(Richard Oliver Version) OPERATIVE CLAUSE The Underwriters will indemnify the Assured against their legal liability, whether by way of claims made against them or by way of loss or expense incurred by them for Damages and claimants costs and expenses arising as a result of: (a) (b) accidental bodily injury (including death illness or disease to any person), accidental loss of or damage to material property, which arises from or is alleged to have arisen from any defective, harmful or incorrect product or works (or any part of either) which is manufactured, designed, sold, supplied, installed, repaired, altered, treated, despatched or delivered by or on behalf of the Assured in the normal course of the Assured's Business as described in the Schedule; SPECIAL EXCLUSIONS The insurance shall not respond in respect of damage to any product or works caused by fault or defect in itself or in any part thereof. COSTS AND EXPENSES CLAUSE In addition to the Limits of Indemnity the Underwriters will pay all costs charges and expenses incurred with their written consent for the investigation defence or negotiations for the settlement of any claim notified within the terms of this insurance (whether or not such claim exceeds or is expected to exceed any Self-insured Excess or coinsurance specified in the Schedule hereto), Provided always that: (a) if any claim payment is made, the total of which exceeds the SUM of the Limits of Indemnity available hereunder plus any Self-insured excess or coinsurance specified in the Schedule this insurance shall pay only such proportion of the said costs charges and expenses as the SUM stated above bears to the total amount of such claim payment. (b) General Condition 2 of this insurance shall apply notwithstanding the foregoing. LIMITATIONS (PERIOD OF INSURANCE AND INDEMNITY LIMITS) (1) This insurance shall only apply to claims made against or loss or expense incurred by the Assured and notified by the Assured in the terms of General Condition 1 during the Period of Insurance hereto except that any subsequent claim loss or expense arising out of any circumstances notified by the Assured in the terms of General Condition 1 shall be treated as if made against or incurred by the Assured and properly notified during such Period of Insurance. (2) The maximum liability of the Underwriters other than for costs and expenses mentioned above in the Operative Clause shall not exceed respectively the Limits of Indemnity stated in the Schedule hereto. Page 1 of 7
SPECIAL CONDITION It is a condition precedent to any liability of the Underwriters under this insurance that the existence of this insurance shall not be disclosed in any advertising material, information or data sheets or similar descriptive material or in any Guarantee or similar documentation supplied by the Assured. (1) THE PROPOSAL DEFINITIONS The Proposal shall mean any single proposal form and declaration and any information supplied by or on behalf of the Assured in addition thereto and/or in substitution thereof. (2) PRODUCTS OR WORKS The terms "products" or "works" shall whenever used herein be deemed to include any advice, consultancy, design, plan, specification, formula, labelling, packing, instructions for use or similar ONLY insofar as provided in connection with or incorporated in any product supplied by or on behalf of the Assured or in connection with any works performed by or on behalf of the Assured. The Underwriters shall not be liable for: GENERAL EXCEPTIONS (1) bodily injury or damage to material property caused by any product or works which at the time of the occurrence of such bodily injury or property damage has not passed from the physical possession care custody or control of the Assured; (2) claims or liability for claims arising in connection with Products prior to their unqualified acceptance by the Assured s immediate customer acceptance being deemed to mean (a) (b) in the case of contracts for the supply only of Products the acceptance of delivery by or on behalf of the Assured's customer (where delivery to the Assured s customer is in stages and is recognised as such by the issue of delivery notes or the like acceptance of each stage so recognised shall be deemed to have taken place); in the case of any contract which requires erection construction or installation of Products by or on behalf of the Assured at the customer s premises or site the practical completion of such erection construction or installation to the satisfaction of the customer provided always that where a contract between the Assured and their customer provides for a period of testing and/or commissioning acceptance shall not be deemed to have occurred until completion of such testing and/or commissioning to the satisfaction of the customer; Page 2 of 7
