OREGON MUTUAL INSURANCE COMPANY DIVISION SIX GENERAL LIABILITY EXCEPTION PAGES

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1 S RULES 8. POLICY WRITING MINIMUM PREMIUM Paragraphs A.1. and B.1. are replaced by the following: A.1. Prepaid Policies $350 B.1. Annual Premium Payment Plan Policies $350 Paragraphs A.2. and B.2. are replaced by the following: Apply the policy writing minimum premium regardless of the policy period. The following paragraph is added: C. Contracting or Service (Codes and ) written on Claims-Made policies. Refer to Table 8.C. in the State Exception Pages for policy writing minimum premiums. 9. ADDITIONAL PREMIUM CHANGES Under A. Calculation Of Premium Paragraph A.2. is amended to read: 2. Apply the rates and rules in effect on the effective date of the policy, or, if the change is made after an anniversary date of the policy, apply the rates and rules in effect on that anniversary date. The additional premium developed is not in addition to any applicable policy writing minimum premium. Paragraph B.1. Waiver of Premium is replaced by the following: No additional premiums will be waived. 10. RETURN PREMIUM CHANGES Paragraph B.1. Waiver of Premium is replaced by the following: No return premiums will be waived. 11. POLICY CANCELLATIONS Paragraph A.4. does not apply. Paragraphs B.1., B.2., and B.3. are replaced with the following: B.1. Continuous and Annual Premium Payment Policies Compute the return premium pro rata of the unearned premium for the one year or annual installment period and round to the next higher whole dollar. B.2. Prepaid Policies If cancelled during the first year, compute the return premium pro rata of the unearned premium for the first year, plus the full annual premium for the subsequent years and round to the next higher whole dollar. B.3. Policies With Term Less Than One Year Compute the return premium pro rata of the unearned premium and round to the next higher whole dollar. 14. MINIMUM PREMIUMS B. Determination Paragraph B.2. is replaced by the following: 2. Refer to Table 14.B.2. in the State Exception Pages for the Premises/Operations minimum premium for classifications with increased limits table assignments 1, 2 and 3 and for the Products/Completed Operations minimum premium for classifications with increased limits table assignments A, B and C. C. Sublines The following is added to Paragraph C.: The Fixed Expense Credit will be applied to each subline minimum premium. E. Paragraph E. Special Combined Minimum Premium Classifications does not apply. July 2011 Countrywide CG-E-1

2 S 15. DEDUCTIBLES Paragraph D.3. is amended to read: Deductible discount factors shown in the various tables are on a per occurrence basis. No per claim deductibles are available. For those classes (10072, 10073, 10075, 13453, 13454, 13455, 19061, 43945, and 95233) where the Classification Table footnotes indicate a $250 per claim property damage deductible applies, a per occurrence property damage deductible will apply. The minimum deductible available is $ ADDITIONAL INTERESTS The following paragraph is added to Rule 16.B. Additional Charge Refer to Company: Paragraphs B.1., B.2., B.3., B.4., B.5., B.6., B.7., B.8., B.9. and B.10. are replaced by the following: B.1. Additional Insured Concessionaires Trading Under Your Name Endorsement CG Base minimum premium is $25. B.2. Additional Insured Grantor Of Franchise Endorsement CG Base minimum premium is $25. B.3. Additional Insured Lessor Of Leased Equipment Automatic Status When Required In Lease Agreement With You Endorsement CG Base minimum premium is $25 subject to a base maximum of $100. Additional Insured Lessor Of Leased Equipment Endorsement CG Base minimum premium is $25 subject to a base maximum of $100. B.4. For owners, lessees or contractors owners or lessees on policies covering contractors or contractors on policies covering subcontractors, but only as respects liability for operations performed for those owners, lessees or contractors by or on behalf of the insured contractor or subcontractor, use Additional Insured Owners, Lessees Or Contractors Scheduled Person Or Organization Endorsement M2666L. The base minimum premium is $25. B.5. Additional Insured Managers Or Lessors Of Premises Endorsement CG Base minimum premiums are $38 for retailers/wholesalers and $13 for all others. B.6. Additional Insured Vendors CG Charge is 15% of the products rate based on the total annual sales (per $1000) by the vendor. B.7. Additional Insured Designated Person Or Organization Endorsement CG Base minimum premium is $25. B.8. Additional Insured Engineers, Architects Or Surveyors Not Engaged By The Named Insured Endorsement CG Base minimum premium is $25. B.9. does not apply. B.10. does not apply. a. Premium Determination (1) Experience Rating Multiply the base minimum premium developed in Paragraphs B.1. through B.8. above by any credit or debit resulting from the application of Experience Rating, if applicable. (2) Scheduled Rating Multiply the premiums shown in Paragraph a. above by any credit or debit resulting from the application of Scheduled Rating, if applicable. CG-E-2 Countrywide July 2011

