TERMS AND CONDITIONS FOR LEGAL ENTITY LIABILITY INSURANCE VK (valid as of )

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1 TERMS AND CONDITIONS FOR LEGAL ENTITY LIABILITY INSURANCE VK (valid as of ) Content I GENERAL TERMS AND CONDITIONS... 1 II POLICYHOLDER S OBLIGATION TO PROVIDE INFORMATION... 1 III OCCURRENCE OF A LOSS EVENT... 2 IV LOSSES SUBJECT TO COMPENSATION... 2 V GENERAL EXCLUSIONS... 3 VI COMPENSATION METHODS AND PROCEDURES... 3 VII INSURANCE CONTRACT AFTER THE OCCURRENCE OF AN INSURED EVENT... 4 VIII COMPANY ACTIVITIES LIABILITY INSURANCE... 4 IX BUILDING AND TERRITORY OWNER S LIABILITY INSURANCE... 4 X PRODUCT LIABILITY INSURANCE... 5 XI EMPLOYER S LIABILITY INSURANCE... 5 XII ADDITIONAL COVER OF LIABILITY INSURANCE... 6 I GENERAL TERMS AND CONDITIONS 1. Application of the conditions 1.1. The conditions of legal entity liability insurance (hereinafter referred to as Conditions) shall be applied along with the General Insurance Terms and Conditions of AAS Gjensidige Baltic Estonian Branch (hereinafter referred to as Gjensidige) In issues not covered by the Conditions and General Insurance Terms and Conditions, the parties to the insurance contract shall be guided by the provisions of the Obligations Act and other legislation of the Republic of 1.3. The Conditions shall apply to the following types of liability insurance: Company activities liability insurance (Part VIII of the Conditions); Building and territory owner s liability insurance (Part IX of the Conditions); Product liability insurance (Part X of the Conditions); Employer s liability insurance (Part XI of the Conditions). 2. Insurance Contract 2.1. The liability insurance contract consists of the insurance application, insurance offer, insurance policy, insurance terms and conditions and Annexes to the insurance contract The insurance contract may include any other document, provided that this document is referred to in the policy or it expresses an additional or special agreement concluded between the parties of the insurance contract. 3. Insured person 3.1. An insured person shall be the policyholder or any other person whose liability has been insured The insurance cover extends to all natural persons who are working under the direction and/or on the behalf of the insured person and who are used to fulfil tasks in business activities. 4. Aggrieved person An aggrieved person shall be a person whom the insured person shall be liable, under the legislation of the Republic of Estonia, to compensate the damage caused. 5. Insured object 5.1. In case of liability insurance, an insured object is the insured person s liability as resulting from the legislation of the Republic of 5.2. The insurance cover does not apply to the person s contractual obligations, unless the damages caused to the aggrieved person were subject to compensations also without the concluded contract. 6. Sum insured 6.1. The sum insured is reduced by the insurance indemnity paid during the insurance period In order to restore or increase the sum insured, an additional agreement to the insurance contract can be enclosed. 7. Deductible In the event of a number of claims arising from the same insured event, the deductible shall be calculated only in relation to the insurance indemnity which is paid first. II POLICYHOLDER S OBLIGATION TO PROVIDE INFORMATION 8.1. The policyholder must provide in the insurance application full and accurate information, including notifying of any damage, insured events, claims made and compensations paid that have occurred over the last five

2 years, as Gjensidige bases its risk assessment and the terms and conditions of an insurance contract on the data provided by the policyholder Gjensidige has the right to rely on the information provided by the policyholder also when setting the conditions for further insurance periods If the policyholder fails to submit relevant information or knowingly submits false information, Gjensidige shall have the right to withdraw from the insurance contract within one month from the moment it became aware of the breach of the obligation to provide information. III OCCURRENCE OF A LOSS EVENT 9. Policyholder s obligations upon the occurrence of a loss event 9.1. The policyholder shall notify Gjensidige of the occurrence of a loss event, about complaint, claim or lawsuit being filed against the insured person and any circumstances which may constitute the basis for a claim within one week as of the time when the policyholder became aware of the circumstances or the claim being filed The policyholder shall submit Gjensidige relevant documents and explanations, as well as participate at agreed time in the inspection of the loss scene or property, provided this is necessary for assessing the insured person's liability, the circumstances or extent of loss occurred The policyholder must in a timely manner use all appropriate legal remedies, in case a complaint, a claim or a lawsuit, including submitting a response, an objection, a complaint, a pretension etc., which is necessary to protect the rights of the insured person according to the legislation or the contract The policyholder may not, either in full or in part, recognise or satisfy the claim made against the insured person without a prior consent of Gjensidige, except in cases where dismissal or non-recognition of such claim is contrary to the principle of good faith concerning the interests of the aggrieved person. 