Insurance terms and conditions Consultant s Professional Indemnity/General Commercial Liability Insurance This is a translation of the original Danish insurance terms and conditions. In case of discrepancies, the wording of the Danish original shall prevail. Insurance terms and conditions no. 66-2 Insurance pursuant to cooperation agreement between the Danish Association of Architectural Firms (DANSKE ARK) and TrygVesta (Tryg). The insurance is subject to the current provisions of Danish Insurance Contracts Act in force, insofar as t have not been derogated from in the general and sp terms and conditions. Contents Section Contents Section Scope of cover 1 Cancellation of the insurance after a claim 10 Insurance period 2 Calculation of premium 11 Geographical area covered 3 Adjustment of premium 12 Exclusions 4 Payment of premium 13 Policy limits 5 Several occurrences of damage/injury/loss 14 Deductibles 6 Claims procedure 15 Value added tax (VAT) 7 Other insurance covering the same risk 16 Change in corporate structure 8 Run-off cover 17 Inception of the insurance 9 Governing law and venue 18 Section 1 Scope of cover The insurance covers the liability to pay damages, including the general commercial liability which the Insured may incur as a result of liability-entailing behaviour on the part of the Insured in connection with the work in the company. For the purpose of these insurance terms and conditions, the Insured is understood to mean the Policyholder performing architectural activities as well as the employees of the company. General commercial liability is understood to mean the Insured s liability to pay damages for bodily injury or property damage caused during performance of the activities of the company, as specified in the policy, and which do not relate to any consultancy services, as well as the liability to pay damages imposed on the Insured as owner or user of building or land used for running the company. Within the limits of the cooperation agreement and otherwise stipulated in the terms and conditions and without the sums insured being increased thereby, the insurance has been extended to cover the liability which may be imposed on the Insured for bodily injury or property damage caused by the Insured s subconsultants. Tryg has, however, a valid legal right of full subrogation against the Insured s subconsultants. It is a condition that the Insured ensures that the respective subconsultants have taken out and paid ordinary liability insurance for engineers and/or architects at the time when the agreement was made.
Section 2 Insurance period The insurance covers claims for damages made against the Insured during the insurance period. A claim for damages will be considered to have been made against the Insured at the earlier of the following points in time: a At the time when the Insured receives the first written notification of a claim for damages. b At the time when the Insured acquires knowledge for the first time that damage, injury or loss has occurred, or that there is an imminent danger of an occurrence of damage, injury or loss which may be caused by the Insured s acts or omissions. Cover is not provided for claims for damages made against the Insured during the insurance period but notified to the Insurer more than 3 months after expiry of the insurance. Even though a claim for damages made against the Insured during the insurance period in accordance with subs. 2(b) has been notified in time to the Insurer, cover is only provided if the Insured has received a written notification of a claim for damages 2 years after expiry of the insurance, at the latest. The insurance does not cover claims for damages made against the Insured prior to the inception of the insurance. Section 3 Geographical area covered The insurance covers the architect s liability for damage/injury/loss occurring worldwide, excluding the USA/Canada. a Irrespective of s. 92 of the Danish Insurance Contracts Act, costs and interest on damages which the Insured has been ordered to pay are only covered outside Europe to the extent that the policy limits are not exceeded thereby. Section 4 Exclusions The insurance does not cover the following: a Guarantee Claims which are based solely on the Insured having assumed liability which extends beyond that provided by the general law of damages applying to consultancy services. This also applies to any promise of payment of indemnity exceeding the indemnity which should have been paid, had the promise not been made. b Promise regarding price and time Claims which are based solely on a promise of the extent of expenses in connection with construction of a building/completion of a project, or of the time frame relating to such building/project being incorrect. c New plans and design Loss sustained by the Policyholder in case of damage/loss and which results from the time required in order for the company to clear up and repair, including making new plans and design as well as supervision in this relation. d Custody Damage to property and loss resulting from damage to property which the Insured has borrowed, rented, is storing, using, transporting or for any other reason has in custody or possession. e Intent, gross negligence Damage, injury or loss caused deliberately or by gross negligence on the part of the Insured. 2