3 S 16. ADDITIONAL INTERESTS a. Premium Determination (Continued) (3) Package Modification Factor Multiply the premium developed in Paragraph b. by the factor shown in Table 4. Package Modification Factors in Division Six General Liability Additional Oregon Mutual Rules State Exception Pages, if applicable. (4) Fixed Expense Credit Multiply the premium developed in Paragraph c. by the factor from Table 2. in the State Exception Pages. (5) All premiums are fully earned. 22. DESCRIPTION OF COMMERCIAL GENERAL LIABILITY COVERAGE Paragraph C.1.b. is replaced by the following: Commercial General Liability Coverage Form Claims-Made Version M2657L. Paragraph C.2.b. is replaced by the following: Employment-Related Practices Exclusion CG COMPANY RATES OR ISO LOSS COSTS Paragraph 4. under C. Basic Limits is amended to read: The Aggregate Limits may not be reinstated when exhausted. D. Increased Limits The following paragraph is added to Rule 23.D.1.: For Increased Damage To Premises Rented To You limits refer to Table 23.D.1. below for factors: Limit Factor Limit Factor $100, $325, $125, $350, $150, $375, $175, $400, $200, $425, $225, $450, $250, $475, $275, $500, $300, Table 23.D.1. Medical limits higher than $10,000 are not available. G. Claims-Made Multipliers Paragraph G. is replaced by the following: Refer to Table 23.G. in the State Exception Pages for Claims-Made multipliers. July 2011 Countrywide CG-E-3

4 S 25. CLASSIFICATIONS A. For the following classifications, the rates are subject to adjustment on cancellation by the insured: 1. Class code Boats Canoes Or Rowboats Not For Rent Not Equipped 2. Class code Boats Motor Or Sail Not For Rent 3. Class code Boats Not For Rent NOC 4. Class code Animals Saddle For Rent 5. Class code Animals Private B. For the following classifications, the premiums are subject to adjustment on cancellation by the insured: 1. Class code Swimming Pools The following Notes are added for the classifications indicated: C. Gambling-Incidental to Other Operations For class code Gambling-Incidental to Other Operations if such incidental gambling operation is not operated by the insured's own employees or if there is no payroll available because the gambling facility is basically conducted through the use of machines such as slot machines or video card games, receipts for those exposures will be assigned to the governing class. D. Bakery Services Errors and Omissions Liability Endorsement Bakery Services Errors and Omissions Liability Endorsement will be added to all bakeries and bakery plants (class codes and 51315). This endorsement extends $50,000 of coverage to apply to damages resulting from the insured s negligent act, error or omission in providing bakery services. There is no charge for this endorsement. Form: M2755L E. Florists Errors & Omissions Liability Endorsement Florists Errors & Omissions Liability Endorsement will be added to florists (class code 12841). This endorsement extends coverage to apply to the insured s professional services as a florist. There is no charge for this endorsement. Form: M2757L F. Mail Services Errors and Omissions Liability Endorsement Mail Services Errors and Omissions Liability Endorsement will be added to all Mail Box or Packaging Stores and Mailing or Addressing Companies (class codes and 45937). This endorsement extends $50,000 of coverage to apply to damages resulting from the insured s negligent act, error or omission in providing mail services. There is no charge for this endorsement. Form: M2756L G. Wake-Up Call Errors and Omissions Liability Endorsement Wake-Up Call Errors and Omissions Liability Endorsement will be added to all Motels and Hotels (class codes 45190, 45191, 45192, and 45193). This endorsement extends $50,000 of coverage to apply to damages resulting from the insured s negligent act, error or omission in providing wake-up call services. There is no charge for this endorsement. Form: M2754L H. Barbers and Beauticians Professional Liability Barbers and Beauticians Professional Liability Endorsement will be added to all Barber Shops (class code 10113), Beauty Parlors & Hair Styling Salons (class code 10115) and Nail Salons (class code 15600). This endorsement provides professional liability for barbers and beauticians and also extends business liability and professional liability coverage to independent operators who rent or lease space in the insured premises for the purpose of conducting barber or beautician services. There is no charge for this endorsement. Form: M2793 CG-E-4 Countrywide July 2011