(3) any costs and expenses of recall by the Assured of products or works or parts thereof unless specifically included by extension hereon; (4) death of or bodily injury (including illness or disease) to any person arising out of and in the course of his employment by the Assured under a contract of service or apprenticeship; (5) liability assumed by the Assured by agreement entered into by the Assured which would not have attached in the absence of such agreement; (6) liquidated damages, or under any penalty clause in any contract entered into by the Assured; (7) (a) loss or destruction of or damage to any property whatsoever or any loss or expense whatsoever resulting or arising therefrom or any consequential loss arising from; (b) (i) (ii) any legal liability of whatsoever nature directly or indirectly caused by or contributed to by or arising from:- ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel; the radioactive, toxic, explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof; (8) claims arising out of circumstances which the Assured is aware of prior to the commencement of the Period of Insurance shown in the Schedule and which a reasonable person in the Assured s position would anticipate might give rise to a claim against the Assured; (9) claims arising from products manufactured, designed, sold, supplied, installed, repaired, altered, treated, dispatched, delivered or distributed prior to the Retroactive Date specified in the Schedule; (10) loss or damage directly or indirectly occasioned by happening through or in consequence of war, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, military or usurped power or confiscation or nationalisation or requisition or destruction of or damage to property by or under the order of any government or public or local authority; (11) any liability arising out of any product or work which with the Assured's knowledge is intended for incorporation into the structure, machinery or controls of any aircraft, except where specifically stated to be included in the Business; (12) the excess and/or the coinsurance specified in the Schedule hereto; (13) any claim coming within the terms of this insurance which is covered by Errors and Omissions or Contract Works insurance effected by or on behalf of the Assured except for the excess over and above the amount of such claim covered by such insurance, provided always that this insurance shall not respond for the amount of any Self-insured Excess under any such insurance. Page 3 of 7
GENERAL CONDITIONS (1) Immediately upon becoming aware of any circumstances which may give rise to a claim under this insurance, irrespective of whether or not any such claim is expected to be less than any Self-insured Excess specified in the Schedule hereto, the Assured shall forthwith give written notice to the Underwriters with full particulars. Every letter, claim, writ, summons, and process shall be forwarded to the Underwriters on receipt. Written notice shall also be given to the Underwriters immediately the Assured shall have knowledge of any prosecution or inquest in connection with any event for which there may be liability under this Insurance. No admission offer promise payment or indemnity shall be made or given by or on behalf of the Assured without the written consent of the Underwriters who shall be entitled to take over and conduct in the name of the Assured for their own benefit any claim and shall have full discretion in the conduct of any proceedings and in the settlement of any claim. The Assured shall give such assistance as the Underwriters may reasonably require. (2) In connection with claims hereunder arising out of one occurrence or series of occurrences consequent upon or attributable to one source or original cause the Underwriters may at any time pay to the Assured the Limits of Indemnity (after deduction of any sums already paid) or any less amount for which such claims can be settled and thereupon the Underwriters shall relinquish the control of such claims and be under no further liability under this insurance except for costs and expenses for which the Underwriters may be responsible under this insurance in respect of matters prior to the date of such payment. (3) If any part of the Premium or Renewal Premium is based on estimates furnished by the Assured the Assured shall keep a record containing all relative particulars and shall allow the Underwriters to inspect such record. The Assured shall after the expiry of each Period of Insurance furnish such information as the Underwriters may require. The Premium or Renewal Premium shall thereupon be adjusted and the difference paid by or allowed to the Assured, subject to the retention by the Underwriters of any minimum premium indicated in the Schedule. (4) Where there is more than one Assured the Underwriters agree that this insurance shall be considered as applying to each Assured as though a separate insurance had been issued to each provided always that the Underwriters' total liability shall not exceed the Limits of Indemnity. (5) The Underwriters may cancel this insurance by sending thirty days notice to the Assured at the Assured's last known address. The Assured shall thereupon become entitled to a proportionate return of premium. (6) In the event of cancellation or non-renewal of this insurance the liability of the Underwriters shall cease outright on the date upon which the notice takes effect or upon the date of expiry except in respect of any circumstances or claims notified to the Underwriters during the currency of the insurance which remain unsettled at that date. (7) If any difference shall arise as to the amount to be paid under this insurance such difference shall be referred to the decision of an Arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator to the decision of two Arbitrators one to be appointed by each of the parties in writing or in the case of disagreement of an Umpire appointed by the Arbitrators in writing before entering upon the Reference. The costs of the Reference and of the Award shall be in the discretion of the Arbitrator/Arbitrators or Umpire making the Award whose Page 4 of 7
