
property of me or the other Releasors, including, but not limited to, personal property damage, personal
bodily injury, mental or psychological effects, or death, whether caused by the negligence or willful
misconduct of me, the City, other participants in the Training Events, or anyone else while I participate
in the Training Events, or the condition of STC Facilities and whether or not using STC Facilities, and
whether or not the risks are known or unknown to me or the City. ______ (Initial)
I HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE to release on my behalf and on behalf of
the Releasors any and all unknown claims. I understand and agree that the released claims include not
only claims presently known to me and/or the Releasors, but also include all known and unknown,
suspected and unsuspected, claims, rights, demands, actions, obligations, liabilities, and causes of action
of every kind and character that would otherwise come within the scope of the claims released herein. I
understand that I and/or the Releasors may hereafter discover facts different from what I/they now
believe to be true, which if known, could have materially affected the terms of this release, waiver,
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indemnity and hold harmless certification, but we (the Releasors and I) nevertheless waive and
relinquish any claims or rights based on such different or additional facts. With respect to the released
claims, I knowingly and voluntarily waive and relinquish any and all rights or benefits that I and/or the
Releasors may now have, or in the future may have, under the terms of Section 1542 of the California
Civil Code, which provides as follows:
“A general release does not extend to claims which the creditor or
releasing party does not know or suspect to exist in his or her favor at
the time of executing the release and that, if known by him or her,
would have materially affected his or her settlement with the debtor or
released party.”
______ (Initial)
I HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE to defend, indemnify, save and hold free
and harmless the City and its elected officials, officers, employees, contractors, agents, and volunteers
from any and all liability from loss, damage, cost or injury, including death, to any property or persons,
including third parties, in any manner arising out of or incident to any acts, omissions or willful
misconduct of me while I participate in the Training Events, whether while using STC Facilities, including
without limitation the payment of attorneys’ fees and costs (with attorneys of City’s choosing, in its sole
and absolute discretion). Further, I shall defend at my own expense, including attorneys’ fees and costs
(with attorneys of City’s choosing, in its sole and absolute discretion), the City and its elected officials,
officers, employees, contractors, agents, and volunteers in any action or proceeding, legal,
administrative or otherwise, based upon such acts, omissions or willful misconduct. ______ (Initial)
I HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE that this release, waiver, indemnity and
hold harmless certification is intended to be as broad and inclusive as is permitted by the laws of the
State of California, and that if any portion thereof is held invalid, it is agreed that the balance shall,
notwithstanding, continue in full legal force and effect. ______ (Initial)
I HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE that I have read, understand, and
voluntarily sign this release, waiver, indemnity and hold harmless certification and have had the
opportunity to review this certification with legal counsel, and I agree that no oral representations,
statements or inducements apart from the foregoing written certification have been made, and I further
agree this certification shall be binding on me and my personal representatives, heirs, assigns and next-
of-kin. ______ (Initial)
I HEREBY ACKNOWLEDGE, UNDERSTAND AND AGREE that I am age 18 or older, and that I will
strictly abide by all safety requirements and other instructions given to me by any and all City personnel
and/or agency instructors at all times during my presence on the STC site and during my participation in
any Training Events or use of STC Facilities. ______ (Initial)
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I HAVE CAREFULLY READ, UNDERSTAND, ACKNOWLEDGE AND AGREE TO THIS RELEASE,
WAIVER, INDEMNITY AND HOLD HARMLESS CERTIFICATION. I UNDERSTAND THAT I AM GIVING UP
VALUABLE LEGAL RIGHTS BY SIGNING THIS RELEASE, WAIVER, INDEMNITY AND HOLD HARMLESS
CERTIFICATION. I HAVE AGREED TO SIGN THIS CERTIFICATION OF MY OWN FREE WILL. I UNDERSTAND
THAT I MAY SEEK THE ADVICE OF AN ATTORNEY IN ANY MATTER CONNECTED WITH THIS RELEASE,
WAIVER, INDEMNITY AND HOLD HARMLESS CERTIFICATION BEFORE SIGNING.
PARTICIPANT SIGNATURE:
By: _______________________________
Signature
_______________________________
Printed Name
_______________________________
Date
_______________________________
Agency/Company Name
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EXHIBIT “C”
Fiscal Year 2024–2025
Safety Training Center Facility Use Fees
One Shooting Range full day $ 1,395.00
One Shooting Range 1/2 day $ 698.00
Two Shooting Ranges full day $ 1,567.00
Two Shooting Ranges 1/2 day $ 819.00
Classroom full day $ 662.00
Classroom 1/2 day $ 379.00
Confined Space Prop full day $ 733.00
Confined Space Prop 1/2 day $ 366.00
Grinder full day $ 525.00
Grinder 1/2 day $ 306.00
Grinder/Commercial Prop (No Fire Ops) full day $ 759.00
Grinder/Commercial Prop (No Fire Ops) 1/2 day $ 379.00
Grinder/Residential Prop (No Fire Ops) full day $ 759.00
Grinder/Residential Prop (No Fire Ops) 1/2 day $ 379.00
PriSim (Training Simulator) full day $ 552.00
PriSim (Training Simulator) 1/2 day $ 276.00
Pump Draft Pit full day $ 442.00
Pump Draft Pit 1/2 day $ 221.00
Streetscape full day $ 185.00
Streetscape 1/2 day $ 135.00
Shooting Range ‐ Hourly hourly $ 141.00
*Fees are subject to change by City Council adopted resolutions
**Fees effective Sept. 1, 2024
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CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
CERTIFICATE OF LIABILITY PROTECTION
In accordance with the provisions of Article 11(a) of the Joint Powers Agreement creating the
CALIFORNIA JOINT POWERS INSURANCE AUTHORITY,
the Executive Committee has designated a Joint Liability Protection Program for the Members.
City of West Covina
including its governing body, along with all its commissions, agencies and employees thereof, is
protected in accordance with the terms and provisions of the CALIFORNIA JPIA Liability Protection Program.
This Certificate is evidence of the Member's participation in the Excess Liability Protection Program
during the period of July 1, 2024 to July 1, 2025.
The CALIFORNIA JOINT POWERS INSURANCE AUTHORITY will investigate, defend and/or pay
all claims, settlements and final judgments which come within the provisions of the
CALIFORNIA JPIA Memorandum of Coverage of the Liability Protection Program as defined therein.
CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
Alexander Smith, Chief Executive Officer
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CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
CERTIFICATE OF
WORKERS' COMPENSATION PROTECTION
CALIFORNIA JOINT POWERS INSURANCE AUTHORITY has complied with
the requirements of the Director of Industrial Relations under the provisions of Section 3700
of the Labor Code of the State of California. The employees, governing body, and other
legally authorized or appointed committees or commissions of
City of West Covina
are covered in accordance with California Labor Law and the provisions of the California JPIA
Memorandum of Coverage of the Workers' Compensation Program. This Certificate is evidence of
the Member's participation in the Excess Workers' Compensation Program for the period of
July 1, 2024 to July 1, 2025.
CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
Alexander Smith, Chief Executive Officer
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MEMORANDUM OF COVERAGE
LIABILITY PROGRAM
EFFECTIVE JULY 1, 2024–JULY 1, 2025
Issued to the City of West Covina
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MEMORANDUM OF COVERAGE: LIABILITY PROGRAM
July 1, 2024–July 1, 2025
MEMORANDUM OF COVERAGE
LIABILITY PROGRAM
ADMINISTERED BY THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
MEMBER: City of West Covina
MAILING ADDRESS: 1444 West Garvey Avenue South West Covina, CA 91790
PROTECTION LIMITS: Primary layer: $30,000,000
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 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 liability are administered by the Authority and shared by its Members. This 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
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TABLE OF CONTENTS
I. INTRODUCTION ________________________________________________________ 1
II. PROTECTION PROVIDED ________________________________________________ 1
A. Payments on Behalf of Protected Parties ___________________________________ 1
B. Defense and Settlement ________________________________________________ 2
C. Protection Limit _______________________________________________________ 3
D. Statutory Limitations ___________________________________________________ 4
E. Territorial Limitation ____________________________________________________ 4
F. Chief Executive Separation Payment ______________________________________ 4
III. DEFINITIONS ___________________________________________________________ 5
IV. EXCLUSIONS _________________________________________________________ 15
V. CONDITIONS AND RESPONSIBILITIES _____________________________________ 24
A. Inspection and Audit __________________________________________________ 24
B. Severability of Interest _________________________________________________ 24
C. Protected Party’s Duties in the Event of Occurrence or Claim __________________ 24
D. Other Protection _____________________________________________________ 25
E. Termination or Amendment _____________________________________________ 26
F. Changes to Memorandum ______________________________________________ 26
G. Subrogation and Recovery _____________________________________________ 26
H. Assignment _________________________________________________________ 27
I. Joint Powers Agreement _______________________________________________ 27
J. Appeal of Disputes ___________________________________________________ 27
K. Arbitration __________________________________________________________ 29
L. Limitation of Liability __________________________________________________ 31
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I. INTRODUCTION
This Memorandum of Coverage (hereinafter Memorandum) is a description of the terms and conditions of the Liability Program (hereinafter Program) through which certain self-
insured risks of liability are administered by the California Joint Powers Insurance Authority (hereinafter Authority) and shared by its Members pursuant to the Joint Powers Agreement creating the Authority under the provisions of Section 6500 et seq. of the Government Code.
As provided in Section 990.8 of the Government Code, pooling of losses in this Program is
not insurance. The sole duty of the Authority is to administer the Program adopted by the Members. The Authority can indemnify only Claims or losses, which are pooled under the terms of this Memorandum and the Joint Powers Agreement. There is no transfer of risk from the Member or any Protected Party to the Authority nor assumption of risk by the Authority.
The provisions of the Program are subject to and subordinated to the Joint Powers
Agreement or any action taken by the Executive Committee or the Board of Directors in connection with the Program. This Program has been adopted pursuant to action taken by the Executive Committee, and is subject to any amendment, modification or extension by the Executive Committee or the Board of Directors.
The terms of this Memorandum shall be construed in an evenhanded fashion in accordance
with the principles of California contract law. If the language of this Memorandum is alleged to be ambiguous or unclear, the issue of how the protection should apply shall be resolved in a manner most consistent with the relevant terms of this Memorandum without regard to authorship of the language and without any presumption of arbitrary interpretation or
construction in favor of either the Protected Party or the Authority. Any controversy or
dispute arising out of or related to an interpretation or breach of this Memorandum shall be settled in accordance with the appeals procedures as set forth in this Memorandum.
Throughout this Memorandum, words and phrases that appear in bold print are defined in Section III. DEFINITIONS.