f Special basis of liability Damage, injury or loss caused by motor-driven vehicles, watercraft or aircraft. g Other activities Damage, injury or loss caused by the work of contractors, suppliers or other production companies. h Administration of real property Damage or loss caused by the administration of real property which is not connected to the completion of a construction project. i Own property Damage to property and loss resulting from damage to property belonging to the Policyholder. j Mixed interests Claims stemming from the Insured or from companies in which the Insured has direct or indirect financial interests or from companies which have direct or indirect financial interests in the Insured, and where the Insured or the company is the claimant in the capacity of participant in a construction work or project as principal, seller, lessor, contractor, producer or the like. k Fines or the like Fines or the like, including punitive damages, whether payable to public authorities or private individuals. l Expenses Expenses in connection with determining the question of damages unless they have been paid subject to prior approval from Tryg. m Copyright etc. Irrespective of the sums insured under the policy, the insurance only covers up to DKK 2.5m in connection with claims in relation to the violation of copyright, design and trademark rights and other intellectual property rights. n Asbestos Irrespective of the sums insured under the policy, the insurance only covers claims up to DKK 2.5m in connection with bodily injury or property damage originating from the exposure to asbestos. Section 5 Policy limits Cover under the insurance is provided in accordance with the policy limits stated in the policy. Furthermore, the general commercial liability is covered in accordance with the policy limits stated in the policy. 3
Section 6 Deductibles The Policyholder must pay the deductible stated in the policy relating to any property damage and/or any loss, including any litigation interest. Where a claim for damages does not exceed the deductible, any future litigation interest and expenses incurred will not be of relevance to the insurance. Any expenses incurred by the Policyholder for own technical expert opinion and own legal assistance are not of relevance to the Insurer irrespective of whether such expenses and the indemnity amount in total exceed the deductible. In relation to Groups, the cover is only subject to one deductible per insurance event. Where it is impossible to hold one company liable, the deductible relating to an insurance event will be fixed at the highest amount of deductible for the involved companies. Subs. 5 The deductible stated in the policy is conditional upon the existence of an agreement containing a limitation of liability limited to a duration of 5 years and an exclusion of liability regarding loss corresponding to subs. 6.2.3.1 and subs. 6.2.4 of ABR 89 (The general conditions for consulting services). However, this requirement does not apply to assignments carried out for a consumer. For assignments carried out for a consumer, the deductible stated in the policy will be conditional upon the consultant s liability not extending beyond a period of 10 years in pursuance of the Danish Limitation Act. As regards structural survey reports, the deductible stated in the policy will apply to the extent that the consultant s liability does not extend beyond the liability period stipulated in Act no. 391 of 14 June 1995 on consumer protection in connection with acquisition of real property etc. Subs. 6 Where no such agreement exists, the Policyholder must pay the deductible stated in the policy with addition of 25% of that part of the indemnity for which no liability to pay damages would have existed insofar as the above-mentioned limitations of liability had been agreed upon. The additional charge is limited to the chosen deductible and cannot exceed 3% of the chosen policy limit irrespective of the amount of the deductible. Subs. 7 Where any property damage and/or loss exceeds the policy limit, including the deductible, the policy limit will be paid without any deduction. Tryg will pay all expenses for own technical expert opinion and legal expenses; cf. s. 15, subs. 1, even though the indemnity amount exceeds the policy limit; see, however, s. 3, subs. 1(a). Subs. 8 The provisions on the deductible do not apply to bodily injury or loss resulting from bodily injury as well as general commercial liability damage. Subs. 9 For structural survey reports prepared in accordance with the Danish Act no. 391 of 14 June 1995 on consumer protection in connection with acquisition of real property etc., the Policyholder is liable to pay maximum one deductible per report. Section 7 Value added tax (VAT) In accordance with current legislation, value added tax is payable by the Policyholder to the extent that he/she is able to deduct the amount from his/her VAT accounts towards the Danish tax authorities (SKAT). 4
Section 8 Change in corporate structure Where an architectural company 1. enters into partnership with new partners 2. is merged with, transferred to, or taken over by another architectural company comprised by the agreement, e.g. due to a merger 3. is converted from/into a sole proprietorship, partnership, private limited company or a limited liability company, DANSKE ARK and Tryg must be informed of any structural changes. The above-mentioned structural changes do not limit the Policyholder s possibility of negotiation of changes to the insurance cover. In case of any other structural changes than the ones mentioned, the terms and conditions for the continuation of the insurance will be settled between Tryg and DANSKE ARK. Tryg will continue the insurance after the structural change and will cover damage/injury/loss from the period prior to the structural change in the same way as if it had not taken place. Section 9 Inception of the insurance When an insurance agreement has been accepted by Tryg, the insurance will enter into force as from the date which is specified in the proposal form. The insurance cover is conditional upon payment of membership fee to DANSKE ARK and insurance premium to Tryg. Section 10 Cancellation of the insurance after a claim After any reported claim for damages, and prior to agreement with DANSKE ARK, Tryg may cancel the insurance subject to 30 days notice; cf. the cooperation agreement. In case of cancellation, Tryg must refund the share of the premium which has not been used. The right to cancel the insurance will lapse 30 days after payment of the indemnity or after Tryg has rejected a claim for damages. Section 11 Calculation of premium The premium is calculated on the basis of the gross fee turnover, excluding VAT for the respective insurance year; cf. the cooperation agreement. Section 12 Adjustment of premium The premium will be adjusted annually based on the information stated in a form which the Policyholder must fill in and send to Tryg no later than 3 weeks after receipt; cf. the cooperation agreement. Where the information form has not been returned within the time limit specified, the premium will be calculated in accordance with special agreement between Tryg and DANSKE ARK. 5
