2015 Liability Protection Agreement Schedule B of the Reciprocal Insurance Exchange Agreement

2015 Liability Protection Agreement Schedule B of the Reciprocal Insurance Exchange Agreement Table of Contents Table of Contents... i DECLARATIONS PAGE... 1 Agreement Preamble... 1 Insured Party... 1 Agreement Period... 1 Coverages and Limits of Insurance... 1 COVERAGE A: BODILY INJURY, PERSONAL INJURY AND/OR PROPERTY DAMAGE... 2 Coverage Agreement... 2 Exclusions:... 2 Aircraft, airport, airstrip... 2 War, invasion, hostilities, etc.... 2 Commercial marine facility... 2 Watercraft... 2 Nuclear hazards... 2 Intentionally caused... 2 Contract, liability assumed under... 2 Automobile... 3 Medical Services... 3 Property in Care, Custody or Control... 3 Property owned... 3 Property rented or leased... 3 Aircraft in the care, custody or control... 3 Fines or penalties... 4 Worker s compensation, unemployment compensation... 4 Termination of employment... 4 Personal Injury by one Insured Party against another Insured Party... 4 Punitive, Exemplary, Aggravated Damages... 4 Asbestos... 4 Pollution Liability... 4 Fungi... 6 Building Envelope... 6 Terrorism... 7 Cyber risks... 7 COVERAGE B: ERRORS AND OMISSIONS... 8 Coverage Agreement... 8 Exclusions:... 8 Dishonest, Intentional or malicious acts... 8 Assumed Liability of Others... 8 Contract, breach of... 8 Payment or Repayment for Benefit Improperly Received... 8 Termination of employment... 9 Fines or penalties... 9 Purchase and sale of securities... 9 Failure to effect and maintain adequate insurance... 9 Aircraft, airport, airstrip... 9 Page - i

Intentionally Acts... 9 Punitive, Exemplary, Aggravated Damages... 9 Medical Services... 9 Commercial marine facility... 9 Watercraft... 10 Asbestos... 10 Pollution... 10 Fungi... 11 Building Envelope... 11 Terrorism... 12 Cyber Risks... 12 COVERAGE C: SUPPLEMENTARY PAYMENTS: DEFENCE AND OTHER COSTS... 13 Coverage Agreement... 13 1(a) Defence... 13 1(b) Cost and Interest... 13 2) Right to Defend... 13 3(a) Indemnification,... 13 Negotiation... 13 3(b) Medical Expense... 13 GENERAL CONDITIONS... 14 Limits of Liability... 14 Cross Liability... 14 Notice of Claim or Suit... 14 Assistance and Cooperation... 14 Deductible and Amount Payable... 14 Subrogation... 15 Assignment... 15 Cancellation, Termination... 15 Truth of Statements in Membership Application... 15 Proceedings Against the Association... 16 Agreements of an Insured Party... 16 Other Insurance... 16 Coverage Extended to Additional Named Insured... 16 Gender and Number... 18 DEFINITIONS... 19 Additional Named Insured... 19 Agreement... 19 Agreement Period... 19 Automobile... 19 Bodily Injury... 19 Employee Benefit Program... 19 Employee Benefit Administration... 19 Insured Party... 20 Loss... 21 Mutual Aid Agreement... 21 Nuclear Hazard... 22 Occurrence... 22 Page - ii

Personal Injury... 22 Property Damage... 23 Reciprocal Insurance Exchange Agreement... 23 Subscriber... 23 Subscribers... 23 EXTENSION OF COVERAGE ENDORSEMENTS... 24 Asbestos, Fungi, Terrorism, Cyber Risks Endorsement... 24 Forest Fire Fighting Expenses Endorsement... 24 Pollution Liability Endorsement... 24 Page - iii