II. PROTECTION PROVIDED
A. Payments on Behalf of Protected Parties – Excess Liability Program – please see Endorsement
Subject to all provisions of this Memorandum, the Authority will cause the Program to pay on behalf of the Protected Party all sums that the Protected Party shall become legally
obligated to pay as Damages by reason of Tort Liability imposed by law, or the Tort Liability of others assumed in a Protected Contract, because of:
1. Bodily Injury or Property Damage, including Automobile Liability
2. Personal Injury;
3. Public Officials Errors and Omissions;
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4. Broadcast/Publication Injury;
5. Employment Practices Injury; or
6. Employee Benefit Administration Liability
caused by an Occurrence during the Protection Period, to which this Memorandum
applies.
Coverage provided under this Memorandum is funded through Member contributions for a pooled layer of coverage, and backed by reinsurance purchased by the Authority on behalf of its Members for higher layers of coverage, per Government Code section 990.8(d). In the
event of failure by the reinsurer to pay or reimburse for Damages or Defense Costs within
the reinsured layer of coverage, due to insolvency, the maximum Protection Limit will be not more than the pooled layer of coverage, provided that this limitation shall not relieve any reinsurer of its obligations under its reinsurance agreement, and shall not relieve the Authority of its coverage obligations if reinsurance coverage is established and is
collectible. In the event of a failure by the reinsurer to pay or reimburse for Damages or Defense Costs within the reinsured layer of coverage, due to the application of an exclusion in the reinsurance agreement, no coverage shall apply under this Memorandum within that layer.
B. Defense and Settlement – Excess Liability Program – please see Endorsement
The Authority, at the shared expense of its Members, and out of funds of the Program
deposited or obligated to be deposited by its Members, shall investigate, negotiate, settle, or Defend, at the Authority’s sole discretion, any Claim which has been tendered to the Authority and which in the sole opinion of the Authority is encompassed by this Program. The Authority shall control selection of defense counsel. Defense Costs incurred by the
Protected Party prior to the tender of the Claim, as required by Section V. CONDITIONS AND RESPONSIBILITIES, to the Authority are the sole obligation of the Protected Party. The date of the tender of the Claim shall be the date written notice of said Claim is received at the Authority’s offices (or it’s designated Claims Administrator).
The obligation of the Authority as described above shall cease to apply after the Protection
Limit has been exhausted by any combination of payments hereunder for judgments,
settlements, or Defense Costs, or if the Authority tenders the Protection Limit on behalf of any Protected Party. For purposes of excess insurance or reinsurance, any Defense Costs incurred prior to the tender of the Protection Limit shall be deducted from the Protection Limit that is tendered.
With respect to any Claim or part thereof which has been tendered to the Authority and
over which the Authority assumes full or partial responsibility or charge of the settlement or Defense, the Authority shall, if applicable, cause the Program to pay:
1. All expenses incurred by the Authority on behalf of a Protected Party;
2. Costs taxed against a Protected Party in the Claim; and
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3. Other reasonable expenses incurred by a Protected Party at the Authority’s request to assist the Authority in the investigation or Defense of the Claim; but this shall not include the office expenses of
the Protected Party, the salaries of Employees or officials of the Protected Party, nor expenses of any claims administrator engaged by the Protected Party.
With respect to a Claim for which the Authority has determined that only a portion is encompassed by this Program, the Authority shall cause the Program to fund any
Defense to the Claim against the Member and any settlement or final judgment of that Claim, subject to the reservation by the Authority of the right to recover from the Member any amounts paid by the Authority for such settlement or final judgment which are paid to claimants for Claims, or portions thereof, not encompassed by the Program.
With respect to a Claim for which the Authority has determined that no portion is
encompassed by this Program, the Claim shall be referred, in its entirety, back to the Protected Party. With respect to a Claim for which the Authority, its Employee, or an Executive Committee member is a defendant or the claimant, special counsel shall be assigned to monitor the handling of the case by the Authority.
The payment of Defense Costs will reduce the Protection Limit under this Program.
C. Protection Limit
The Protection Limit shown on the Cover Page and the rules below determine the most the Program will pay, inclusive of Defense Costs, regardless of the number of:
1. Protected Parties;
2. Claims made; or
3. Persons or organizations that sustain injuries or Damages.
The Protection Limit stated on the Cover Page is the most the Program will pay per Member for the sum of Damages, Defense Costs and expenses as included in Section B.
Defense and Settlement under any or all or any combination of Bodily Injury, Property Damage, Personal Injury, Public Officials Errors and Omissions,
Broadcast/Publication Injury, Employment Practices Injury, Employee Benefit Administration Injury, or Chief Executive Separation Payment arising out of any one Occurrence.
For the purpose of determining the Protection Limit all Bodily Injury, Property Damage, Personal Injury, Public Officials Errors and Omissions, Broadcast/Publication Injury,
Employment Practices Injury, Employee Benefit Administration Liability, or Chief Executive Separation Payment arising out of exposure to substantially the same general condition(s), the same act, policy, or course of conduct by a Protected Party shall be considered as arising out of one Occurrence. All protection shall be deemed to arise from a single Occurrence where the underlying cause is continuous or repeated exposure to the
same generally harmful conditions, such as a breach or breaches of security, malware, virus,
hacking, or similar cyber-related events. All Claims which allege Occurrences extending to
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a duration of more than one Protection Period shall be treated as a single Occurrence arising during the first Protection Period when the Occurrence begins.
Any actual or alleged loss of use of tangible property not physically injured or destroyed shall
be deemed to occur at the time of the Occurrence that caused such loss of use. Any other
injury or damage occurring or alleged to have occurred over more than one Protection Period shall be deemed to have occurred during the Protection Period when the Occurrence began.
For an Additional Contribution, Tort Liability may be assumed in a Protected Contract
on behalf of a Railroad, and the Protection Limit for such assumed Tort Liability shall be
$2,000,000 per occurrence and in the aggregate. For purposes of this coverage, the Additional Contribution shall be determined based upon the number of railroad crossings for which a Member seeks coverage.
D. Statutory Limitations
Notwithstanding Sections II.A. Payments on Behalf of Protected Parties and II.B. Defense
and Settlement above, the defense and/or indemnity protections afforded by this agreement to a past or present elected or appointed official or Employee of a Member are not broader than the Member’s own duty to defend and indemnify its official or Employee under California Government Code sections 825, et seq. and 995, et seq. All immunities,
defenses, rights, and privileges of the Member under the Government Code apply to the Program as well, including any defense that the official or Employee acted outside the course and scope of employment or acted with fraud, corruption or actual malice, or any defense that the action or proceeding or type of damage sought is not the type for which the Member is obligated to provide defense and/or indemnity. The defense and/or indemnity
protections are also subject to all the terms, conditions, and Exclusions of this Memorandum and do not apply if not covered by this Memorandum, even if an obligation to defend and/or indemnify would exist under the Government Code.
E. Territorial Limitation
This Memorandum applies to Claims arising out of Occurrences during the Protection
Period, anywhere in the world, that are filed in the state or federal courts of the United
States of America.
F. Chief Executive Separation Payment – Excess Liability Program – please see Endorsement
This Program will also pay a Chief Executive Separation Payment to an eligible Chief
Executive who is separated from employment involuntarily, by the governing body of the Member. A Chief Executive that is forced to resign in lieu of termination will also be eligible for the Chief Executive Separation Payment. A Chief Executive that is subjected to a Termination for Cause, as defined in this Memorandum, shall not be eligible for the Chief Executive Separation Payment, nor will an interim or acting Chief Executive. The
Authority at its sole discretion shall determine eligibility for the Chief Executive Separation Payment.
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Conditions of eligibility require the separated Chief Executive to place the Authority on notice of intent to be considered for the Chief Executive Separation Payment within 60 days of the date of separation. The Chief Executive will be required to complete and submit
a Waiver to the Authority, within 60 days of the date of separation. The Chief Executive
will further be required to submit a Certification to the Authority within 60 days following the Waiting Period. Failure to complete the Waiver or Certification shall render the Chief Executive ineligible for the Chief Executive Separation Payment.
The Authority will compute the proper payment, and payment shall commence within 30
days following the submission of the first Certification. For a qualifying Chief Executive
who has applied for, but not yet received benefits from a public retirement system, the Authority will require the Chief Executive to provide written proof, from the provider, of the amount of public retirement benefit to be paid, prior to calculating and paying the Chief Executive Separation Payment. Payments will be made in arrears where necessary.
The Chief Executive Separation Payment shall not be considered “unemployment
insurance,” nor shall it be considered a “severance” payment.
The Chief Executive Separation Payment can only be waived by the Chief Executive if it is specifically noted, by name, within any separation or employment agreement entered into with the Member.
III. DEFINITIONS – Excess Liability Program – please see Endorsement for additional
definitions
Additional Contribution means an assessment charged to a Member for the cost or additional exposure associated with the Member’s participation in an optional liability protection available through this Memorandum.
Administration under Employee Benefits Administration Liability means:
A. Giving counsel to employees with respect to the Employee Benefits Programs;
B. Interpreting the Employee Benefits Programs;
C. Handling of records in connection with the Employee Benefits Programs; or
D. Effecting enrollment, termination, or cancellation of employees under the
Employee Benefits Programs, provided all such acts are authorized by the Member.
Aircraft means any vehicle designed to transport people or property through the air but does not include Small Unmanned Aircraft, as defined in 14 Code of Federal Regulations, Section 107.3.
Airport means any locality either on land or water which is adopted for the landing and
taking off of Aircraft, including all land, water, buildings, structures, equipment or other improvements necessary or convenient in the establishment and operation of an Airport.
Authority means the California Joint Powers Insurance Authority.
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Automobile means a land motor vehicle, trailer, or semi-trailer.
Automobile Liability means Tort Liability for Bodily Injury or Property Damage, arising from the use of an Automobile by a person defined in the Protected Party definition,
Sections B., E. or F.
Bodily Injury means bodily injury, sickness, or disease sustained by any person, including death resulting from any of these at any time.
Broadcast/Publication Injury means injury caused by or arising out of:
A. Any form of defamation or other tort related to disparagement or harm to the
character, reputation or feelings of any natural person or organization including but
not limited to libel, slander, product disparagement, trade libel, infliction of emotional distress, outrage, or outrageous conduct;
B. Any form of invasion of, infringement of, or interference with rights of privacy or publicity; including but not limited to false light, public disclosure of private facts,
intrusion, and commercial appropriation of name or likeness;
C. Infringement of copyright or trademark;
D. Plagiarism or piracy or misappropriation of ideas under implied contract;
E. Unauthorized use of names, trade names, trademarks, service marks, titles, formats, ideas, characters, character names, characterizations, performances,
plots, musical compositions, slogans, program material, or any other similar
material; or
F. Denial of access to broadcast facilities based upon application of judgment or standards relating to the acceptability of material for public broadcast; committed in the course of the Protected Party’s broadcast or publication activities.