5 33. SPECIAL RULES APPLICABLE TO THE CLAIMS-MADE COVERAGE FORM M2657L Rule 33. is replaced by the following: A. Extended Reporting Periods 1. If the circumstances relating to the termination, renewal or replacement of the Claims-Made coverage specified in Section V Extended Reporting Periods of Claims-Made Commercial General Liability Coverage Form M2657L are met, an extended reporting period will be provided. Under the extended reporting period, a claim first received and recorded during the extended reporting period will be deemed to have been made on the last day of the policy period. The claim must be for damages because of bodily injury or property damage liability which occurred or because of personal and advertising injury liability caused by an offense committed before the end of the policy period, but not before the applicable Retroactive Date. A Basic Extended Reporting Period is automatically provided at no additional charge. This period begins with the end of the policy period and lasts for 60 days. The Basic Extended Reporting Period does not apply to claims that are covered under subsequent insurance purchased, or to claims that would be covered but for the exhaustion of the amount of insurance applicable to such claims. 2. The Basic Extended Reporting Period does not reinstate or increase the limits under the policy. 3. A Supplemental Extended Reporting Period of unlimited duration is available by attaching Supplemental Extended Reporting Period Endorsement M2658L for an additional charge. The Named Insured must request this endorsement in writing within 60 days after the end of the policy period. This Supplemental Extended Reporting Period starts 60 days after the end of the policy period. 4. Refer to Table 33.A.4. in the State Exception Pages for Supplemental Extended Reporting Period Endorsement factors. 5. If the Supplemental Extended Reporting Period is in effect, supplemental aggregate limits will be provided, but only for claims first received and recorded during the Supplemental Extended Reporting Period. The supplemental aggregate limits will be equal to the dollar amount shown in the Declarations in effect at the end of the policy period. B. Exclusion of Specific Accident(s), Products, Work or Location(s) 1. Coverage for bodily injury or property damage arising out of specific accidents, products, work or locations may be excluded by attaching Exclusion of Specific Accidents, Products, Work or Location Endorsement CG to a new or renewal Claims-Made policy. 2. If the Exclusion of Specific Accidents, Products, Work or Location Endorsement CG is attached to a renewal of Claims-Made coverage, and the preceding policy: a. Was issued by our company; and b. Provided coverage for the newly excluded accident, product, work or location: Amendment of Section V Extended Reporting Periods For Specific Accidents, Products, Work Or Location Endorsement CG must be attached to that preceding policy. Endorsement CG amends Section V Extended Reporting Periods of the preceding policy so that a basic extended reporting period is provided for 60 days for all other claims arising out of the specific accidents, products, work or locations newly excluded on renewal. The insured is also given the option of purchasing a supplemental extended reporting period of unlimited duration. 3. A Supplemental Extended Reporting Period for Specific Accidents, Products, Work or Locations may be provided. Use Supplemental Extended Reporting Period Endorsement For Specific Accidents, Products, Work or Locations M2659L. Use the same factors shown in Table 33.A.4. in the State Exception Pages. If the Supplemental Extended Reporting Period is in effect, supplemental aggregate limits will be provided, but only for claims first received and recorded during the Supplemental Extended Reporting Period. The supplemental aggregate limits will be equal to the dollar amount shown in the Declarations in effect at the end of the policy period. July 2011 Countrywide CG-E-5