DECLARATIONS PAGE Agreement Preamble In consideration of assessments paid or due, the Municipal Insurance Association of B.C. (the Association ) agrees to provide protection to Subscribers and other Insured Parties in accordance with the terms and conditions of this Agreement. Insured Party INSURED PARTY: Subscribers as identified in Certificates of Insurance issued under this Agreement and other Insured Parties as defined in this Agreement. Agreement Period AGREEMENT PERIOD: January 1, 2015 to January 1, 2016 or as shown in a Certificate of Insurance issued under this Agreement. Coverages and Limits of Insurance COVERAGE A: COVERAGE B: Bodily Injury, Personal Injury, and/or Property Damage Liability including non owned auto Limit of Liability: $35,000,000 for each Occurrence for each subscribing member including damages and Allocated Loss Expenses (ALE) combined. Errors and Omissions Liability Limit of Liability: $35,000,000 for each Loss for each subscribing member including damages and Allocated Loss Expenses (ALE) combined. This coverage (B) is afforded on a claims made basis COVERAGE C: Supplementary Payments: Defence and Other Costs This agreement contains special reporting time limits under pollution liability. Extension of Coverage Endorsements include: asbestos; cyber risk; terrorism; fungi; forest fire fighting expenses; where lower limits of liability coverage apply. Page - 1

COVERAGE A: BODILY INJURY, PERSONAL INJURY AND/OR PROPERTY DAMAGE Coverage Agreement Coverage Agreement: The Association agrees to pay on behalf of an Insured Party (as defined) all sums which an Insured Party becomes legally obliged to pay as damages for: a) Bodily injury (as defined), sustained by any person or persons; b) Personal injury (as defined), sustained by any person or persons; c) Property damage (as defined); caused by an Occurrence during the Agreement Period. Exclusions: Exclusions: 1. This coverage does not apply to bodily injury, personal injury or property damage: Aircraft, airport, airstrip War, invasion, hostilities, etc. Commercial marine facility Watercraft a) arising from the ownership, maintenance, operation or use by or on behalf of an Insured Party of any aircraft, airport, airstrip or air cushion vehicle; b) arising from war, invasion, hostilities (whether war is declared or not), acts of foreign enemies, civil war, rebellion, revolution or insurrection; c) arising either in whole or in part from the ownership, maintenance, operation by or on behalf of the Insured Party of any commercial marine facility; d) arising from the ownership, operation, charter or use by the Insured Party of any watercraft except: i) police boats, fire boats and rescue craft operated by an Insured Party; ii) watercraft less than 15 meters in length and which carry fewer than twelve passengers; iii) other watercraft provided they are not owned or operated by the Insured Party or its employees. Nuclear hazards Intentionally caused Contract, liability assumed under e) arising from nuclear hazards as defined; f) caused by an intentional or criminal act; g) where such liability arises from liability assumed under contract which makes an Insured Party responsible for the sole negligence of another person, unless such liability is assumed under a Mutual Aid Agreement or a Service Providers Agreement; Page - 2

Automobile h) sums which Medical Services i) due to; i) An Insured Party becomes legally obligated to pay as damages arising from the use or operation of any automobile owned in whole or in part by or licensed in the name of the subscribing member. ii) An Insured Party becomes legally obligated to pay as damages arising from the use of or operation of any automobile owned in whole or in part by or licensed in the name of that Insured Party; except that this Agreement shall cover liability arising out of machinery or apparatus, including its equipment, mounted on or attached to an automobile while such machinery or apparatus is in actual use or operation; i) the rendering of or failure to render: a) medical, surgical, dental, x-ray or nursing service or treatment, or the furnishing of food or beverages in connection therewith, or b) any service or treatment conducive to health or of a professional nature, or c) any cosmetic or tonsorial service or treatment; ii) the furnishing or dispensing of drugs or medical, dental, surgical supplies or appliances; iii) the handling of deceased human bodies or performing of autopsies thereon. It is understood and agreed that this exclusion shall only apply to Medical Doctors. Medical Doctors shall not mean to include Physiotherapists or Medical Health Officers. 2. This coverage does not apply to property damage to: Property in Care, Custody or Control Property owned Property rented or leased Aircraft in the care, a) personal property in the care, custody, or control of an Insured Party or as to which an Insured Party is for any purpose exercising physical control. b) property owned by an Insured Party; c) property rented or leased to an Insured Party, where the Insured Party has by contract assumed liability for damage or destruction of such property, unless the Insured Party would have been liable in the absence of such assumption of liability; d) aircraft in the care, custody or control of an Insured Party. Page - 3