Certification means a signed statement by a Chief Executive that he or she is entitled to
the Chief Executive Separation Payment because he or she is unemployed or is employed but receiving Compensation that is lower than he or she was earning at the time of the Occurrence. The initial executed Certification is a form provided by the Authority and must be received within 60 days following the Waiting Period.
Chief Executive means the governing body-appointed chief administrative officer of a Protected Party whether called city manager, chief administrative officer, general manager or other title designating the highest appointed official of the governmental entity.
Chief Executive Separation Payment means a payment that shall be paid once a month, in arrears, for a time period not to exceed six months, following the Waiting Period. The
payment shall equal the amount of the Chief Executive’s salary at the time of the
separation of employment Occurrence, plus payment of the Medical Benefit, less the total amount of Compensation being received after the separation of employment Occurrence and any other payments made to the Chief Executive, by the member, during the payment period. The term ‘salary’ shall be calculated in the same manner as ‘pensionable
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compensation’ as defined by Government Code section 7522.34, and applicable related regulations.
Claim means a notice, demand, or Suit against a Protected Party to recover Damages.
Claim does not include an administrative claim filed with the Equal Opportunity Employment
Commission, the California Department of Fair Employment and Housing, Public Employment Relations Board or other similar state or federal administrative agency.
Compensation for purposes of computation of the Chief Executive Separation Payment means:
A. Wages or salary earned as an employee of a new employer, subsequent to
separation,
B. Payments from a defined benefit retirement plan commencing subsequent to separation for which benefits were earned while employed by the Member,
C. Unemployment insurance, and
D. Income earned from self-employment or from work or activities as an independent
contractor, consultant, or in a similar capacity subsequent to separation.
Compensation does not include Social Security, Medicare or disability benefits.
Dam means a structure described by California Water Code sections 6002 through 6004.
Damages means compensation in money recovered by a party for loss or detriment it has
suffered through the acts of a Protected Party. Damages does not include defense of Claims, fines, or any punitive, exemplary or multiplied damages or non-monetary relief or redress or injunctive relief, nor does it include attorney fees or costs awarded to the prevailing party in a Claim or Suit, except where such attorney fees or costs are attributable to a claim for compensatory damages covered by this Memorandum.
Defense Costs means all fees and expenses incurred in connection with the adjustment,
investigation, defense, and appeal of a Claim covered hereunder, including attorney fees, court costs, premiums for appeal bonds, and interest on judgments accruing after the entry of judgment, and also shall include the costs of any claims administrator or defense counsel assigned by the Authority to respond to any Claim on behalf of the Authority. Defense
Costs shall not include the office expenses of the Protected Party, nor the salaries of
employees or officials of the Protected Party, nor expenses of any claims administrator engaged by the Protected Party. Defense Costs also do not include any fee or expense relating to coverage issues between the Authority and any Protected Party.
Discrimination means injury caused by or arising out of:
A. Unlawful discrimination because of race, sex, color, age, religion, or national
origin, or membership in any similar legally protected class; or
B. Violation of the discrimination prohibitions of the Americans with Disabilities Act of 1990, any rules or regulations promulgated thereunder and amendments thereto or similar provisions of any federal, state, or local statutory law or common law.
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Employee means any person falling within the definition of “employee” under section 810.2 of the Government Code. That section provides: “Employee includes an officer…employee, or servant, whether or not compensated, but does not include an independent contractor.”
Employee also includes any volunteer designated by the Member to perform specific
functions in the course and scope of authorized activities under the direction and control of the Member.
Employee Benefit Administration Liability means liability for injury or damage caused by or arising out of any negligent act, error or omission of the Protected Party in the
Administration of the Member’s Employee Benefits Programs.
Employee Benefits Program means group life insurance or self-insurance, group medical, dental or vision-care insurance or self-insurance, pension plans, retirement plans, deferred compensation plans, workers’ compensation, unemployment insurance, social benefits, disability benefits, and other similar employee benefits.
Employment Practices Injury means injury arising out of the following offenses:
A. Wrongful dismissal, discharge, or termination of employment;
B. Breach of any oral or written employment contract or quasi-employment contract;
C. Employment-related coercion or misrepresentation;
D. Violation of employment discrimination laws;
E. Workplace sexual or other harassment;
F. Wrongful failure to employ or promote;
G. Wrongful discipline, negligent evaluation, or wrongful demotion;
H. Wrongful deprivation of a career opportunity; or
I. Employment-related:
1. Invasion of privacy,
2. Defamation, or
3. Wrongful infliction of emotional distress.
Fungi means any type or form of fungus, including mold or mildew and any mycotoxins, spores, scents, or byproducts produced or released by fungi.
Hostile Fire means a fire that becomes uncontrollable and breaks out from where it is
intended to be.
Levee means a permanent embankment intentionally constructed for the purpose of preventing overflow of a watercourse or body of water.
Medical Benefit means the cost of all benefits to which a Chief Executive is entitled under
the Comprehensive Omnibus Budget Reconciliation Act of 1986 (COBRA). The Chief Executive may provide proof of medical coverage from an alternate provider, not to exceed the cost of coverage through COBRA.
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Member means the entity, including all of its departments and constituent agencies, that is a signatory to the Joint Powers Agreement creating the Authority as may be amended from time to time, which has adopted a resolution to participate in the Program, and whose name
appears on the Cover Page of this Memorandum. Member includes any other agency for
which the Member’s governing board or council acts as the governing board, and also includes any commissions, agencies, districts, authorities, successor agencies, boards, or similar entities coming under the Member’s sole direction and control. Member shall include any other agency authorized by the Authority’s Executive Committee or Board of Directors.
Memorandum means this Memorandum of Coverage – Primary Liability Program authorized
by the Joint Powers Agreement of the Authority specifying the terms and conditions of the Program through which certain specified and limited self-insured risks of liability are administered by the Authority and shared by its Members.
Nuclear Material means “source material,” “special nuclear material,” or “by-product
material” as those terms are given meaning in the Atomic Energy Act of 1954 or any law
amendatory thereto.
Occurrence means:
A. With respect to Bodily Injury or Property Damage, an accident, including continuous or repeated exposure to conditions, that first occurs during the
Protection Period and that results in Bodily Injury or Property Damage neither
expected nor intended from the standpoint of the Protected Party;
B. With respect to Public Officials Errors and Omissions, actual or alleged conduct described in the definition of Public Officials Errors and Omissions during the Protection Period;
C. With respect to Employee Benefits Administration Liability, actual or alleged
conduct described in the definition of Employee Benefits Administration Liability during the Protection Period;
D. With respect to Personal Injury, Broadcast/Publication Injury, and Employment Practices Liability, an offense described in the definitions of those
terms; or
E. With respect to Chief Executive Separation Payment, injury arising out of:
1. Dismissal, discharge, resignation in lieu of termination or termination of the employment of a Chief Executive; or
2. Failure to renew an employment contract which results in termination of
the employment of a Chief Executive
for which liability on the part of a Protected Party can be settled through the acceptance by the Chief Executive of a Chief Executive Separation Payment in exchange for a Waiver and Certification.
F. All claims based on or arising out of Harassment or similar conduct (including
molestation or sexual abuse) by an Employee, or more than one Employee
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acting in concert, will be considered arising out of one Occurrence and shall be deeming to have been committed at the time of the first of such acts or alleged acts, regardless of the number of:
1. Protected Parties;
2. Claims made; or
3. persons or organizations that sustain injuries or Damages.
If a series of wrongful acts committed by one Employee, or more than one Employee acting in concert, takes place over more than one Protection Period,
the wrongful acts will be deemed to have been committed during the first Protection Period and only the Protection Limit for that Protection Period shall apply.
Personal Injury means injury, other than Bodily Injury, Property Damage or Public Officials Errors and Omissions, resulting from one or more of the following offenses:
A. False arrest, detention, or imprisonment;
B. The use of force for the purpose of protecting persons or property;
C. Malicious prosecution or abuse of process;
D. Wrongful entry by any employee of the Member into a room, dwelling, or other similar premises that a person occupies;
E. Wrongful eviction by any employee of the Member of a person from a room,
dwelling, or other similar premises that such person occupies;
F. The publication or utterance of a libel or slander, including statements that disparage a person’s or organization’s goods, products, or services;
G. A publication or utterance that violates a person’s right of privacy;
H. Interference with an existing or prospective economic advantage, contract, or
agreement;
I. Discrimination;
J. Violation of civil rights; or
K. Infliction of emotional distress.
Pollutants/Hazardous Materials includes without limitation:
A. Any flammable or explosive substances, radioactive materials, asbestos, poly-chlorinated biphenyls, polyfluorinated substances, chemicals, substances known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic substances, or related materials which are regulated by or under any
federal, state, or local environmental law;
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B. Any material identified as hazardous in Sections 66261.10 through 66261.126 of Title 22 of the California Code of Regulations, as amended from time to time (collectively);
C. Any solid, liquid, gaseous or thermal irritant or contaminant, including smoke,
vapor, soot, fumes, acids, alkalis, chemicals, and waste. The term “waste” includes materials to be recycled, reconditioned, or reclaimed; or
D. Fungi and bacteria of any kind, unless caused by an otherwise covered Occurrence.
Program means the California Joint Powers Insurance Authority Primary Liability Protection
Program described by this Memorandum and the Joint Powers Agreement of the Members creating the Authority. The Program is a fund created by the Members for the purpose of pooling self-insured losses.
Property Damage means:
A. Physical injury to or destruction of tangible property which occurs during the Protection Period, including the loss of use thereof at any time resulting there from; or
B. Loss of use of tangible property that has not been physically injured or destroyed provided such loss of use is caused by an Occurrence during the Protection
Period.
Protected Contract means a written agreement that satisfies all of the following:
A. The agreement pertains to the Member’s operations and by the contract terms the Member assumes the Tort Liability of another to pay damages because of Bodily Injury or Property Damage to a third person or organization;
B. The agreement is entered into prior to the Bodily Injury or Property Damage for
which a Claim is made; and
C. The agreement, including its value, is reported by the Member and approved by the Authority through issuance of an evidence of coverage letter prior to the Bodily Injury or Property Damage and the value is added to the Member’s
annual payroll for use in any retrospective deposit or annual contribution
computation.
A Protected Contract may cover an architect, engineer, or surveyor for his or her role as a Public Official, except for the application of Sections B.1. and B.2. below. Protected Contracts may apply to contract public works directors, building officials, planning directors,
city managers, Chief Executives, city attorneys, city prosecutors, redevelopment directors,
or other contracted Public Officials for occurrences arising out of their official duties, but this coverage applies only to the named contract Public Official and does not extend to other individuals within the contractor’s firm.