6 33. SPECIAL RULES APPLICABLE TO THE CLAIMS-MADE COVERAGE FORM M2657L (Cont.) C. Retroactive Date The Retroactive Date is a specific date entered on the Declarations Page of the policy. Any bodily injury, property damage or personal and advertising injury which occurred prior to the Retroactive Date is not covered, even if a claim for such injury or damage is first made during the policy period or any applicable Extended Reporting Period. Once a Retroactive Date is established for an insured, it can only be advanced with the written consent of the first Named Insured, and then only: 1. If there is a change in carrier; 2. If there is a substantial change in the insured's operations which results in an increased exposure to loss 3. If the insured fails to provide the company with information: a. The insured knew or should have known about the nature of the risk insured which would have been material to the insurer's acceptance of the risk; or b. Which was requested by the company; or 4. At the request of the insured. Prior to the advancement of the Retroactive Date under any of these conditions, the company must obtain the written acknowledgment of the first Named Insured acknowledging that the first Named Insured has been advised of the right to purchase the Supplemental Extended Reporting Period Endorsement. If "none" is entered on the Declarations Page of the policy, there is no Retroactive Date. If there is no Retroactive Date, coverage may be afforded for bodily injury, property damage or personal and advertising injury occurring prior to the inception date of the policy. D. Ratable Payroll For rating purposes, the ratable payroll for each class shall be the average (rounded to the nearest thousand) of the actual payroll for the current policy period being rated and the actual payrolls for each of the prior five policy periods. However, do not use any policy periods prior to the insured s retroactive date. Example 1 Example 2 Rating for policy term 10/1/ Rating for policy term 10/1/ Retroactive date is 10/1/2004 Retroactive date is 10/1/1998 Insured s Payroll Payroll to use Insured s Payroll Payroll to use $200, $200, $200, $200, $320, $320,000 $ 200,000 $312, $420, $420, $480, $480, $250, $250,000 Example 3 Rating for policy term 10/1/ Retroactive date is 10/1/2001 Insured s Payroll Payroll to use $200, $200, $320, $420,000 $285,000 CG-E-6 Countrywide July 2011

7 33. SPECIAL RULES APPLICABLE TO THE CLAIMS-MADE COVERAGE FORM M2657L (Cont.) E. Limits of Liability If the insured requests and the company agrees, the limits of liability may be increased. However, if the amount of time between the retroactive date (or the date of the last previous increase in the limit of liability) and the date upon which the limit is changed is 1 year or more, the premium, including any premium for the higher limit, must be temporarily surcharged. Apply a surcharge factor of 1.15 for up to 4 years based on the following table. Amount Of Time Between The Retroactive Date (Or The Date Of The Last Previous Increase In The Limit Of Liability) And The Date Upon Which The Limit Is Changed Number Of Annual Policies On Which To Apply The Surcharge 12 months 18 months 1 Over 18 months but not more than 30 months 2 Over 30 months but not more than 42 months 3 Over 42 months DESCRIPTION OF ADDITIONAL OPTIONAL ENDORSEMENTS A. Additional Optional Endorsements The following paragraphs are added: 1. Motels a. Description When coverage is written using Hotels and Motels class codes 45190, 45191, 45192, and 45193, this endorsement may be provided. This endorsement provides a $25,000 Liability For Guests' Property Limit, which is subject to a $1,000 per guest limit. Exclusions specific to these coverages are also included. b. Form M2752L c. Premium Determination (1) Refer to Table 36.A.1.c.(1) in the State Exception Pages for the loss cost. Multiply the loss cost by the Premises/Operations Loss Cost Multiplier shown in the State Exception Pages. (2) Scheduled Rating Multiply the premium developed in Paragraph (1) by any credit or debit resulting from the application of Scheduled Rating, if applicable. (3) Experience Rating Multiply the premium developed in Paragraph (2) by any credit or debit resulting from the application of Experience Rating, if applicable. (4) Package Modification Factor Multiply the premium developed in Paragraph (3) by the factor shown in Table 4. Package Modification Factors in Division Six General Liability Additional Oregon Mutual Rules State Exception Pages, if applicable. (5) Fixed Expense Credit Multiply the premium developed in Paragraph (4) by the factor from Table 2. in the State Exception Pages. July 2011 Countrywide CG-E-7