10. Gjensidige s obligations upon the occurrence of a loss event Gjensidige shall immediately initiate the handling of a loss event or aggrieved person s claim after having the loss notice, including an expert or another person with special expertise, if necessary Gjensidige shall inform the policyholder about the procedural rules which apply to loss adjustment and the information and documents which Gjensidige needs to obtain in order to determine the liability of the insured person, circumstances of loss and the size and scope of the loss Gjensidige shall advise the policyholder on how to avoid the loss from increasing and give instructions to reject or contest the claim filed by the aggrieved person Gjensidige shall have the right to initiate a legal dispute with the aggrieved person on behalf of the insured person with the aim of rejecting a claim, determining the amount of damage, reducing the amount of the claim or entering into a compromise agreement. 11. Deadline for filing a claim Unless an extended reporting period for notifying of claims filed against the insured person has been agreed on, Gjensidige is liable for compensating claims arising from the insured event that is filed against the insured person no later than 30 calendar days after the expiry of the insurance period. IV LOSSES SUBJECT TO COMPENSATION 12. Insurance indemnity Insurance indemnity is the amount of money that Gjensidige pays to compensate for the property loss and/or personal injury and/or legal costs resulting from the occurrence of the insured event to the extent agreed in the insurance contract The insurance indemnity per an insured event is limited to the amount of the insurance claim and the sum insured Gjensidige shall decide the amount of insurance indemnity, by including an expert or any other person with special expertise, if necessary. In case of an effective court judgement, the amount of the insurance indemnity will be assessed based on the court judgement. 13. Property loss Gjensidige shall compensate as property loss: the normal value of the object destroyed; necessary and reasonable repair costs of the object; necessary and reasonable expenses in connection with the prevention of losses or further increase of losses Gjensidige shall not compensate as property loss for the decrease in value, the loss of income with regard to the destruction of or damage to the object, the cost of application for compensation, non-pecuniary (moral) damages or any other damages not specified in section Personal injury Gjensidige shall compensate as personal injury: the loss or reduction of income, subject to social tax, due to partial or total incapacity for work; necessary and reasonable medical expenses; necessary and reasonable costs of medical aids (e.g. eyeglasses, prostheses, wheelchairs, etc.); in case of aggrieved person s death, his or her funeral expenses; the loss or decrease of allowance paid to the dependants of the aggrieved person Gjensidige shall not compensate as personal injury for any further deterioration in the economic opportunities arising from the injury, the cost of application for compensation, non-pecuniary (moral) damages and any other damages not specified in section Also, the part of the loss that would have been compensated for under TERMS AND CONDITIONS FOR LEGAL ENTITY LIABILITY INSURANCE VK (valid as of ) 2/7

3 the pension insurance or other social insurance shall not be subject to compensation as personal injury. 15. Costs for legal assistance Costs for legal assistance are the amount of money paid by Gjensidige to cover legal assistance, expertise or court expenses incurred to prove the lack of liability and/or guilt of the insured person Costs for legal assistance shall be compensated only if they have previously been approved by Gjensidige in a format reproducible in writing If the claim that is filed against the insured person exceeds the sum insured, Gjensidige has right to compensate the costs of legal assistance on the same proportion as the claim amount exceeds the sum insured Costs for legal assistance shall not be subject to compensation, if the losses incurred or the claim the costs are associated with, are smaller than the deductible stated in the insurance contract Costs for legal assistance shall not be subject to compensation, if Gjensidige is not obliged to perform the insurance contract. V GENERAL EXCLUSIONS In case of liability insurance, Gjensidige shall not compensate