custody or control Fines or penalties Worker s compensation, unemployment compensation Termination of employment Personal Injury by one Insured Party against another Insured Party Punitive, Exemplary, Aggravated Damages Asbestos 3. This coverage does not apply to: a) fines or penalties by reason of failure to comply with any statute, rule, regulation or order; b) any obligation for which an Insured Party is or may be held liable under any worker s compensation, unemployment compensation, or disability benefits legislation or law, or under any similar legislation or law excepting liability imposed by common law; c) liability to an employee or a former employee of an Insured Party arising out of the actual, alleged, threatened or constructive termination of the employment of that employee or former employee. d) liability for claims brought by one Insured Party against another Insured Party for Personal Injury, except that this exclusion shall not apply to any such claims by former members, officers or employees of an Insured Party with respect to an occurrence taking place after the date of termination of their appointment or employment by an Insured Party. e) liability for punitive, exemplary or aggravated damages except that the Association will defend any claim alleging such liability but will not indemnify for any such liability. 4. This coverage does not apply to: a) Asbestos Liability It is hereby understood and agreed that this coverage shall not apply to and does not cover any actual or alleged liability whatsoever for any claim or claims in respect of loss or losses, damage, cost or expense directly or indirectly caused by, resulting from or in consequence of, or in any way involving asbestos, or any materials containing asbestos in whatever form or quantity. This exclusion applies regardless of any other contributing or aggravating cause or event that contributes concurrently or in any sequence to the loss, damage, cost or expense. Pollution Liability 5. This coverage does not apply to: a) Pollution Liability i) Claims in which it is alleged that an error, omission, act, or breach of duty of an Insured Party caused or contributed to the actual, alleged or threatened release, escape, discharge, dispersal or presence of a Pollutant or Pollutants. ii) An Insured Party s direct or indirect Regulatory Liability. iii) Claims of another party for indemnity or contribution for that other party s Regulatory Liability. Page - 4

iv) Arising out of the actual, alleged or threatened release, escape or discharge of pollutants: a) at or from any site or location used by or for an Insured Party or others for the handling, storage, disposal, processing or treatment of solid waste; b) which are at any time transported, handled, stored, treated, disposed of, or processed as solid waste by or for an Insured Party or any firm or organization for whom an Insured Party may be legally responsible. b) Clause (a) i) shall not apply to: i) Claims arising by reason of the release, escape, discharge or dispersal of a Pollutant or Pollutants caused directly and solely by an Insured Party, provided: (a) such release, escape, discharge, or dispersal is detected by an Insured Party within 240 hours after the commencement of the release, escape, discharge or dispersal, and is reported to the Association within 120 hours of being so-detected; and (b) such release, escape, discharge or dispersal is unintended and unexpected. c) Clauses (a) i), and (a) iv) shall not apply to: i) That portion of any claim for damages where the damages have been caused directly and solely by heat, smoke, or fumes from a Hostile Fire; explosion; collision; falling object; lightning; windstorm; acts of vandalism; sabotage; or malicious mischief neither expected nor intended from the standpoint of an Insured Party. d) Fines, penalties, punitive or exemplary damages arising directly or indirectly out of the discharge, dispersal, release or escape of any pollutants. e) For the purpose of this exclusion, the following definitions shall apply: i) Pollutant or Pollutants: any solid, liquid, gaseous, thermal or electromagnetic irritant or contaminant, either naturally occurring or otherwise, and including but not limited to smoke, vapour, soot, fumes, acids, alkalis, chemicals, waste, ureaformaldehyde, and electromagnetic currents. Waste includes materials to be recycled, reconditioned or reclaimed. The term Pollutant or Pollutants includes a potential or alleged Pollutant or Pollutants. ii) Regulatory Liability: any liability for losses, cost, or expense arising Page - 5