8 36. DESCRIPTION OF ADDITIONAL OPTIONAL ENDORSEMENTS (Cont.) 2. Motels Liability For Guests Property In Safe Deposit Boxes a. Description When coverage is written using Hotels and Motels Class Codes 45190, 45191, 45192, or 45193, this endorsement may be provided. This endorsement provides a $25,000 limit of liability to cover guests' property held in a safe deposit box on the insured's premises. b. Form M2753L c. Premium Determination (1) Refer to Table 36.A.2.c.(1) in the State Exception Pages for the loss cost. Multiply the loss cost by the Premises/Operations Loss Cost Multiplier shown in the State Exception Pages. (2) Scheduled Rating Multiply the premium developed in Paragraph (1) by any credit or debit resulting from the application of Scheduled Rating, if applicable. (3) Experience Rating Multiply the premium developed in Paragraph (2) by any credit or debit resulting from the application of Experience Rating, if applicable. (4) Package Modification Factor Multiply the premium developed in Paragraph (3) by the factor shown in Table 4. Package Modification Factors in Division Six General Liability Additional Oregon Mutual Rules State Exceptions Pages, if applicable. (5) Fixed Expense Credit Multiply the premium developed in Paragraph (4) by the factor from Table 2. in the State Exception Pages. B. Termination And Suspension Endorsements The following is added: We are not charging or allowing credit for any endorsement. C. Exclusion Endorsements The following is added to Paragraph C.7.: Credit for excluding Personal and Advertising Injury 5% of premises/operations rate. Use endorsement CG Paragraph C.14.b. is amended to read: Will be totally excluded, with the exception of liability arising out of a hostile fire, by attaching Total Pollution Exclusion With A Hostile Fire Exception Endorsement CG to all policies; or The following is added to Paragraph C.: We are not allowing credit for any other exclusion endorsement. CG-E-8 Countrywide July 2011

9 36. DESCRIPTION OF ADDITIONAL OPTIONAL ENDORSEMENTS (Cont.) D. Special Provisions For Certain Types of Risks Endorsement The following is added to Paragraph D.: We are not charging or allowing credit for any endorsement. E. Coverage Amendment Endorsements The following is added to Paragraph E.: We are not charging or allowing credit for any endorsement. F. Amendment Of Limits Endorsements The following is added to Paragraph F.: We are not charging or allowing credit for any endorsement. G. Interline Endorsements Paragraph 9. is amended to read: To make changes to a policy use Policy Changes M ELECTRONIC DATA LIABILITY COVERAGE Rule 42. does not apply. 43. EMPLOYEE BENEFIT LIABILITY (Statistical Class Code 92100) The following paragraphs are added: D. Premium Determination 1. Base Limit: $100,000 Each Employee/$200,000 Annual Aggregate 2. Refer to Table 43.D.in the State Exception Pages for the loss cost. 3. Increased Limits: Use Table 1 (Increased limits factors also apply to the minimum premium) 4. Deductible: Always $1,000 per Employee E. Endorsements: 1. CG Employee Benefits Liability Insurance Endorsement (provides Claims-Made coverage) This endorsement contains the basic coverage. The basic coverage includes a sixty (60) day extended reporting period. 2. CG Extended Reporting Period Endorsement For Employee Benefits Liability Coverage a. For a premium charge of 100% of the annual premium, the Reporting Period can be extended up to five years upon written request from the insured within 60 days of the end of the policy period if: 1) coverage is cancelled or non-renewed for any reason except nonpayment of premium; 2) we renew or replace the coverage with other insurance which provides Claims Made coverage and has a Retroactive Date later than the one shown in the endorsement schedule; or 3) we replace the coverage with other insurance that does not apply on a Claims- Made basis. July 2011 Countrywide CG-E-9