A Protected Contract does not include any part of any contract or agreement:
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A. That indemnifies any person or organization for injury or damages caused by or arising out of the ownership, operation, maintenance or use of any Aircraft, Airport or Watercraft;
B. That indemnifies an architect, engineer, or surveyor. This exclusion does not apply
in the instance where an individual is under an exclusive contract as a contract Public Official solely for the benefit of the Member (i.e., no work is performed by the person for any other person or entity), for injury or damage arising out of:
1. Preparing, approving, or failing to prepare or approve maps, drawings,
opinions, reports, surveys, change orders, designs or specifications; or
2. Giving or failing to give directions or instructions, if that is the primary cause of the injury or damage;
C. Under which the Protected Party, if an architect, engineer, or surveyor, assumes liability for injury or damage arising out of the Protected Party’s rendering or
failing to render professional services, including those listed in Section B. above
and supervisory, inspection, or engineering services; or
D. That indemnifies any person or organization for damages by fire, explosion, or water damage to premises rented or loaned to the Member.
Limited Protected Contract means a written agreement, contract or permit in which:
A. The Member assumes the Tort Liability of another to pay damages because of Bodily Injury or Property Damage to a third party in one of the following:
1. Easements or License Agreements;
2. Leases of Real or Personal Property;
3. Encroachment Permits;
4. Special Events Sponsored by the Member; or
5. Use of Facilities, Equipment, real or personal property by the Member;
B. The Member assumes the Tort Liability of another to pay damages because of Bodily Injury or Property Damage to a third party for an activity not named in Section A. directly above, and upon its review of the agreement, Authority staff
has determined at its sole discretion that any risks assumed in the agreement do
not significantly increase the Member's risk exposure, and an Evidence of Coverage letter has been issued by the Authority; or
C. The Member is obligated to provide evidence of coverage for a third party to participate in a funding program administered by another government or evidence
of coverage required by bond indentures entered into by the Member if Authority
staff has determined in its sole discretion that any risks assumed in the agreement do not significantly increase the Member's risk exposure, and an Evidence of Coverage letter has been issued by the Authority;
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and which is entered into prior to the Bodily Injury or Property Damage for which a Claim is made.
A Limited Protected Contract does not include any part of any contract or agreement that
indemnifies any person or organization for injury or damages caused by the sole negligence
of such person or organization, or that cannot be included in a Protected Contract.
A Limited Protected Contract also does not include any part of a contract or agreement that indemnifies the owner or operator of a Railroad.
Protected Party means:
A. The Member named on the Cover Page;
B. Persons who are, or were, elected or appointed officials or Employees of the Member, whether or not compensated, while acting within the scope of their duties or employment as such, including while acting on outside committees, commissions, or boards at the direction of the Member, except that the protection
so provided does not apply to Bodily Injury to another official or employee of the Member in the course of and arising out of his or her duties to or employment by the same Member, nor does it apply to other individuals within the contract appointed official’s firm or organization, but only to the named appointed official.
C. Any nonprofit California corporation or unincorporated association under written
contract, approved by the Member’s governing board or council, to perform
specified functions under the Member’s direction and control. The corporation or unincorporated association is a Protected Party only for Occurrences arising out of the functions described in the contract. For the purposes of this Section C., direction and control means the Authority of the Member to be involved in decision
making and to overturn decisions;
D. Any person or entity identified as an additional Protected Party in a letter certifying such additional Protected Party status issued by the Authority, for Bodily Injury or Property Damage during the time period identified in the letter; if a particular activity is identified in the letter, the person or entity is a Protected
Party only for Occurrences arising out of the described activity. Additional Protected Party status will apply only where required by the terms of a written agreement;
E. Any person while using an Automobile owned, hired, or leased by a Member, and any person or organization legally responsible for the use thereof, provided
the use is with the express permission of the Member, and only for Bodily Injury
and Property Damage. This protection does not apply to:
1. Any person or organization, or any agent or employee thereof, other than the member, engaged in selling, repairing, servicing, delivering, testing, road testing, parking or storing, Automobiles, with respect to
any Occurrence arising out of any such occupation or activity;
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2. With respect to any hired automobile, to the owner or a lessee thereof, other than the Member, or to any agent or employee of such owner or lessee; or
3. Any person or organization, or to any agent or employee thereof,
engaged in a business of operating buses or other Automobiles for the transport of members of the public unless that business is owned by the Member and operated by its employees.
4. This Memorandum does not provide Underinsured or Uninsured
Motorist coverage.
F. The Authority, its officers and employees while acting in the course and scope of their duties or employment.
No person or entity is a Protected Party with respect to the conduct of any current or past partnership, joint venture or joint powers authority (including any separate entity created
pursuant to a joint powers agreement). However, for any person who is an official or Employee of a Member, who participates in the activities of a partnership, joint venture, or joint powers authority and is acting for or on behalf of the Member at the time of the Occurrence, protection is afforded by this Memorandum. Such coverage shall be in excess of, and shall not contribute with, any collectible insurance, self-insurance or other
coverage provided to the other joint powers authority, agency or entity.
Protection Period means the time period shown on the Cover Page of this Memorandum.
Public Officials Errors and Omissions means any act, error, omission, misstatement, misleading statement, neglect, or breach of duty by any Protected Party in the discharge of that individual’s duties for the Member; or any matter claimed against any Protected Party
solely by reason of the individual being or having been an employee of the Member. Public Officials Errors and Omissions does not include Bodily Injury, Property Damage, Personal Injury, Broadcast/Publication Injury, or Employment Practices Injury.
Radioactive Contamination Injury means Bodily Injury or Property Damage caused by or arising from ionizing radiations or contamination by radioactive material.
Railroad means a commercial railway as described by the California Public Utilities Code,
Section 229. Railroad includes street railroad as described by the California Public Utilities Code, Section 231. Railroad does not include amusement railroad rides that do not cross public streets.
Suit means a civil proceeding in which a Protected Party is named as a defendant or cross
defendant, or an arbitration proceeding or alternative-dispute resolution proceeding to which
a Protected Party submits with the Authority’s written consent.
Termination for Cause means dismissal, discharge, termination of employment, or failure to renew a contract for the reasons stated in California Government Code section 7522.72(a) relating to conviction for conduct arising out of or in the performance of official duties, in
pursuit of office or employment, or in connection with obtaining salary, disability retirement,
service retirement or other benefits. This also includes dismissal, discharge, termination of
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employment, or failure to renew a contract of the employment of a Chief Executive because the Chief Executive has been convicted of robbery, bribery, extortion, embezzlement, fraud, grand larceny, burglary, arson, a felony violation of a state or federal law regulating a
controlled substance (felony drug conviction), murder, rape, kidnapping, perjury, assault with
intent to kill, or any felony involving abuse or misuse of the Chief Executive’s position to obtain illegal personal gain.
In the event that charges for any of the offenses referred to in this paragraph are brought and pending at the time of termination, the Authority will be authorized to defer
determination of eligibility for Chief Executive Separation Payment until the outcome of
criminal proceedings.
Tort Liability means civil liability that would be imposed by law in the absence of any agreement or contract.
Waiting Period means a period of time after the termination of employment Occurrence
equal to the greater of (1) six months or (2) the number of months of salary received by the Chief Executive as a severance payment from the Member, regardless of whether the severance payment is made in lump sum or in multiple payments.
Waiver means a full and complete relinquishment by a Chief Executive of any and all rights to sue a Protected Party for any Benefit, compensation, injury, or damages, known or
unknown, past, present or future, arising out of the employment of, termination of the
employment of, or failure to employ the Chief Executive. The Waiver is a form provided by the Authority and must be signed and returned to the Authority within 60 days following the termination of employment. Waiver does not mean any waiver and release agreement signed by the Chief Executive directly with the member, during the separation process.
Watercraft means a vessel, 26 feet or more in length, designed to transport persons or
property in, on, or through water.
Weapon means a firearm, explosive, knife, or other implement or device that is considered dangerous and is in the possession of an Employee.
IV. EXCLUSIONS – Excess Liability Program – please see Endorsement for additional
definitions
This Memorandum, including any obligation to defend or to pay Defense Costs, does not apply to:
A. Any Claim, liability, alleged liability, loss, cost, or expense caused by or arising out of the ownership, maintenance, use or operation of any Watercraft, Aircraft, or
Airport or any air show events sponsored or controlled by the Protected Party or
conducted on property owned by the Protected Party. Protection does apply to use of an Aircraft or Watercraft, if the Aircraft or Watercraft is not owned in whole or in part by the Member and the Member exercises no part in the servicing or maintenance of the Aircraft or Watercraft. However, this limited protection
does not apply to:
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1. Loss, loss of use of, or damage to the Aircraft or Watercraft;
2. Use of any Aircraft or Watercraft for hire or reward; or
3. Public Officials Errors and Omissions coverage.
B. Any Claim, obligation or alleged obligation for which a Protected Party or any
insurance company as his/her/its insurer may be held liable under any workers’ compensation, unemployment compensation or disability benefits law, or under any similar law.
C. Any Claim, liability, alleged liability, loss, cost, or expense for Bodily Injury to:
1. An employee of the Protected Party arising out of and in the course of
employment by the Protected Party; or
2. The spouse, child, parent, brother, or sister of that employee as a consequence of Section 1. above.
“Employee” for purposes of this Exclusion C. shall mean a person deemed to be
an employee under Labor Code Sections 3352 and 3600, et seq.
This Exclusion C. applies whether the Protected Party may be liable as an employer or in any other capacity, and to any obligation to share damages with or repay someone else who must pay damages because of the injury. However, this Exclusion C. does not apply to liability assumed in a Protected Contract or
Limited Protected Contract.
D. Injury to or destruction of:
1. Property owned by the Protected Party;
2. Property rented to or leased to the Protected Party where it has assumed liability under any contract for damage to or destruction of
such property unless the Protected Party would have been liable in the
absence of such assumption of liability; or
3. Property in the care, custody, or control of any Protected Party.
E. Any Claim, liability, alleged liability, loss, cost, or expense caused by, arising out of or in any way connected with the operation of the principles of eminent domain,
condemnation proceedings, or inverse condemnation, by whatever name called,
whether such liability accrues directly against the Protected Party or by virtue of any agreement entered into by or on behalf of the Protected Party. This Exclusion E. shall not apply to liability, loss, cost or expense arising from property damage caused by earth movement, subsidence of land, flooding not caused by
the failure of a Dam or Levee, sewer backup, falling trees, fire or construction
activities even though a legal theory upon which a claimant seeks recovery is the principle of inverse condemnation. This Exclusion E. shall not apply when the Claim alleges damages arising out of temporary physical measures taken by the Member for public safety reasons in an effort to prevent or reduce a loss.