directly or indirectly out of any statutory requirement or governmental order, action, direction, or request to test for, investigate, monitor, cleanup, remove, relocate, contain, treat, detoxify, decontaminate, or neutralize a Pollutant or Pollutants. iii) Hostile Fire: a fire which becomes uncontrollable or breaks out from where it was intended to be. Fungi 6. This coverage shall not apply to: a) bodily injury, property damage, personal injury, or Medical payments or any other cost, loss or expense incurred by others, arising directly or indirectly, from the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, presence of, spread of, reproduction, discharge or other growth of any fungi or spores however caused, including any costs or expenses incurred to prevent, respond to, test for, monitor, abate, mitigate, remove, cleanup, contain, remediate, treat, detoxify, neutralize, assess or otherwise deal with or dispose of fungi or spores. b) Any supervision, instructions, recommendations, warnings, or advice given or which should have been given in connection with a) above; or c) Any obligation to pay damages, share damages with or repay someone else who must pay damages because of such injury or damages referred to in a) or b) above. This exclusion applies regardless of the loss or damage, other causes of the injury, damage, expense or costs or whether other causes acted concurrently or in any sequence to produce the injury, damage, expenses or costs. For the purpose of this exclusion, the following definitions are added: Fungi includes, but is not limited to, any form or type of mould, yeast, mushroom, or mildew whether or not allergenic, pathogenic or toxigenic, and any substance, vapour or gas produced by, emitted from or arising out of any Fungi or Spores or resultant mycotoxins, allergens, or pathogens. Spores includes, but is not limited to any reproductive particle or microscopic fragment produced by, emitted from or arising out of any fungi. Building Envelope 7. This coverage does not apply to any obligation of an Insured Party to pay damages as a result of: (a) the presence of or infiltration of moisture into a building envelope; (b) the presence of or infiltration of moisture into any other component of a building from the building envelope; or Page - 6

(c) the presence of or infiltration of moisture into a building as a result of a failure of a building envelope. In this exclusion Building Envelope shall mean that portion of a building comprised of the exterior wall and its elements, the interior wall and its elements, and all component parts of the wall cavity and framing between the exterior wall and the interior wall. Terrorism 8. This coverage does not apply to Bodily Injury, Personal Injury or Property Damage arising directly or indirectly, in whole or in part, out of Terrorism or out of any activity or decision of a government agency or other entity to prevent, respond to or terminate Terrorism. This exclusion applies regardless of any other contributing or aggravating cause or event that contributes concurrently or in any sequence to the Bodily Injury, Personal Injury or Property Damage. Terrorism means an ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or threat of violence or force, committed by or on behalf of any group(s), organization(s) or government(s) for the purpose of influencing any government and/or instilling fear in the public or a section of the public. Cyber risks 9. This coverage does not apply to Bodily Injury, Personal Injury or Property Damage arising from: a) erasure, destruction, corruption, misappropriation, misinterpretation of Data ; b) erroneously creating, amending, entering, deleting, or using Data ; c) the distribution or display of Data, by means of an Internet Website, the Internet, an intranet, extranet, or similar device or system designed or intended for electronic communication of Data ; Data means representations of information or concepts in any form. Page - 7

COVERAGE B: ERRORS AND OMISSIONS Coverage Agreement Coverage Agreement: The Association agrees to pay on behalf of an Insured Party (as defined) all sums which an Insured Party becomes obligated to pay by reason of the liability imposed upon an Insured Party by law for damages resulting from any claim made against an Insured Party arising from an act, error, omission or breach of duty committed by an Insured Party; provided such claims to recover are made: a) against an Insured Party within the Agreement Period and immediately notified to the Association; or, b) following termination of the Agreement, provided written notice of i) any potential claim or of any error, omission or act which might give rise to a claim for damages for which coverage would be afforded under this policy; or, ii) any allegation of any fault, error, omission or act which might give rise to a claim for damages for which coverage would be afforded under this policy; is received from an Insured Party by the Association during the Agreement Period, or within 60 days of its expiry. Exclusions: Exclusions: 1) This coverage does not apply to liability for: Dishonest, Intentional or malicious acts Assumed Liability of Others Warranties or Guarantees a) bodily injury, personal injury, or property damage; b) damages arising from dishonest, intentional or malicious acts or misconduct; c) the assumed liability of others under any contracts or agreements, unless the insured is contributorily liable. This exclusion shall not apply to liability assumed under a Mutual Aid Agreement or a Service Providers Agreement; d) express warranties or guarantees, unless the Insured Party s liability would exist in the absence of any such warranty or guarantee; Payment or Repayment for e) compensating a claimant for any property, profit or advantage gained or acquired by an Insured Party where Page - 8