Section 13 Payment of premium Tryg will collect the premium by sending or delivering a giro transfer form to the Policyholder, i.e. to the address specified by the Policyholder. The first premium will be due and payable upon receipt of the giro transfer form, and subsequent premiums will be due and payable at the dates stipulated. If the premium is not paid after the first demand for payment, Tryg will send a reminder to the Policyholder at the payment address. The reminder will be sent 14 days, at the earliest, after the first demand for payment, and if payment is not made within 14 days after the reminder has been sent, DANSKE ARK will be informed, and the second reminder will be sent. Where payment is still not made within 14 days after the second reminder has been sent, the insurance will be deleted prior to agreement between Tryg and DANSKE ARK. Where Tryg has sent a reminder, Tryg is entitled to collect service charges as well as interest. Section 14 Several occurrences of damage/injury/loss Several occurrences of damage, injury or loss The circumstance that the Insured during his/her resulting from the same liability-entailing error are supervision misses the respective errors is, considered to be one and the same insurance however, not considered to be an independent event if they originate from one single assignment insurance event. carried out for one single client in accordance with one single contract. Section 15 Claims procedure As soon as the Policyholder becomes aware or has reason to believe that a claim will be made against the company, the Policyholder must immediately notify Tryg thereof in writing; cf. s. 2. Subsequently, Tryg will decide how the Policyholder s interests are to be protected, unless the claim for damages is not considered relevant under the insurance due to the provisions on the deductible. The Policyholder must provide Tryg with any assistance necessary for the elucidation and settlement of the case. The Policyholder is not entitled to pay damages or accept any liability to pay damages with binding effect on Tryg, unless the Policyholder merely fulfils his/her legal obligations when doing so. The Policyholder must assist Tryg in the reestablishment after damage or loss for which the company is responsible, by. a the performance of the necessary calculation and/or project work, and b the management and provision of the practical measures which the reestablishment involves, including the customary supervision of the repair of the damage and the work initiated to limit the loss. Subs. 5 The time when a claim for damages is made determines the policy limit and deductible in connection with the respective insurance event; cf. subs. 1. Subs. 6 Where Tryg has paid damages, Tryg will be subrogated to the rights of the Policyholder against any third party. 6
Section 16 Other insurance covering the same risk The insurance does not cover claims which are covered under: 1. project indemnity insurance, 2. other consultant s professional indemnity insurance for house inspections/structural survey reports in accordance with Act no. 391 of 14 June 1995 3. any other special insurance scheme or agreement. This limitation applies irrespective of whether the policy limits of the insurances specified under items 1-3 have been spent or are lower than the amount awarded, or the claim is not covered in accordance with the terms and conditions applying to the respective insurances. Section 17 Run-off cover a Where a company covered under the present insurance agreement stops running consulting architectural activities, the insurance will be cancelled simultaneously. Tryg will cover liability to pay damages for 5 years from the date of expiry in relation to claims made and reported resulting from events causing damage/injury and omissions occurring within the period from the inception of the insurance and until the date of expiry. For assignments carried out for consumers, Tryg will provide cover in 10 years as from the date of expiry. However, maximum for 5 years after termination of the cooperation agreement. c The run-off cover is conditional upon the management responsible for the company declaring solemnly in writing that they are not aware of any circumstances which may currently or subsequently result in any claim for damages being made in accordance with the insurance terms and conditions, and furthermore, that they are aware that the run-off cover will lapse immediately if the architectural activities are resumed. d Where the company ceases its activities due to liquidation or suspension of payment, Tryg and DANSKE ARK will agree on the terms and conditions for the establishment of the run-off cover and any additional premium. As regards structural survey reports, Tryg will provide cover during a period corresponding to the statutory liability period. The five-year cover is, however, conditional upon the acceptance from DANSKE ARK in connection with each and every event, and furthermore, it will be subject to the following guidelines: b Tryg will solely cover the liability to pay damages plus any expenses and interest in pursuance of the provisions of the expired insurance, including policy limit and deductible. Section 18 Governing law and venue Any disputes arising out of or in connection with this insurance agreement shall be settled according to Danish law and by Danish courts of law. 7