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F. Any Claim, liability, alleged liability, loss, cost, or expense arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release, escape, or any other forms of exposure to or the presence of Pollutants/Hazardous
Materials including any Claim, liability, alleged liability, loss, cost or expense
directly or indirectly caused by or arising out of any:
1. Request, demand, or order that any Protected Party or others test for, monitor, clean up, remove, contain, treat, detoxify, or neutralize, or in any way respond to, or assess the effects of Pollutants/Hazardous
Materials;
2. Claim by or on behalf of a governmental authority or any other entity or person for costs of or damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, or neutralizing, or in any way responding to, or assessing the effects of
Pollutants/Hazardous Materials; or
3. Actions or steps taken to mitigate damages or to relocate persons, property or business as a result of Pollutants/Hazardous Materials.
4. Claim or Suit brought under the Clean Water Act, including state or federal enforcement actions under 33 U.S. Code sections 1319, et seq.;
citizen Claim or Suit brought under sections 1365, et seq.; or state
enforcement actions brought under the California Water Code sections 13385, et seq.; or a Claim or Suit brought under any similar law relating to discharge permit violations.
EXCEPTION TO EXCLUSION, PROTECTION FOR CERTAIN ACCIDENTAL
POLLUTION INJURIES. However, this Exclusion F. does not apply to Bodily Injury or Property Damage arising out of or caused by any actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of Pollutants/Hazardous Materials if all of the following:
1. It was directly caused by Hostile Fire, explosion, lightning, windstorm,
vandalism or malicious mischief or collision, overturning or upset of a
motor vehicle or railroad vehicle;
2. It was accidental and was neither expected nor intended by the Protected Party;
3. It was instantaneous and was demonstrable as having commenced at a
specific time and date during the term of this Memorandum;
4. Its commencement became known to the Protected Party within seven days;
5. Its commencement was reported in writing to the Authority within twenty days of becoming known to the Protected Party; and
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6. Reasonable efforts were expended by the Protected Party to correct or terminate the discharge, dispersal, seepage, migration, release, or escape of Pollutants/Hazardous Materials.
Nothing contained in this EXCEPTION TO EXCLUSION, PROTECTION FOR
CERTAIN ACCIDENTAL POLLUTION INJURIES shall operate to provide any protection or obligation to defend or pay Defense Costs with respect to:
1. Any site or location used by others on the Protected Party’s behalf for the handling, storage, disposal, dumping, processing, or treatment of
waste material. This Exclusion F. applies whether or not the action by
others was known to the Protected Party;
2. Any clean-up costs mandated by the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and any similar laws or statutes;
3. Clean up, removal, containment, treatment, detoxification or
neutralization of Pollutants/Hazardous Materials situated on premises the Protected Party currently owns, rents or occupies; or
4. Any Claim, liability, alleged liability, loss, cost, or expense based upon or arising out of Personal Injury or Public Officials Errors and
Omissions.
G. Any Claim, liability, alleged liability, loss, cost, or expense directly or indirectly based on or arising out of the hazardous properties of Nuclear Material. However, this Exclusion G. does not apply to Radioactive Contamination Injury.
H. Any Claim, liability, alleged liability, loss, cost, or expense directly or indirectly
caused by any complete or partial failure, interruption, surge or excessive pressure
in the member's supply of water, electrical power, gas or fuel, unless such failure, interruption, surge or pressure results from sudden and accidental physical destruction of tangible property which is used in the generation or transmission of the supply.
I. Any Claim, liability, alleged liability, loss, cost, or expense arising out of the partial
or complete structural failure of a Dam or Levee.
J. Any Claim, liability, alleged liability, loss, cost, or expense caused by, or arising out of, or in connection with the operation of any hospital, clinic (including a mobile clinic), or established health-care facility owned or operated by the Protected
Party, but protection does apply to liability arising out of the rendering of
emergency medical aid by paramedics, emergency medical technicians, or other Protected Parties who are not acting in the course of their employment by a hospital, clinic, or established health-care facility. Protection also applies for liability arising out of the operation of any hospital, clinic (including a mobile clinic)
or established health care facility, owned and operated by the Protected Party for
animal care and control purposes.
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K. Any Claim, liability, alleged liability, loss, cost, or expense caused by or arising out of or in connection with the ownership, maintenance, use, or operation by the Protected Party of any Railroad. However, this Exclusion K shall not apply to
Member maintenance of its own property, such as streets, sidewalks or open
areas, located at, near, or crossing Railroad property.
L. Any Claim, liability, alleged liability, loss, cost, or expense caused by, based upon or arising out of the Employee Retirement Income Security Act of 1974, Public Law 93-406, or any amendment or addition thereto, or any statute or common law
rule which imposes fiduciary duties and responsibilities with respect to employee
benefits or retirement plans; however, this Exclusion L. does not apply to liability protected under Employee Benefit Administration Liability.
M. Any Claim, liability, or alleged liability for punitive or exemplary damages, fines, penalties or other damages imposed primarily for the sake of example and by way
of punishing the Protected Party, including liability of a Member to defend or pay
damages where the governing body thereof has elected to provide a defense or pay damages for a Claim, action or judgment for punitive or exemplary damages.
N. Any Claim, liability, alleged liability, loss, cost, or expense caused by the intentional conduct of a Protected Party with willful and conscious disregard of
the rights or safety of others or with malice. However, where the Protected Party
did not authorize, ratify, participate in, consent to or have knowledge of such conduct by its past or present Employee, elected or appointed official or volunteer and the claim against the Protected Party is based solely on its vicarious liability arising from its relationship with such Employee, elected or appointed official or
volunteer, this Exclusion N. does not apply to that Protected Party.
O. Any Claim, liability, alleged liability, loss, cost, or expense caused by or arising out of any violation of state or federal antitrust or restraint-of-trade laws.
P. Any Claim, liability, alleged liability, loss, cost, or expense arising out of
1. The adoption or administrative application of any ordinance, resolution
or regulation;
2. The approval or disapproval of any land-use entitlement including but not limited to general plan amendments, zoning amendments, permits, tract maps, development agreements, owner-participation agreements, or disposition-and-development agreements;
3. The approval or disapproval of any rent control ordinance, outdoor
advertising ordinance, or adult bookstore ordinance; or
4. The approval or disapproval of the operation of any cannabis dispensary, business, cultivator, or manufacturer; or any ordinances governing that activity and any and all enforcement efforts.
5. The decision by a Member with respect to obtaining water, electrical
power, gas or fuel, or other utilities, including decisions relating to the
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quality thereof; or allocating such water, electrical power, gas or fuel, or other utilities, among the users thereof.
6. The decision by a Member with respect to approval or disapproval of
district or at-large elections.
7. The approval or disapproval of an application for a concealed carry weapons permit.
This Exclusion P. shall not apply to bodily injury or property damage caused by the physical enforcement of an ordinance, resolution or regulation.
Q. Any Claim, liability, alleged liability, loss, cost, or expense including Tort Liability:
1. Arising out of or as a consequence of an actual or alleged breach of any contract or agreement;
2. For any amount actually or allegedly due under the terms of any contract or agreement; or
3. Arising out of or as a consequence of the failure, refusal, or inability of a Protected Party or anyone acting on behalf of a Protected Party to enter into or renew any contract or agreement.
However, this Exclusion Q. shall not apply to Tort Liability imposed by law for Damages caused by, arising out of, or as a consequence of failure or delay by a
Protected Party or anyone acting on behalf of a Protected Party to fully perform
any duties or obligations under any contract or agreement.
As used in this Exclusion Q., the term “contract or agreement” shall include but not be limited to a Protected Contract or Limited Protected Contract.
R. Any Claim, liability, alleged liability, loss, cost, or expense for declaratory,
injunctive, equitable or other relief, writs of mandate or prohibition or other
prerogative writs, or other relief not seeking Damages. This includes any expense or cost incurred by a Protected Party arising from the cost of reasonable accommodation of any disabled person, including any Employee.
S. Any Claim, liability, alleged liability, loss, cost, or expense for Personal Injury or
Broadcast/Publication Injury directly or indirectly caused by or arising out of any:
1. Oral or written publication of material, if done by or at the direction of the Protected Party with knowledge of its falsity;
2. Oral or written publication of material whose first publication took place before the beginning of the Protection Period; or
3. Act, omission, or offense committed by a Protected Party with actual
malice.
T. Any Claim, liability, alleged liability, loss, cost or expense for which the Protected Party is obligated to pay damages by reason of liability assumed in a contract or
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agreement. This Exclusion T. does not apply to liability for Bodily Injury or Property Damage:
1. Assumed in a contract or agreement that is a Protected Contract or
Limited Protected Contract; or
2. That the Protected Party would have independent of a written contract or agreement.
U. Any Claim by a Member against a Protected Party, except that this Section U. shall not apply to a Claim brought against the Authority.
V. Any Claim by a Member against another Member; or by any present or former
member(s) of any legislative body of the Member against any present or former member(s) of any legislative body of the Member.
W. Any Claim by a Protected Party against the Member for expenses incurred in responding to any administrative proceeding brought by the Member against that
Protected Party.
X. Any Claim, liability, alleged liability, loss, cost, or expense based upon or arising out of:
1. Loss of, loss of use of, injury to, destruction of, diminution of value of, disappearance of, or costs of recovery of any money or securities, or
any financial loss or default;
2. The imposition, collection, refund or refusal to refund of taxes, fees, penalties or assessments;
3. The issuance, management of proceeds or repayment of bonds, notes or other debt instruments by any Member or any agent acting on behalf
of such Member; or
4. The purchase, transfer, or sale of any securities by any Member or agent acting on behalf of such Member.
Y. Any Claim, liability, alleged liability, loss, cost, or expense for Public Officials Errors and Omissions Liability based upon or arising out of:
1. Liability of any Protected Party arising out of estimates of probable
costs or cost estimates being exceeded or for faulty preparation of bid specifications or plans including liability for mechanic's lien claims, stop notice claims, change order claims, site differential claims, or similar claims for the value of services or materials provided; this Exclusion X.
extends to such claims, however denominated, including claims of
breach of oral or written contract, third party beneficiary claims, quantum meruit claims, and/or open account claims;
2. Any Protected Party obtaining remuneration or financial gain to which the Protected Party is or was not legally entitled;
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3. Liability assumed by a Protected Party in a contract or agreement, but this Exclusion X. does not apply to liability for Damages that the Protected Party would have independent of the contract or agreement;
or
4. Willful violation of penal code or ordinance committed by or with the knowledge or consent of any Protected Party.
Z. Under Employment Practices Injury, any Claim, liability, alleged liability, loss, cost, or expense that:
1. Constitutes benefits due or to become due or the equivalent value of
such benefits, including but not limited to perquisites, fringe benefits, payments in connection with an employee benefits plan, service, disability or industrial disability retirement benefits, severance pay or any other payment other than salary or wages to or for the benefit of an
Employee arising out of the employment relationship;
2. Is representative of back salary either unpaid in whole or part or paid at an improper rate to an Employee by the Member;
3. Is based upon, arises from, or is in consequence of the employment reinstatement of the claimant by the Member or the continued
employment of the claimant;
4. Is based upon, arises from, or is a consequence of an Occurrence that began prior to this Memorandum's Protection Period;
5. Constitutes front pay, future damages or other future economic relief or the equivalent thereof, if the Member is ordered to reinstate the
Employee pursuant to a judgment or other final adjudication, but fails to
do so;
6. Is in the form of paid administrative leave; or
7. Is based upon, arises from or is in consequence of an actual or alleged violation of the responsibilities, obligations or duties imposed by the
Employee Retirement Income Security Act of 1974, the Fair Labor
Standards Act, the National Labor Relations Act, the Worker Adjustment and Retraining Notification Act, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Occupational Safety and Health Act, rules or regulations promulgated there under and amendments thereto
or similar provisions of any federal, state, or local statutory law or
common law.