Benefit Received Termination of employment Fines or penalties Purchase and sale of property Failure to effect and maintain adequate insurance Aircraft, airport, airstrip Intentionally Acts Punitive, Exemplary, Aggravated Damages Medical Services the Insured Party is not legally entitled to any such property, profit, advantage or remuneration; f) liability to an employee or former employee of an Insured Party arising out of the actual, alleged, threatened or constructive termination of the employment of that employee or former employee; g) fines or penalties; h)damages arising out of any transaction relating to the purchase or sale of any real or personal property or interests therein; i) any failure or omission on the part of an Insured Party to effect and maintain adequate insurance, except with respect to an employee benefit program and employee benefit administration (as defined); j) damages arising from the ownership, maintenance, operation or use by or on behalf of an Insured Party of any aircraft, airport, airstrip or air cushion vehicle; k) damage caused intentionally by or at the direction of an Insured Party except when caused to protect persons or property. l) punitive, exemplary or aggravated damages, except the Association will defend any claim alleging such liability but not indemnify for any such liability; m) claims arising out of: i) the rendering of or failure to render: a) medical, surgical, dental, x-ray or nursing service or treatment, or the furnishing of food or beverages in connection therewith, or b) any service or treatment conducive to health or of a professional nature, or c) any cosmetic or tonsorial service or treatment; ii) the furnishing or dispensing of drugs or medical, dental, surgical supplies or appliances; iii) the handling of deceased human bodies or performing of autopsies thereon. This exclusion shall only apply to Medical Doctors. Medical Doctors does not include Physiotherapists or Medical Health Officers. Commercial marine facility n) arising either in whole or in part from the ownership, maintenance, operation by or on behalf of the Insured Party of any commercial marine facility; Page - 9

Watercraft o) arising from the ownership, operation, charter or use by the Insured Party of any watercraft except: i) fire boats and rescue craft operated by an Insured Party; ii) watercraft less than 15 meters in length and which carry fewer than twelve passengers; iii) other watercraft provided they are not owned or operated by the Insured Party or its employees. Asbestos 2. This coverage does not apply to: a) Asbestos Liability It is hereby understood and agreed that this coverage shall not apply to and does not cover any actual or alleged liability whatsoever for any claim or claims in respect of loss or losses, damage, cost or expense directly or indirectly caused by, resulting from or in consequence of, or in any way involving asbestos, or any materials containing asbestos in whatever form or quantity. This exclusion applies regardless of any other contributing or aggravating cause or event that contributes concurrently or in any sequence to the loss, damage, cost or expense. Pollution 3. This coverage does not apply to: a) Claims in which it is alleged that an error, omission, act, or breach of duty of an Insured Party caused or contributed to the actual, alleged or threatened release, escape, discharge, dispersal or presence of a Pollutant or Pollutants. b) An Insured Party s direct or indirect Regulatory Liability. c) Claims of another party for indemnity or contribution for that other party s Regulatory Liability. d) Fines, penalties, punitive or exemplary damages arising directly or indirectly out of the discharge, dispersal, release or escape of any pollutants. For the purpose of this exclusion, the following definitions shall apply: i) Pollutant or Pollutants: any solid, liquid, gaseous, thermal or electromagnetic irritant or contaminant, either naturally occurring or otherwise, and including but not limited to smoke, vapour, soot, fumes, acids, alkalis, chemicals, waste, ureaformaldehyde, and electromagnetic currents. Page - 10