for claims and loss caused by or arising from: circumstances, of which the policyholder or insured person was aware or ought to have been aware before entering into the insurance contract; loss event that is not considered insured event; public law sanction (e.g. financial penalty, fine, penalty payment, confinement, detention, etc.); damaging or violating the intellectual property rights by the insured person (such as trademark, copyright, patent, etc.); loss event caused by the insured person intentionally, due to gross negligence, dishonesty, crime or being under the influence of alcohol, narcotic drugs or psychotropic substances the activities in which the insured person has not had the right to engage pursuant to law, including the activities for which the insured person does not have the required qualification, preparation, licence, registration, authorisation, etc.; the contractual liability of the insured person (e.g. guarantees, interest, liquidated damages, etc.), or increased liability set out in the contract (e.g. waiver of objections, simplified verification, the extension of the period of limitation, the form of fault or liability, determining the extent of the damage, etc.); public promise to pay, competition, demonstration, negotiorum gestio or unjust enrichment; the need to alter, repair or replace an improper item, work of service; the contamination or pollution of the environment (air, earth surface, water, etc.); asbestos, tobacco, toxic mould; any substance that is radioactive, radiate, toxic or explosive; force majeure, wars, domestic wars, revolution, civil unrests, strike or lock-out, expropriation or confiscation of property, direct or indirect terrorism and restrictions or measures applied to prevent acts of terrorism; nuclear power (including nuclear weapon or nuclear fuel), radioactivity, damages due to electromagnetic field (including electromagnetic field of mobile devices) or ionized radiation; illegal blocking or obstruction of work, directly or indirectly, of information systems, computer hardware or software shortcomings; raw materials from genetically modified organisms; diethylstilbestrol (DES), dioxin, acquired immune deficiency syndrome (AIDS), infection, infectious disease or medications explosives, ammunition, gunpowder, nitroglycerine, dynamite, detonators, fireworks, compressed air or gas containers, butane, propane, methane, or other liquefied gas; any damage arising from any of the following activities in relation to high-risk subjects: airports, airport facilities, planes or other aircraft and their parts; ships or other vessels and their components; railway rolling stock and rail facilities; power (including hydro, nuclear, wind farms, etc.), combined heat and power plants; quays, piers, dams, reservoirs, dams, bridges, provided that the above mentioned object are water constructions; tunnels, underground or underwater mines; waste facilities, hazardous waste collection and storage area; oil or gas platforms; chemical factories. VI COMPENSATION METHODS AND PROCEDURES 17. Principles of compensation All claims for the compensation of losses arising from one and the same cause and/or event shall be considered as a single insured event If the insurance indemnity will be paid by periodic payments, the first payments shall be made by the policyholder in the deductible amount, and then Gjensidige continues to pay the periodic payments due Gjensidige pays the insurance indemnity to the policyholder. The insurance indemnity will be paid directly to aggrieved person if the amount payable to the aggrieved person is determined by a court decision or a compromise agreement, Gjensidige informs the policyholder of its intention in advance or if the policyholder so requests If the policyholder or the insured person has reached to an agreement with the claimant, or have already paid for the claim, or part of it, then it is not binding on Gjensidige if the actual amount of the claim is unproven, and/or the insured person's liability is voidable The policyholder shall immediately repay insurance indemnity to Gjensidige if after the indemnity has been paid, it becomes evident that the payment of insurance indemnity was not substantiated according to the insurance contract and the legislation of the Republish of TERMS AND CONDITIONS FOR LEGAL ENTITY LIABILITY INSURANCE VK (valid as of ) 3/7