10 44. PRODUCT WITHDRAWAL Rule 44. does not apply. 45. LIQUOR LIABILITY COVERAGE (Subline Code 332) Paragraph C. is replaced with the following: Code Number Description Loss Cost per $1000 Gross Sales Clubs $ Manufacturers, wholesalers and distributors selling alcoholic $0.035 beverages for consumption off premises Package Stores and other retail establishments selling alcoholic $0.410 beverages for consumption off premises Restaurants, taverns, hotels, motels, including package sales $ Temporary Licensees (a) Table 45.C. Liquor Liability Loss Costs Paragraph H. Special Rules Applicable To The Claims-Made Coverage Form does not apply. Paragraph J. Deductibles does not apply. 46. OWNERS AND CONTRACTORS PROTECTIVE LIABILITY B. Description Of Owners Or Contractors Protective Liability B.8. The second Paragraph is amended to read: Liability arising out of fungi or bacteria on or within a building or structure, including its contents will be excluded on all policies by attaching Fungi Or Bacteria Exclusion CG B.9. Paragraph B.9. is amended to read: Liability arising out of the design, manufacture, construction, fabrication, preparation, installation, application, maintenance or repair, including remodeling, service, correction or replacement, of any exterior insulation and finish system or any part thereof will be excluded by attaching Exclusion Exterior Insulation And Finish Systems Endorsement CG The following Paragraph is added: B.11.Liability arising out of employment related practices will be excluded on all policies by attaching Employment-related Practices Exclusion Endorsement CG C.1. The following is added to Paragraph C.1.: Loss costs for exposures in excess of $1,000,000 Total Cost will be the same as for exposures up to $1,000,000 Total Cost. C.4. Minimum premium from Premises Operations Table 2.C. will apply. I. Classifications Paragraphs 1., 2., and 4. through 11. do not apply. CG-E-10 Countrywide July 2011

11 47. POLLUTION LIABILITY COVERAGE Rule 47. does not apply. 48. PRODUCTS/COMPLETED OPERATIONS LIABILITY COVERAGE Rule 48. does not apply. 49. RAILROAD PROTECTIVE LIABILITY Rule 49. does not apply. 50. SPORTS PARTICIPANTS Rule 50. does not apply. 51. ELEVATOR OR ESCALATOR INSPECTION CHARGE Rule 51. does not apply. 52. COVERAGE FOR INSUREDS FOR INJURY TO LEASED WORKERS Rule 52. does not apply. 53. UNDERGROUND STORAGE TANK (UST) COVERAGE Rule 53. does not apply. 54. YEAR 2000 COMPUTER-RELATED ENDORSEMENTS Paragraphs A. through C. and E. through G. do not apply. July 2011 Countrywide CG-E-11

12 55. TERRORISM ENDORSEMENT OPTIONS FEDERAL BACKSTOP Rule 55. is replaced by the following: The insured will have the option of purchasing coverage for acts of terrorism except those acts committed outside the jurisdictional boundaries of the federal program or excluding all losses arising out of certified acts of terrorism and acts of terrorism committed outside the jurisdictional boundaries of the federal program. See below for a more complete description of the endorsement options. We will use the following forms: CG CG CG M3125 M2784 Exclusion Of Other Acts Of Terrorism Committed Outside The United States; Cap On Losses From Certified Acts Of Terrorism Exclusion of Certified Acts Of Terrorism And Exclusion Of Other Acts Of Terrorism Committed Outside The United States Exclusion of Terrorism Involving Nuclear, Biological Or Chemical Terrorism Policyholder Disclosure Notice of Terrorism Insurance Coverage Intent to exclude Terrorism If Use Purpose Insured elects coverage CG To provide coverage for acts of terrorism (subject to the cap on liability for losses for certified acts of terrorism and subject to underlying policy provisions), except those acts committed outside of the jurisdictional boundaries of the federal program. The exclusion for acts of terrorism committed outside the United States is subject to a $25 million threshold (valued in US dollars) for events other than nuclear, biological, chemical or radiological events. For nuclear, biological, chemical or radiological events, no dollar threshold applies. CG To exclude coverage for terrorism that involves nuclear, biological or chemical materials (thereby leaving intact any underlying coverage for terrorism that does not involve nuclear, biological or chemical material). M3125 Discloses Terrorism coverage premium Insured rejects coverage CG To exclude all losses arising out of certified acts of terrorism and acts of terrorism committed outside the jurisdictional boundaries of the federal program. The exclusion for acts of terrorism committed outside the United States is subject to a $25 million threshold (valued in US dollars) for events other than nuclear, biological, chemical or radiological events. For nuclear, biological, chemical or radiological events committed outside the United States, no dollar threshold applies. M3125 Discloses Certified Acts of Terrorism coverage is excluded M2784 Rejection form to exclude Terrorism coverage 56. INCREASED LIMITS TABLES Paragraph A.5. does not apply. CG-E-12 Countrywide July 2011