Waste includes materials to be recycled, reconditioned or reclaimed. The term Pollutant or Pollutants includes a potential or alleged Pollutant or Pollutants. ii) Regulatory Liability: any liability for losses, cost, or expense arising directly or indirectly out of any statutory requirement or governmental order, action, direction, or request to test for, investigate, monitor, cleanup, remove, relocate, contain, treat, detoxify, decontaminate, or neutralize a Pollutant or Pollutants. Fungi 4. This coverage shall not apply to any claim made against an Insured Party in which it is alleged that an act, error, omission or breach of duty committed by an Insured Party caused or contributed directly or indirectly to any cost, loss, damage, expense or liability incurred by others, which cost, loss, damage, expense or liability arose from the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, presence of, spread of, reproduction, discharge or other growth of any fungi or spores however caused, including any costs or expenses incurred to prevent, respond to, test for, monitor, abate, mitigate, remove, cleanup, contain, remediate, treat, detoxify, neutralize, assess or otherwise deal with or dispose of fungi or spores. This exclusion applies whether or not other causes acted concurrently or in sequence to any such act, error, omission or breach of duty. For the purpose of this endorsement the following definitions are added: Fungi includes, but is not limited to, any form or type of mould, yeast, mushroom, or mildew whether or not allergenic, pathogenic or toxigenic, and any substance, vapour or gas produced by, emitted from or arising out of any Fungi or Spores or resultant mycotoxins, allergens, or pathogens. Spores includes, but is not limited to any reproductive particle or microscopic fragment produced by, emitted from or arising out of any fungi. Building Envelope 5. This coverage does not apply to claims made against an Insured Party in which it is alleged that an act, error, omission or breach of duty committed by an Insured Party caused or contributed to the presence or infiltration of moisture: (a) into a building envelope; (b) into any other component of a building from a building envelope; or (c) resulting from the failure of a building envelope. In this exclusion Building Envelope shall mean that portion of a building comprised of the exterior wall and its elements, the interior wall and its elements, and all component parts of the wall cavity and framing between the exterior wall and the interior wall. Page - 11

Terrorism 6. This coverage does not apply to any claim arising directly or indirectly, in whole or in part, out of Terrorism or out of any activity or decision of a government agency or other entity to prevent, respond to or terminate Terrorism. This exclusion applies regardless of any other contributing or aggravating cause or event that contributes concurrently or in any sequence to the act, error, omission or breach of duty. Terrorism means an ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or threat of violence or force, committed by or on behalf of any group(s), organization(s) or government(s) for the purpose of influencing any government and/or instilling fear in the public or a section of the public. Cyber Risks 7. This coverage does not apply to any claim arising directly or indirectly, in whole or in part, as a result of: a) erasure, destruction, corruption, misappropriation, misinterpretation of Data ; b) erroneously creating, amending, entering, deleting, or using Data ; c) the distribution or display of Data, by means of an Internet Website, the Internet, an intranet, extranet, or similar device or system designed or intended for electronic communication of Data ; including any loss of use arising therefrom. Data means representations of information or concepts in any form. Page - 12

COVERAGE C: SUPPLEMENTARY PAYMENTS: DEFENCE AND OTHER COSTS Coverage Agreement Coverage Agreement: 1) In addition to the indemnity provided under this Agreement, the Association shall: 1(a) Defence 1(b) Cost and Interest a) defend in the name of and on behalf of an Insured Party and at the cost of the Association any claim which may at any time be brought against an Insured Party for which indemnity may be provided under Coverage A or B; b) pay all costs awarded against an Insured Party in any proceeding defended by the Association, and any interest accruing after entry of judgment or award on that part of any judgment or award which is within the limits of the Association s liability and any pre-judgment interest required to be paid by law on the part of any judgment or award which is within the limits of the Association s liability; 2) Right to Defend 2) The Association shall have the right and obligation to investigate, defend or settle any claim for which coverage may be afforded under this Agreement 3) The Association may: 3(a) Indemnification, Negotiation 3(b) Medical Expense a) make such investigation, negotiation and settlement of any claim as it may deem expedient; b) pay expenses incurred by an Insured Party for immediate medical or surgical relief to others which is necessary at the time of the accident. 4) The expenses incurred by the Association under paragraphs 1 and 2 are part of the applicable limits of liability. Page - 13