4 18. Term of compensation Gjensidige shall pay insurance indemnity immediately but no later than within two weeks after: Gjensidige has determined the size of the loss and made the loss adjustment decision; the claim filed by the aggrieved person has been identified by enforced court judgment; the claim filed by the aggrieved person has been settled by the insured person at the written consent of Gjensidige and the latter has submitted to Gjensidige all required documents; the claim filed by the aggrieved person has been admitted by the insured person at the written consent of Gjensidige and the latter has submitted to Gjensidige all required documents; the compromise contract has been entered into by the insured person and the aggrieved person at the written consent of Gjensidige, and the insured person has submitted to Gjensidige all required documents. VII INSURANCE CONTRACT AFTER THE OCCURRENCE OF AN INSURED EVENT If Gjensidige pays the insurance indemnity in the total amount insured during the current insurance period, the insurance contract shall be deemed as withdrawn as of the moment of the payment of insurance indemnity since the policyholder s insurable interest has ended If Gjensidige pays the insurance indemnity in the amount smaller than the insured sum, the insurance contract shall be valid until the end of the insurance period, but the sum insured under the insurance contract shall be reduced in accordance with the amount of the insurance indemnity paid After the occurrence of the insured event, the parties to the insurance contract may withdraw from the insurance contract by notifying the other party thereof one week in advance. Upon cancellation of the insurance contract, Gjensidige retains the obligation to execute the contract with regard to insured events that occurred during the term of the contract. VIII COMPANY ACTIVITIES LIABILITY INSURANCE 20. Insurance cover In case of company activities liability insurance, Gjensidige shall compensate to the extent specified in the insurance contract for the loss caused to third persons as a result of the corporate activity of the insured person. 21. Insured event Insured event of company activities liability insurance is a sudden and unexpected loss event that occurs during the insurance period and meets all of the following conditions: the damage occurred is causally related to the insured person s activity specified in the insurance policy; the aggrieved person has suffered from property damage and/or personal injury; the insured person is obliged to compensate for the 22. Exclusions In case of company activities liability insurance, Gjensidige shall not compensate for: any damage which is caused to a person who is in an employment or service relationship with the insured person, his or her family member or relative, a legal representative or member of the management body of the insured person, procurator, liquidator, trustee in bankruptcy, legal person belonging to the same group with the insured person, a parent, subsidiary or affiliated company; any damage that was caused during the lasting service at a time when the insured person did not provide the work or service directly; any damage that has occurred during a single service after the completion of the work or service, or delivery of the outcome; any damage that is caused by a mistake or error occurred during the provision of professional service by insured person. IX BUILDING AND TERRITORY OWNER S LIABILITY INSURANCE 23. Insurance cover In case of building and territory owner s liability insurance, Gjensidige shall compensate third persons for the damage originated from a building or territory owned by the insured person in the extent specified in the insurance contract. 24. Ownership of a building and a territory The ownership of a building and a territory is the ownership of a room, building, facility, territory or immovable property by the insured person while being the owner, tenant, lessee, manager or other user thereof. 25. Insured event Insured event of building and territory owner s liability insurance is a sudden and unexpected loss event that occurs during the insurance period and meets all of the following conditions: the damaged caused have arisen directly from the room, building, facility, territory or immovable property specified in the insurance policy; the aggrieved person is suffering from property damage and/or personal injury the insured person is obliged to compensate for the 26. Exclusions In case of building and territory owner s liability insurance, Gjensidige shall not compensate for: TERMS AND CONDITIONS FOR LEGAL ENTITY LIABILITY INSURANCE VK (valid as of ) 4/7

5 any damage relating to the loss, theft or robbery of the property under the administration or in possession of the insured person; any damage caused to insured person s employee by an occupational accident; any damage associated with demolition work; any damage that has occurred to the room, building, facility, land or immovable belonging to the landlord or lessor. X PRODUCT LIABILITY INSURANCE 27. Insurance cover In case of product liability insurance, Gjensidige shall compensate to the extent specified in the insurance contract for the damage caused to third persons due to a defective product. 28. Product The product is a finished product, raw material or a component that is manufactured or marketed by the insured person A product is defective if it is not safe to the extent that the average consumer has the right to expect. 