However, with respect to the Exclusion Y., Sections 1. through 7. immediately above, no fact pertaining to or knowledge possessed by any Protected Party shall be imputed to any other Protected Party to determine if protection is available
under this Memorandum.
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AA. Any Claim, liability, alleged liability, loss, cost, or expense for Employee Benefit Administration Liability based upon or arising out of:
1. Any dishonest, fraudulent, criminal or malicious act, libel, slander,
discrimination, or humiliation;
2. Failure of performance of contract by an insurer;
3. Failure of any investment plan to perform as represented by a Protected Party;
4. Advice given by a Protected Party to an Employee to participate or not
participate in subscription plans; or
5. The inability of any Employee Benefits Program to meet its obligations due to insolvency or inadequacy of funding.
6. A determination by the Member or its staff that an individual is an independent contractor rather than an Employee, or an Employee rather
than an independent contractor, and any consequent decision whether
to enroll the person in an Employee Benefits Program and/or whether to withhold payroll taxes for or on account of that person.
BB. Any Claim, liability, alleged liability, loss, cost or expense falling within the Protection Provided terms of the insurance coverage for Cyber Liability provided
by the insurer selected by the Authority, "Privacy Regulatory Claims Coverage" or
"Security Breach Response Coverage."
CC. Any Claim, liability, alleged liability, loss, cost or expense arising from or related to any uninsured motorist or underinsured motorist law and to any sums the Member may be legally entitled to, to recover as Damages from the owner or operator of
an uninsured or underinsured Automobile because of Bodily Injury or Property Damage caused by an Occurrence and arising out of the ownership, maintenance or use of such Automobile. Use includes operations and loading or unloading.
DD. Any Claim, liability, alleged liability, loss, cost or expense caused by, or arising out
of:
1. Inhaling, ingesting or physical exposure to asbestos or goods or products containing asbestos;
2. The use of asbestos in construction or manufacturing any good, product or structure;
3. The removal of asbestos from any good, product or structure;
4. The manufacture, sale, transportation, storage or disposal of asbestos or goods or products containing asbestos; or
5. Investigation or defense of any loss, injury or Damage at any cost, fine or penalty or for any expense of Claim related to any of the above.
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EE. Any Claim, liability, alleged liability, loss, cost or expense arising out of or involving willful violation of a penal statute or ordinance committed by the Protected Party or with the Protected Party’s consent or knowledge. This
Exclusion EE shall not apply until it has been judicially established in fact that the Protected Party did commit such criminal act or willful violation.
FF. Any Claim, liability, alleged liability, loss, cost or expense arising out of the ownership, operation, maintenance, or control of any permanent landfill site or facility. Landfill includes any site for permanent storage accumulation, burial,
compost, sludge, or any other process for reducing or disposing of waste.
GG. Any Claim, liability, alleged liability, cost, or expense arising out of the use or presence of a Weapon in the workplace, except when authorized by the Member and by an Employee who is POST (Peace Officers Standards and Training) certified at the time of the Occurrence and subject to continuing POST oversight
and certification. “Workplace” means anywhere that the Protected Party is
fulfilling their duties for the Member, within the course and scope of their employment.
V. CONDITIONS AND RESPONSIBILITIES – Excess Liability Program – please see Endorsement for additional definitions
A. Inspection and Audit
The Authority shall be permitted but not obligated to inspect the Protected Party’s property and operations at any time. Neither the Authority’s right to make inspections nor the making thereof nor any report hereon shall constitute an undertaking, on behalf of or for the benefit of the Protected Party or others, to determine or warrant that such property or
operations are safe or healthful, or are in compliance with any law, rule or regulations. The Authority may examine and audit the Protected Party’s books and records at any time during the Protection Period and extensions thereof and within three years after the final termination of this Program, as far as they relate to the subject matter of this Memorandum.
B. Severability of Interest
The term Protected Party is used severally and not collectively, and the protection afforded
applies to each Protected Party against whom a Claim is made as if a separate Memorandum were issued to it, but the inclusion herein of more than one Protected Party shall not operate to increase the per Member Protection Limit.
C. Protected Party’s Duties in the Event of Occurrence or Claim
1. In the event of any Occurrence, written notice containing particulars
sufficient to identify the Protected Party and also reasonably obtainable information with respect to the time, place, and circumstances thereof, and the names and addresses of the injured and of available witnesses, shall be given by or for the Protected Party to the Authority's Claims
Administrator as soon as practicable.
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2. If a Claim is made against a Protected Party, the Protected Party shall immediately forward to the Authority's Claims Administrator every demand, notice, summons or other process received by the Protected
Party or the Protected Party’s representative.
3. The Authority's Claims Administrator will review the Claim, undertake whatever investigation is indicated, and take appropriate action, depending on the circumstances. A Claim may be returned to claimant as "insufficient," if it does not contain minimum and essential information
about the incident or the identity of the claimant. A Claim may also be
returned as "late," if the prescribed time for filing has been exceeded. The Claims Administrator may request that the Member reject the Claim, or take no action until further notice, or such actions may be taken by the Claims Administrator if claims handling authority has been
delegated to the Authority by the Member.
4. The Protected Party shall cooperate with the Authority and, upon the Authority's request, assist in making settlements, in the conduct of Claims, attending hearings and trials, securing and giving evidence, obtaining the attendance of witnesses and in enforcing any right of
contribution or indemnity against any person or organization who may
be liable to the Protected Party because of injury or damage with respect to which protection, including any Defense obligation, is afforded under this Memorandum; and the Protected Party shall not, except at the Protected Party’s own cost, voluntarily make any
payment, assume any obligation or incur any expense. No Claim shall
be settled without the prior written consent of the Authority, and the Authority shall not be required to contribute to any settlement to which it has not consented. The Protected Party shall not take any action whatsoever, subsequent to an Occurrence or Claim that could increase
the liability exposure of, or jeopardize the program or Authority in any
way. Failure to adhere to the duties set forth in this section can result in denial or recission of coverage on behalf of the Protected Party or Member, where the Executive Committee of the Authority determines that such failure prejudices the defense of a claim.
D. Other Protection
If collectible insurance or any other coverage or protection with any insurer, any permissibly self-insured general employer, joint powers insurance authority or any other source is available to the Protected Party covering a loss also protected hereunder (whether on a primary, excess or contingent basis), the protection hereunder (including any Defense
obligation) shall be in excess of, and shall not contribute with, such insurance or other
coverage or protection, provided that this clause does not apply with respect to any insurance purchased by a Protected Party specifically to be in excess of this Memorandum. Under no circumstances shall the protection afforded by this Program be
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considered primary, pro rata, concurrent or co-existent with such insurance, coverage, or other protection, unless agreed to by the Member through a written agreement approved by the Authority through the issuance of an evidence of coverage letter prior to a loss.
Protection Provided under this Memorandum of a Claim, liability, alleged liability, loss, cost
or expense also falling within the coverage terms of the insurance coverage for Cyber Liability provided by the insurer selected by the Authority, "Privacy Liability (including employee liability)", "Security Liability", and/or "Multimedia Liability", shall be on an excess and non-contributory basis except that if coverage exists under this Memorandum, it shall
apply to the Retention amount in the insurance coverage for Cyber Liability provided by the
insurer selected by the Authority.
E. Termination or Amendment
This Memorandum may be terminated or amended at any time in accordance with the Joint Powers Agreement and Bylaws of the Authority. The Executive Committee may adopt
exclusions of coverage, copayments, member retained limits or deductibles for actions or
omissions of a Member that are deemed to be a risk to the program. Such exclusions, copayments, member retained limits or deductibles may be imposed immediately upon adoption by the Executive Committee or as a consequence of a Member’s failure to adhere to an approved Performance Improvement Plan as defined in the Healthy Member Protocol.
The member will be given an opportunity to formally appeal the intended action before the
Executive Committee if such a request is made within 14 days from the date the Notice of Intent is issued. The Executive Committee will hear any appeal from the member and then take action to either enforce the Notice of Intent or provide additional direction to the Chief Executive Officer.
F. Changes to Memorandum
Notice to any agent or knowledge possessed by any agent of the Authority or by any other person shall not effect a waiver of or a change in any part of this Memorandum, nor shall the terms of this Memorandum be waived or changed, except by a written addendum issued by the Authority to form a part of this Memorandum.
G. Subrogation and Recovery
The Authority shall reserve the right to subrogate for any payments made hereunder and to assume the Protected Party’s recovery rights. The Protected Party shall do nothing after loss to prejudice such rights and shall do everything necessary to secure such rights. The Protected Party may waive subrogation rights, but only through written agreement executed
before the Occurrence giving rise to the loss. The Authority shall have standing to seek
subrogation recovery in its own name or in the name of the Protected Party, and the Protected Party shall cooperate with and assist the Authority in pursuing such recovery, including assigning its right to recover subrogated amounts, and if necessary executing a written agreement to effect such assignment. Any amount so recovered shall be apportioned
as follows:
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1. The Authority shall be reimbursed to the extent of all payment under this Memorandum. Any remaining balance shall be applied to reimburse the Protected Party;
2. The expenses of such recovery proceedings shall be apportioned in the
ratio of respective recoveries. If there is no recovery in proceedings conducted solely by the Authority, the Authority shall bear the expenses thereof.
H. Assignment
Assignment of interest under this Memorandum shall not bind the Authority until its
consent is endorsed hereon; if, however, the Member shall be adjudged bankrupt or insolvent, such protection and Defense obligations as are afforded by this Memorandum shall apply (a) to Member’s legal representative, as the Member, but only while acting within the scope of said representative’s duties as such, and (b) with respect to the property of the
Member, to the person having proper temporary custody thereof, as a Protected Party, but
only until the appointment and qualification of a legal representative.