13 ADDITIONAL RULES A1. TERRORISM PREMIUM DETERMINATION A. Certified Acts Of Terrorism 1. Premium Determination a. Coverage For Certified Acts Of Terrorism Apply the factors found in Table A1.A.1.a. in the State Exception Pages to the otherwise applicable General Liability premium (excluding any additional insureds) to determine the additional premium for "certified acts of terrorism" for the year during which the coverage became effective. Each factor should be applied separately for premises/operations and productscompleted operations. "Above average" exposure classification codes are displayed in Table A1.B. Above Average Exposure Class Codes. All other classifications are "average" exposure. For sublines other than premises/operations or products/completed operations, use the average exposure category. b. Coverage For Certified Acts Of Terrorism Excluding Nuclear, Biological, Chemical And Radiological Events. Determine the additional premium for certified acts of terrorism as described in Paragraph A.1.a. Multiply the additional premium by the factor in Table A1.A.1.b. in the State Exception Pages. Terrorism premiums apply in addition to any calculated minimum premium. Refer to the State Exception Pages for charges. If the final terrorism premium is less than $0.50, no charge will be made. B. General Liability Above Average Exposure Terrorism Classifications: July 2011 Countrywide CG-E-13

14 A1. TERRORISM PREMIUM DETERMINATION (Cont.) Above Average Exposure Class Codes Classification Code Products/ Products/ Prem/Ops Classification Code Prem/Ops Completed Ops Completed Ops X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Table A1.B. CG-E-14 Countrywide July 2011

15 A1. TERRORISM PREMIUM DETERMINATION (Cont.) Above Average Exposure Class Codes Classification Code Products/ Products/ Prem/Ops Classification Code Prem/Ops Completed Ops Completed Ops X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Table A1.B. July 2011 Countrywide CG-E-15

16 ADDITIONAL OREGON MUTUAL RULES 1. ADDITIONAL RULE COMMERCIAL GENERAL LIABILITY EXPERIENCE AND SCHEDULE RATING PLAN Commercial general liability experience and schedule rating will be applied in accordance with the ISO Commercial General Liability Experience and Schedule Rating Plan with the following exceptions: A. Rule 2.F. Eligibility For Schedule Rating of ELIGIBILITY is replaced with the following: Any risk that develops an annual manual premium of $1,500 or more for the exposures to be rated shall be eligible for the application of the schedule rating modification provisions of this Plan. B. Rule 3.A. Determination Of Experience Modification of COMPANY RATE MODIFICATION is replaced with the following: The experience modification for the risk shall be determined in accordance with the experience rating procedure described in the Plan and is applied to the otherwise chargeable premium (excluding Terrorism) for the policy being rated. C. Rule 9. Schedule Rating Modifications of SCHEDULE RATING Table 9. Schedule Rating Modifications is replaced with the following: Risk Characteristic Description Range Of Modifications Credit Debit Location Exposure inside premises. Exposure outside premises. 5% 5% 5% 5% Premises Condition and care of premises. 10% 10% Equipment Type, condition and care of equipment. 10% 10% Management Cooperation in matters of safeguarding and 10% 10% proper supervision of property covered. Employees Selection, training, supervision, experience 6% 6% Cooperation Medical Facilities. Safety Program. 2% 2% 2% 2% CG-E-16 Countrywide July 2011