29. Insured event Insured event of product liability insurance is a sudden and unexpected loss event that occurs during the insurance period and meets all of the following conditions: the damage is causally related to the defect of the product specified in the insurance policy; the insured person has caused the loss event by making the defective product available to the consumer during the insurance period; the aggrieved person has suffered from property damage and/or personal injury; the insured person is obliged to compensate for the 30. Exclusions In case of product liability insurance, Gjensidige shall not compensate for: any damage caused due to non-compliance with safety regulations of the product set out in the legislation; any damage caused by improper or incorrect use or inability to use the product, including a failure to adhere to the producer's instructions; any damage that occurs to the defective product itself, including the requirements related to the improvement, alteration, reduction or elimination of the deficiency of the product; any damage related to the change in the price of the product, the replacement of the product or a product recall or removal; any damage caused by alcohol or tobacco products; any damage that has been caused by medical products including medicines, blood banks, silicone implants and electronic treatment devices; any damage that is caused by construction structures, incl. prepared mixtures (including concrete, bitumen); any damage that is caused by electronic control devices; any damage caused by the products manufactured, delivered or installed for the automotive industry, aviation, shipping or space equipment; any damage which is caused to a person who is in an employment or service relationship with the insured person, his or her family member or relative, a legal representative or member of the management body of the insured person. XI EMPLOYER S LIABILITY INSURANCE 31. Insurance cover In case of employer s liability insurance, Gjensidige shall compensate to the extent specified in the insurance contract for the damage caused by an occupational accident occurred to the insured person s employee. 32. Employee An employee is a person who works for the insured person under an employment contract or in the public service, including the procurator, trainee or agency worker An employee shall be also deemed to be a person who is acting under a contract under the law of obligation concluded with the insured person (e.g. contract for services, authorisation contract, agent contract, etc.), provided that the insured person is obliged under the law to pay social security contributions according to the remunerations payable under the aforementioned contract. 33. Occupational accident Occupational accident is personal injury or death of an employer, which happened to him or her when completing an assignment given by the employer, or any other work done under the employer's permission, during a break in working time or during any other operation of the employer's interest. Occupational accident cannot be considered as injury or death, which occurred in the aforementioned cases, but is not causally related to the employee's job or work environment In the issues related to occupational accident shall be governed by the Occupational Health and Safety Act. 34. Insured event Insured event of employer s liability insurance is an occupational accident taking place during the insurance period, and meets all the following conditions: the employee is suffering from property damage and/or personal injury; in case of the employee s death, his or her dependants are suffering from property damage; the insured person is obliged to compensate for the TERMS AND CONDITIONS FOR LEGAL ENTITY LIABILITY INSURANCE VK (valid as of ) 5/7

6 35. Insured event occurred in a foreign country In case of an employee working in a foreign country, Gjensidige s liability shall be limited to the extent and under the conditions set out in the legislation of the Republic of In case the legal relationship between the employee and the insured person is governed by the applicable law of any other state, Gjensidige is not obliged to pay compensation more than it would have paid in similar circumstances under the legislation of the Republic of 36. Exclusions In case of employer s liability insurance, Gjensidige shall not compensate for: any damage which has been cause by employee s illness or disease; any damage which has caused the employee s property; losses due to the employee s unfair dismissal, discrimination, sexual harassment, as well as any losses incurred in connection with the illegal employment relationship between the employer and the employee; any damage that was partly caused by the fact that the employee was under the influence of alcohol, narcotics, toxic or otherwise intoxicated; any damage that occurred because the employee had no health insurance coverage as a result of the insured person s failure to comply with his obligations; any damage, compensation for which the employer who directs its employees to other companies (supplier of temporary workers) under temporary agency work is liable; losses which compensates for other compulsory types of insurance (for example compulsory motor TPL). XII ADDITIONAL COVER OF LIABILITY INSURANCE 37. Validity of additional cover The parties to the insurance contract have agreed on the additional insurance cover, if such additional cover is stated in the insurance policy. 