The Member shall not assign, transfer, or pledge all or any portion of the Member’s rights or interests under this Memorandum, and the Authority shall not be liable to any person or entity claiming any such rights by virtue of any reported assignment, transfer, or pledge
thereof. The Authority’s denial of a defense shall not relieve the Member from complying
with the provisions of this paragraph. Further, any such assignment, transfer, or pledge shall relieve the Authority of all duties, obligations and coverage provided under this Memorandum to the Member with respect to the Claim in which the rights were assigned, transferred, or pledged.
I. Joint Powers Agreement
The provisions of this Memorandum are subject to and subordinate to the terms and provisions of the Joint Powers Agreement creating the Authority, and in the event of any conflict between the terms and provisions of said Joint Powers Agreement and this Memorandum, the terms and provisions of the Joint Powers Agreement shall control.
J. Appeal of Disputes
No party is entitled to appeal or arbitrate claims under this Memorandum other than the Member. Specifically, Employees are not intended to be third party beneficiaries of this agreement and shall have no right to bring an action against the Authority for a declaration of rights to protection under this Memorandum. The sole remedy of any Employee shall be
the Employee’s right to defense or indemnity against the employing Member under the
provisions of the California Government Code.
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.
1. A written notice that a Claim is not covered by the Memorandum will
normally be provided to the Member by the Claims Administrator. A
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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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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 J. Appeal of Disputes, upon request. Any request for such reconsideration must be in writing within 90 days of the
notice to the Member of the new Claim or cause of action.
If a Member disputes a coverage issue relating to the application or scope of an exclusion, then, during the course of the administrative and arbitration proceedings provided herein,
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only upon the request of the Member, the Authority shall defend the Claim against the Member and have the right to control any settlement of that Claim, subject to the right of the Authority to recover from the Member any amounts paid out by the Authority for such
defense or settlement which are finally determined by the Appeals Committee, or as a result
of the Binding Arbitration Process, not to be owed by the Authority under the Program. If the Member does not elect to request such a defense, Defense Costs incurred during the coverage appeal shall be at the sole cost and expense of the Member.
K. Arbitration
If the Member has followed the coverage appeals procedure outlined in Section V.J. 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 Arbitration Process shall be as follows:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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
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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.
6. If only five are willing to serve, they shall be the arbitration panel.
7. 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 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.
8. 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.
9. This process shall be repeated until five members are obtained for the arbitration panel.
10. 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.
11. 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.
12. 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.
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13. The parties to the arbitration shall not be governed by formal rules of evidence.
14. 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.
15. 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.
L. Limitation of Liability
Under no circumstances shall the Authority be liable for consequential damages, “bad faith” damages, or any sums beyond the amounts due under Section II. PROTECTION PROVIDED, plus interest at the same rate as the Authority earned on investments for the time period involved.
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ENDORSEMENT: LIABILITY PROGRAM
July 1, 2024–July 1, 2025
Endorsement
Liability Program
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Liability Coverage Program
Endorsement 1
I. ENDORSEMENT
The Liability Program Memorandum of Coverage is amended for members of the Primary and Excess Liability Programs.
This Endorsement constitutes an amendment to the coverage found in the 2020-2021 Liability Memorandum of Coverage for members of the Primary and Excess Liability Programs as follows:
II. PROTECTION PROVIDED
C. Protection Limit
Notwithstanding what is stated in the Cover Page, a Sublimit of $1,000,000 (one million dollars) per Occurrence applies to any claim arising out of Organic Pathogens. The Sublimit is the most the Authority will pay, in excess of the Member Retained Limit (if applicable) for the total of Damages and Defense Costs arising out of or related to:
ORGANIC PATHOGENS
1. All liability or expense arising out of any actual, alleged or threatened infectious, pathogenic, toxic or other harmful properties of any Organic Pathogen, including exposure to any Organic Pathogen; and
2. Any loss, cost or expense arising out of any:
a) request, demand, order or statutory or regulatory requirement
that any Protected Party or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of any Organic Pathogen,
b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up,
removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of any Organic Pathogen, or
3. All liability or expense arising out of any actual or alleged failure by a Protected Party to properly quarantine those affected by an Organic
Pathogen.
This Endorsement does not apply to Bodily Injury caused by any Organic Pathogen in or on any food or beverages sold, distributed, served or handled by the Protected Party.
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DEFINITION
ORGANIC PATHOGEN
“Organic Pathogen” means any:
1. Viruses or other pathogens (whether or not a microorganism); or
2. Colony or group of any of the foregoing.
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Liability Coverage Program
Endorsement 2
This Endorsement is issued to:
Member Name Member Retained Limit
Alhambra $750,000
Azusa $250,000
Commerce $250,000
Fountain Valley $300,000
Hermosa Beach $250,000
Irwindale $150,000
La Verne $250,000
Pacific Grove $150,000
San Luis Obispo $500,000
Santa Clarita $100,000
Stanton $100,000
Vista $150,000
West Covina $1,000,000
West Hollywood $250,000
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ENDORSEMENT: LIABILITY PROGRAM
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Endorsement
Liability Program
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I. ENDORSEMENT
The Liability Program Memorandum of Coverage is amended for the listed participants in the Excess Liability Program.
This Endorsement constitutes an amendment to the coverage found in the 2022-2023
Liability Memorandum of Coverage for members of the Excess Liability Program as follows:
II. PROTECTION PROVIDED
A. Payments on Behalf of Protected Parties
Subject to all provisions of this Memorandum, the Authority will cause the Program to pay
on behalf of the Protected Party all sums above the Member Retained Limit that the Protected Party shall become legally obligated to pay as Damages by reason of Tort Liability imposed by law, or the Tort Liability of others assumed in a Protected Contract, because of:
1. Bodily Injury or Property Damage, including Automobile Liability
2. Personal Injury;
3. Public Officials Errors and Omissions;
4. Broadcast/Publication Injury;
5. Employment Practices Injury; or
6. Employee Benefit Administration Liability
caused by an Occurrence during the Protection Period, to which this Memorandum
applies.
B. Defense and Settlement
The Authority shall have no duty to assume charge of investigation or defense of any Claim. However, the Authority shall have the right to assume control of the negotiation,
investigation, defense, appeal, or settlement of any Claim which the Authority determines, in its sole discretion, to have a reasonable possibility of resulting in a total of Damages and Defense Costs in excess of the applicable Member Retained Limit. The Member and Protected Parties shall fully cooperate in all matters pertaining to such Claim or proceeding. If the Authority assumes control of the handling of a Claim, the Member and
Protected Parties shall be obligated to pay, at the direction of the Authority, any sum as it is incurred, necessary for Defense Costs for the settlement of a Claim or to satisfy liability imposed by law, up to the applicable Member Retained Limit.
No Claim shall be settled for an amount in excess of the Member Retained Limit without the prior written consent of the Authority, and the Authority shall not be required to
contribute to any settlement to which it has not consented. With regard to Claims that are
determined by the Authority to have a reasonable possibility of exceeding the Member Retained Limit, the Authority shall, from the point of such determination, have sole
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settlement authority, control selection of defense counsel, Claims investigation and Claims handling.
For Claims which have not yet been determined by the Authority to have a reasonable
possibility of exceeding the Member Retained Limit, or for which the Authority determines,
in its sole discretion, should continue to be managed entirely within the Member Retained Limit, a collaborative approach is utilized in which the Member:
1. Retains settlement authority, except in cases of death or serious injury, or any Claim type listed in Section VI. CONDITIONS AND
RESPONSIBILITIES of the Addendum (claims with catastrophic
potential);
2. Retains the right to select defense counsel, from the Authority’s pre-approved defense panel;
3. Receives professional analysis and recommendations on matters such
as defense strategy, and other key decisions throughout the claims
handling process;
4. Receives regular and frequent communication regarding Claims as they develop;
5. Retains the ability to tailor participation and level of engagement to its
preferences;
6. Is required to establish and maintain a trust account for liability claim payments;
7. Is required to use the Authority-designated Claims Administrator;
8. Is encouraged to provide input and guidance concerning procedural
preferences for claims handling;
9. Is not permitted to self-administer Claims.
C. Protection Limit
For the purpose of determining the Protection Limit and Member Retained Limit, all Bodily Injury, Property Damage, Personal Injury, Public Officials Errors and
Omissions, Broadcast/Publication Injury, Employment Practices Injury, Employee Benefit Administration Liability, or Chief Executive Separation Payment arising out of exposure to substantially the same general condition(s), the same act, policy, or course of conduct by a Protected Party shall be considered as arising out of one Occurrence.
D. Reduction of Limits
All covered Claim payments for Damages or Defense Costs, which fall within the Member Retained Limit, will reduce the Protection Limit under this Program.
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E. Partial Coverage And Pre-Tender Fees
With respect to a Claim for which the Authority has determined that only a portion is encompassed by this Program, the Authority shall cause the Program to fund any defense
of the Claim against the Member and any settlement or final judgment of that Claim above
the Member Retained Limit, subject to the reservation by the Authority of the right to recover from the Member any amounts paid by the Authority for such settlement, Defense Costs, or final judgment paid to claimants for Claims, or portions thereof, not encompassed by the Program.
Expenses incurred prior to the reporting of a Claim, including but not limited to legal fees, Defense Costs and all expenses related to Claim investigation are not covered under this Memorandum, unless such expenses are approved by the Authority in writing.
F. Chief Executive Separation Payment
This Program will also pay a Chief Executive Separation Payment to an eligible Chief
Executive who is separated from employment involuntarily, by the governing body of the Member. A Chief Executive that is forced to resign in lieu of termination will also be eligible for the Chief Executive Separation Payment. The Member Retained Limit shall not be assessed to this coverage. A Chief Executive that is subjected to a Termination for Cause, as defined in this Memorandum, shall not be eligible for the Chief Executive
Separation Payment, nor will an interim or acting Chief Executive. The Authority at its sole discretion shall determine eligibility for the Chief Executive Separation Payment.
III. MEMBER RETAINED LIMIT
A. General Rules
The Member Retained Limit shall be applied to the aggregate of all covered Claims arising
from an Occurrence as defined in this Memorandum. The Member Retained Limit shall be reduced by both the payment of Damages and Defense Costs. The following general rules apply to Claims within the Member Retained Limit:
1. The Member Retained Limit shall not be impaired by any Claim brought against a Member which is not covered under this
Memorandum.
2. The Member agrees not to insure or otherwise reinsure the Member Retained Limit without the Authority’s written permission.
3. This Memorandum will not drop down to assume or satisfy the financial obligations of the Member for Damages or Defense Costs within the
Member Retained Limit. The Member Retained Limit can be satisfied only through payments for Damages and Defense Costs actually paid by the Member, to which the Authority has agreed.
4. The Member agrees that in the event of a judgment, settlement, or any Claim payment (including Defense Costs), in excess of the Member
Retained Limit, all outstanding amounts within the Member Retained
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Limit will be due and payable to the Authority upon demand. Such payment must be made before the Authority pays, tenders, or deposits in court, any part of said judgment, settlement, or defense expenditure.