17 ADDITIONAL OREGON MUTUAL RULES (Cont.) 2. ADDITIONAL RULE FIXED EXPENSE CREDIT A fixed expense credit will be applied to all coverages. If there are locations in multiple states, this credit will be applied to the policy in accordance with the rules applicable to the Primary Rating State. The Primary Rating State is defined as the state with the largest exposure for the entire policy. Multiply the final policy premium by the applicable Fixed Expense Credit factor from Table 2. in the State Exception Pages. Application of the Fixed Expense Credit Factor will be the final step in the premium calculation. For policies written for a period of less than one year, the Fixed Expense Credit factor applied will be based on the short term premium rather than the full annual premium. The Fixed Expense Credit will apply to all minimum premiums except the policy writing minimum premium. The relativity for the policy will be determined at the effective date and not revised until the next effective date regardless of any policy changes. 3. ADDITIONAL RULE (a) RATES Certain classifications listed in the Rate Pages in this manual contain the designation (a) in lieu of a rate for those classifications. Refer to the Estimated Loss Potentials (ELPS) Supplement in the ISO Pages of this manual for an explanation of the nature of these (a) rates. To determine the rate to use for those classifications, use the following procedures: A. All risks with (a) rate designations are referred to the Home Office Commercial Lines Underwriting Manager for approval of the ELP. B. If the ISO ELP pages contain ELPs for the classification in question, follow the ISO ELP Rules to develop a rate. C. If there are no ELPs available at all, an adequate and equitable rate is to be developed based on the following: 1. Consider all facets of the risk. 2. Consider the riskiness of the class as a whole. 3. Consider the riskiness of the specific risk in relationship to the class as a whole. 4. Estimate the Homogeneity of the class as a whole. 5. Estimate the Reliability of the class as a whole. 6. Compare this risk with similar risks with which you are familiar. 7. Document the underwriting file with complete information and justification for the (a) rate used before submitting the risk to the Home Office Commercial Lines Underwriting Manager. July 2011 Countrywide CG-E-17

18 ADDITIONAL OREGON MUTUAL RULES (Cont.) 4. ADDITIONAL RULE PACKAGE MODIFICATION FACTORS Package modification factors will be applied in accordance with Division Nine Multiple Line Commercial Package Policy rules with the following exceptions: A. Rule 1.C. Eligibility of APPLICATION OF THIS DIVISION is replaced with the following: A Commercial Package Policy must include two or more Coverage Parts or for auto only, a Businessowners Policy must be written. B. Rule 7.A.1. Eligibility of PACKAGE MODIFICATION FACTORS is replaced with the following: Any Coverage Form in the Commercial Property Coverage Part that at least provides Building or Business Personal Property Coverage. Such coverage must be written with the 80% or higher coinsurance clause (90% for blanket insurance). The Physicians And Surgeons Equipment Coverage Form in the Commercial Inland Marine Coverage Part may be substituted for this requirement. When the Physicians And Surgeons Equipment Coverage Form is used, coverage must not be limited to cover only equipment and instruments usually carried by the insured. C. The following is added to Rule 7.B.1. Application of PACKAGE MODIFICATION FACTORS: e. Liquor Liability D. Rule 8.A.2. General of PREMIUM DEVELOPMENT is replaced with the following: If eligible (see Rules 7.A. and 7.B.), apply the appropriate Package Modification Factor(s) to individual Coverage Part rates or charges to develop the premiums for the exposures covered. Package Modification Factors are shown in Table 4. Package Modification Factors, Additional Oregon Mutual Rules in the State Exception Pages. E. Rule 8.C. Commercial General Liability Coverage Part of PREMIUM DEVELOPMENT is replaced with the following: Apply applicable Package Modification Factor to those exposures which are necessary, incidental or usual to the business operations conducted from the premises insured under direct damage forms in the Commercial Property Coverage Part Section of the policy or the Physicians And Surgeons Equipment Coverage Form. CG-E-18 Countrywide July 2011