Award shall be a condition precedent to any right of action against the Underwriters in respect of any claim. (8) The Assured shall take all reasonable steps to prevent or diminish any loss which might give rise to a claim hereunder. (9) Regardless of the number of years this insurance or any succeeding insurance of like nature with the Underwriters shall continue in force and the number of premiums which shall be paid or payable, the Liability of the Underwriters as specified in this insurance shall not be cumulative in amounts from year to year or from period to period and a loss shall be deemed to attach to the insurance current at the first date of discovery of the loss, or part thereof, and the insurance limit in effect at that time shall prevail. (10) The Assured shall as soon as is reasonable give to the Underwriters full particulars in writing of any material increase in the risk and shall pay such reasonable additional premium, if any, as may be required by the Underwriters. (11) This insurance does not cover any loss or damage which at the time of the happening of such loss or damage is insured by or would, but for the existence of this insurance, be insured by any other existing insurance except in respect of any excess beyond the amount which would have been payable under such other insurance had this insurance not been effected. (12) USA/Canada Conditions In respect of any judgement, award or settlement made against the Assured in the United States of America and/or Canada (or to any order made anywhere in the world to enforce such judgement, award or settlement either in whole or in part) the three undernoted clauses shall apply:- 1) Punitive and Exemplary Damages Exclusion Clause Regardless of any other provision of this insurance, this insurance does not apply to punitive or exemplary damages. 2) Regardless of any other provision of this insurance, all costs, charges and expenses incurred with the written consent of the Underwriters for the investigation defence or negotiations for the settlement of any claim notified within the terms of this insurance shall form part of such sums as may exhaust any self-insured excesses applicable herein and shall be included within the Limits of Indemnity specified herein. 3) Industries, Seepage, Pollution and Contamination Exclusion Clause No. 4 This insurance does not cover any liability for: (1) personal injury or bodily injury or loss of, damage to or loss of use of property directly or indirectly caused by seepage, pollution or contamination; (2) the cost of removing, nullifying or cleaning-up seeping, polluting or contaminating substances; (3) fines, penalties, punitive or exemplary damages. MEMORANDA Page 5 of 7
MEMORANDUM No. 1 TERRORISM EXCLUSION ENDORSEMENT It is understood and agreed that the following Terrorism Exclusion Endorsement is applicable to this insurance: TERRORISM EXCLUSION ENDORSEMENT Notwithstanding any provision to the contrary within this insurance or any endorsement thereto it is agreed that this insurance excludes liability for injury, loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, arising out of, 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 endorsement an act of terrorism means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organisation(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 endorsement also excludes liability for injury, loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, arising out of, 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 Underwriters allege that by reason of this exclusion, any injury, loss, damage, cost or expense is not covered by this insurance the burden of proving the contrary shall be upon the Assured. In the event any portion of this endorsement is found to be invalid or unenforceable, the remainder shall remain in full force and effect. NMA2920 (amended) 08/10/2001 MEMORANDUM No. 2 PRINCIPALS CLAUSE It is understood and agreed that the following Principals Clause is applicable to this insurance: PRINCIPALS CLAUSE As far as is necessary to meet the requirements of any contract or agreement entered into by the Assured with any Principal the Underwriters will at the request of the Assured treat the Principal as though he were the Assured in respect of liability arising out of the performance of such contract or agreement provided that the Principal shall observe fulfil and be subject to the terms of this Insurance insofar as they can apply. MEMORANDUM No. 3 LIMITED USA/CANADA DOMICILED OPERATIONS EXCLUSION Page 6 of 7
Notwithstanding anything contained herein to the contrary, cover of this insurance is not provided in respect of that part of any declaration having operations domiciled in the United States of America and/or Canada. All other terms and conditions remain unaltered. Page 7 of 7