38. Retroactive period Retroactive period is the time before the beginning of the insurance period when the insurance cover given by Gjensidige applies Insurance cover does not cover these violations and claims which the policyholder or the insured person was aware of before concluding the retroactive period agreement. 39. Extended reporting period for notifying of claims Extended reporting period for notifying of claims is the time after the expiry of the insurance period during which claims filed against the insured person Gjensidige is liable for compensating During the extended reporting period for notifying of claims only the claims can be notified in which the damage has been caused to the aggrieved person during the insurance period. 40. Cross liability of an apartment association or community The additional cover of cross liability of an apartment association or community can be applied upon the building and territory owner s liability insurance In case of the additional cover of cross liability of an apartment association or community, the insurance cover applies to the claims filed by members of the apartment association or community against the insured person In case of the additional cover of cross liability of an apartment association or community, Gjensidige shall not compensate the following losses: responsibility of flat and non-residential premises owner or user; if the loss is caused by a lack of real estate, that the real estate owner or co-owners have been known, but has not removed; a result of the managed object (including utilities) located in an emergency; incurred in connection with the electricity, gas, heat or water supply disruption, incomplete for space heating, power fluctuations, telecommunications or data transmission interruptions, alarm or control equipment failure, improper or inadequate size pipes, cables and other equipment installed in the building or the use of machinery and equipment non-compliance with the applicable safety regulations Gjensidige covers the loss of members of the apartment association or community due to falling snow and icicle from the roof only if the loss occurs within five calendar days of continuous snowfall (ie a sudden increase in the snow cover of at least 100 mm in 24 hours) or within five calendar days after the last roof cleaning, if it is documented Gjensidige shall compensate the loss caused to property of member of the apartment association or community due to leaking of the roof, only if the leaking of the roof is caused by mechanical action of cleaning the roof and the apartment association or community is responsible. 41. Environmental damage The additional cover of environmental damage can be applied in case of company activities liability insurance, building and territory owner s liability insurance, and product liability insurance In case of additional cover of environmental damage, Gjensidige shall compensate to the extent specified in the insurance contract for the costs of elimination of environmental pollution (e.g. earth surface, air, water, soil, flora, fauna, organic or inorganic pollution) for which the insured person is liable for in accordance with the legislation of the Republic of An insured event of environmental damage is a loss event that has occurred during the insurance period and meets all of the following conditions: TERMS AND CONDITIONS FOR LEGAL ENTITY LIABILITY INSURANCE VK (valid as of ) 6/7

7 the occurrence of damage is sudden and unexpected. The occurrence of damage is not considered sudden and unexpected when it is caused by a slow and progressive or recurrent event; the time period between the occurrence and discovery of the damage is no longer than 72 hours; the claim for damages is submitted to Gjensidige no later than 7 calendar days after the discovery of the damage Gjensidige shall not compensate as environmental damage for: any damage, which is related to the deterioration of environmental quality; pollutants assessment and/or monitoring costs; any damage in any kinds of territories, which are fully used for handling, processing, storage, storing or loading contaminants or residual materials; any damage directly or indirectly resulting from the insured person s operations conducted underground and/or subsurface disposal/removal/loss of or damage to fuel, gas, or other substances. TERMS AND CONDITIONS FOR LEGAL ENTITY LIABILITY INSURANCE VK (valid as of ) 7/7