Failure of the Member to comply with this provision will not invalidate
the Memorandum, but in the event of such failure, the Authority will be liable only to the extent that it would have otherwise been liable had the Member complied with this provision.
B. Reserving Policy
With regard to the case reserves of individual Claims within the Member Retained Limit,
the Authority-designated Claims Administrator, with oversight from Authority staff, shall determine reserve amounts as necessary and appropriate, in a manner consistent with the Authority’s reserving policy, using reasonable estimates of probable liability exposure, based on facts and circumstances relevant to individual Claims. The Authority-designated
Claims Administrator and Authority staff shall inform the Member of large reserve changes
and provide the Member with an opportunity to give input concerning the establishment of reserve estimates for large Claims, however the Member’s sole recourse for disputing reserve estimates is to appeal in writing to the Executive Committee. The Executive Committee shall make a determination by majority vote, and the Executive Committee’s
determination shall be final and binding.
C. Total Incurred Claim Value Trigger
Total incurred Claim values, which include actual Claim payments as well as reserves for defense, indemnity, and expenses shall serve as the basis for the Authority determining whether a Claim has a reasonable possibility of exceeding the Member Retained Limit, and
therefore trigger the Authority’s control of settlement and disposition of the Claim. At such
time as the total incurred value of a Claim exceeds the Member Retained Limit, settlement authority and control of the Claim shall transfer from the Member, and become the sole responsibility of the Authority.
D. Transfer Of Settlement Authority
Upon transfer of settlement authority from the Member to the Authority as described in Section III.C. Total Incurred Claim Value Trigger of the Addendum, the Authority’s control of settlement and disposition of the Claim is inclusive of the Member Retained Limit; meaning, the Member is required to contribute up to the full amount, if necessary, of its Member Retained Limit in order to pay for Damages and Defense Costs, as those
payments become due. The Member shall be notified by the Authority of the transfer of
settlement authority from the Member to the Authority.
E. Trust Account For Claim Payments
The Member agrees to establish and maintain a trust account with a financial institution for the purpose of paying for Claims, Damages, Defense Costs, and any other covered claims
expense within the Member Retained Limit. The Member further agrees to:
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1. Grant appropriate authorization to the Authority-designated Claims Administrator to issue checks and/or other methods of payment as necessary;
2. Use the trust account exclusively for liability claim payments covered
under this Program;
3. Issue all claim payments through the trust account, meaning: no liability claim payments are to be made or disbursed from other accounts, or from any other source without first providing written notice to the
Authority;
4. Take reasonable steps to ensure that the trust account is adequately funded so that claim payments can be made without delay, as they become due;
5. In the event that funds in the trust account are inadequate to pay for
claim expenses as they become due, the Member shall be notified and
required to deposit the necessary funds. If a lack of funding in the Member’s trust account results in a delay in the payment of a settlement, judgment, or any other authorized Claim expense, which subsequently results in fees or penalties, the Member will be solely
financially responsible for any and all such costs, arising from the late
payment;
6. Provide read-only access for on-line banking to the Authority, to facilitate claim payment reconciliations, and other data management needs of the Authority.
F. Authority-Designated Claims Administrator
The Member agrees to exclusively utilize the Claims Administrator that has been approved and designated by the Authority, and to report all Claims, regardless of whether the estimated Damages fall within or exceed the Member Retained Limit. Self-administration of Claims under this Memorandum is not permitted. The Authority agrees to take
reasonable and appropriate steps to ensure that the designated Claims Administrator is
periodically evaluated, and either meets or exceeds performance standards for claims handling and customer service, based on industry best practices. The Authority further agrees to provide appropriate oversight, regulate adjuster caseloads, and ensure that claims administration fees remain fair and equitable.
IV. DEFINITIONS
A. Member Retained Limit means the amount per Occurrence stated on the cover page that the Member retains as its self-insurance. The Member Retained Limit includes both Damages and Defense Costs. For the purpose of settlement authority determination, the Member Retained Limit includes actual claim
payments, and case reserves.
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ENDORSEMENT: LIABILITY PROGRAM
July 1, 2024–July 1, 2025
Endorsement
Liability Program
Page 7 of 9 July 1, 2024–July 1, 2025
B. Protection Limit means the sum of the Member Retained Limit and the Pooled Retained Limit, above which a Claim is tendered to the Program’s excess or reinsurance carriers.
V. EXCLUSIONS
A. Earth Movement – Any Claim of property damage directly or indirectly arising out of, caused by, resulting from, contributed to or aggravated by the settling, sinking, slipping, falling away, caving in, shifting, eroding, mud flow, rising, tilting, or any other subsidence or movement of land.
1. Any Claim, liability, alleged liability, loss, cost, or expense caused by, arising out of or in any way connected with the operation of the principles of eminent domain, condemnation proceedings, or inverse condemnation, by whatever name called, whether such liability accrues directly against the Protected Party or by virtue of any agreement
entered into by or on behalf of the Protected Party. This Exclusion A. shall not apply to liability, loss, cost or expense arising from property damage caused by, flooding not caused by the failure of a Dam or Levee, or sewer backup, even though a legal theory upon which a claimant seeks recovery is the principle of inverse condemnation. This
Exclusion A shall not apply when the Claim alleges damages arising out of temporary physical measures taken by the Member for public safety reasons in an effort to prevent or reduce a loss.
VI. CONDITIONS AND RESPONSIBILITIES
A. Authority’s Rights And Duties In The Event Of A Claim
For any Claim that has exceeded the Member Retained Limit, or has been determined by the Authority to have a reasonable possibility of exceeding the Member Retained Limit, the following rights and duties apply:
1. The Authority shall have the right and the duty to defend any Claim against the Member seeking Damages on account of such injury as is
covered in this Memorandum, after the Claim has exceeded the Member Retained Limit, even if the allegations of the Claim are groundless, false, or fraudulent.
2. The Authority shall conduct the defense of any Claim in the Member’s name and recover in the Member’s name for the Member’s benefit any
Claim for Damages or otherwise, against any third party, and the Authority shall have full discretion in the handling of any Claim.
3. The Authority shall have the right to control the litigation and select defense counsel. In the event that there is a coverage reservation of rights between the Authority and the Member, the Authority shall
retain its right to select defense counsel and control the defense of the
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ENDORSEMENT: LIABILITY PROGRAM
July 1, 2024–July 1, 2025
Endorsement
Liability Program
Page 8 of 9 July 1, 2024–July 1, 2025
Claim, without waiving its right to pay only those Damages which are covered under the terms of this Memorandum.
4. The Authority has the right, but not the duty, to appeal any judgment.
B. Authority’s Right To Control Claims With Catastrophic Potential
The Authority reserves the right at its sole discretion to exercise exclusive settlement authority and control over the disposition of certain Claim types, deemed by the nature of the allegations to automatically have catastrophic potential. The Authority may, at its sole discretion, exercise this right, commencing at the time the Claim is reported, or at any time
during the Claim evaluation process, regardless of whether the Claim falls within or exceeds
the Member Retained Limit based solely on established reserves.
The Claim types deemed to automatically have catastrophic potential are:
1. Any Claim involving death or serious injury, including but not limited to: spinal cord damage, brain damage, paralysis, loss of limbs, loss of sight
or hearing, multiple fractures, damage to major organs, and serious
burns;
2. Any Claim involving a proposed or certified class action;
3. Any Claim naming the Authority;
4. Any Claim involving environmental damage or injury with catastrophic
potential, including those involving contamination, pollution, toxic
chemicals, nuclear, radiation, lead, fungus, mold or asbestos;
5. Any Claim involving terrorism or suspected terrorism;
6. Any Claim alleging sexual misconduct of any type, including rape, abuse, assault, or molestation;
7. Any Claim alleging a civil rights violation with potential for an award of
substantial attorney fees.
C. Defense Counsel Selection
Within the Member Retained Limit, Members retain the right to select defense counsel from the Authority’s pre-approved defense panel. Should the Member desire to retain
defense counsel not on the Authority’s pre-approved defense panel, at the Authority’s sole discretion, said counsel may be retained subject to the following provisions:
1. Member selected defense counsel must comply with all Authority litigation guidelines, including reporting requirements, preparation of a written litigation management plan, and litigation budget. The negotiated
hourly rate for billing must also be equal to, or less than the Authority’s standard rate applied to the Authority’s pre-approved defense panel. In the event that the hourly rate charged by Member selected defense counsel is greater than the Authority’s standard rate, the Member will
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ENDORSEMENT: LIABILITY PROGRAM
July 1, 2024–July 1, 2025
Endorsement
Liability Program
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be solely financially responsible for the difference, and the difference in cost shall not be considered a covered expense under the Program.
2. Member selected defense counsel must furnish any and all information
related to the Claim that is requested by the Authority, and cooperate
with any counsel selected by the Authority to monitor or participate in the defense of the Claim.
3. If the Authority defends a Protected Party under a reservation of rights, defense counsel will be required to maintain records pertinent to
the loss adjustment expenses. These records may be subject to
inspection and audit by the Authority, and they may be used to determine the allocation of any loss adjustment expenses for which the Protected Party may be solely responsible, including defense of an allegation not covered by this Memorandum.
4. This Program does not pay for legal fees incurred by general counsel,
supplemental counsel, or secondary counsel unless approved in writing by the Authority.
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MEMORANDUM OF COVERAGE
PROPERTY PROGRAM
Issued to the City of West Covina
EFFECTIVE JULY 1, 2024–JULY 1, 2025
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MEMORANDUM OF COVERAGE
PROPERTY PROGRAM
ADMINISTERED BY THE CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
MEMBER: City of West Covina
MAILING ADDRESS: 1444 West Garvey Avenue South West Covina, CA 91790 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
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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
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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
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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
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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 CoverageJuly 1, 2024 at 12:01 am Pacific Time to July 1, 2025 at 12:01 am Pacific Time.
C.Covered LocationsAs held on file with the Authority’s authorized representative.
D.Notification of LossesTo 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.
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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
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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
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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
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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
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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
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(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.
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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
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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
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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
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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
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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 pay for any loss or damage caused by any of the following even if they are perils covered:
i. Vandalism;
ii. Sprinkler leakage, unless the system has been protected against
freezing;
iii. Building glass breakage;
iv. Water damage;
v. Theft; or
vi. Attempted theft.
With respect to perils covered against other than those listed in (b) (i)
through to (b) (vi) above, the maximum the Authority will pay will be the actual cash value less a further 25% of the actual cash value.
The covered building is considered Vacant or Unoccupied when it does not contain adequate covered property to conduct customary business
operations, but this provision shall not apply to any time period when
customary business operations are suspended due to circumstances that are usual to such business operations. 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.
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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.
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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
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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.
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