GENERAL CONDITIONS Limits of Liability Cross Liability Notice of Claim or Suit The limit of the Association s liability to an Insured Party other than an Additional Named Insured under Coverage A for each occurrence shall be the amount stated in the Declarations as the Limit of Liability for each Occurrence. The limit of the Association s liability to an Insured Party other than an Additional Named Insured under Coverage B shall be the amount stated in the Declarations as the Limit of Liability for each Loss. The limit of the Association s liability to an Additional Named Insured shall be the Limit of Liability stated on the Certificate of Insurance. The Limits of Liability stated in the Declarations shall apply regardless of the number of Insured Parties against whom a claim is brought. At no time will the Association s liability for claims against Insured Parties exceed the Limits of Liability for Coverage A and for Coverage B stated in the Declarations. The coverage afforded by this Agreement shall apply in respect of any claim or action brought against any one Insured Party by any other Insured Party in the same manner and to the same extent as though a separate Agreement had been issued to each Insured Party. Any breach of a condition of this Agreement by any Insured Party shall not affect the protection given to any other Insured Party. The inclusion herein of more than one Insured Party shall not operate to increase the limits of liability shown on the subscribing member s Certificate of Insurance. Upon the happening of an occurrence or an event or circumstance which might give rise to a claim hereunder, an Insured Party shall give notice thereof to the Association as soon as practicable. Such notice shall contain all available information pertaining to such occurrence, event or circumstance which is obtainable at the time. If claim is made or suit is brought against an Insured Party, every demand, notice, summons or other process received by the Insured Party or by its representative shall be immediately forwarded to the Association. Assistance and Cooperation Deductible and Amount Payable Except at its own cost, an Insured Party shall not voluntarily assume any liability or settle any claim other than for immediate medical and surgical relief for others as is necessary at the time of an accident. An Insured Party shall assist in securing information and evidence and the attendance of any witnesses, at the Association s request and shall cooperate with the Association in the defence of any action or proceedings. An Insured Party shall not interfere in negotiations for settlement of claims or in any legal proceedings. With respect to each claim, the Association is liable for and shall pay hereunder only that part of any amounts payable under one or more of Coverage A, Coverage B, and Coverage C which exceeds the amount stated as deductible in the Subscriber s Certificate of Insurance, subject to the Page - 14

available limits of liability for each Occurrence or Loss as stated in the Declarations with respect to claims against Insured Parties other than Additional Named Insureds and as stated in the Certificate of Insurance with respect to Additional Named Insureds. The deductible shall not apply to investigation costs incurred by the Association prior to the commencement of formal proceedings against an Insured Party. In the event of a claim being brought against any entity of the nature described in paragraph b of the definition of Insured Party or a person described in paragraphs c to f of the definition of Insured Party, the deductible applicable to any such claim shall be the highest of the deductibles being carried by the Subscribers forming the entity, and payment of the deductible shall be pro rata by each Subscriber in an amount equal to the proportion of each Subscriber s deductible to the total of all the Subscribers deductibles. In the event of a claim being brought against an Additional Named Insured, the deductible shall be the amount stated as deductible in the Certificate of Insurance of the Subscriber which requested the extension of coverage to the Additional Named Insured and the deductible shall be paid by that Subscriber. If any claim is brought against Subscribers to a Mutual Aid Agreement with respect to services provided under that Mutual Aid Agreement, the amount payable with respect to any such claim shall be limited to the limits of liability of the Subscriber receiving services pursuant to the Mutual Aid Agreement; the deductible applicable to any such claim shall be the highest of the deductibles being carried by the Subscribers party to the Mutual Aid Agreement, and payment of the deductible shall be pro-rata by each Subscriber in an amount equal to the proportion of each Subscriber s deductible to the total of both Subscribers deductibles. Subrogation Assignment Cancellation, Termination Truth of Statements in Membership Application If the Association makes any payment under this Agreement, it shall be subrogated to the extent of such payment to all rights of recovery of an Insured Party. An Insured Party shall co-operate with the Association to secure and enforce such rights. No assignment of interest under this Agreement shall bind the Association without its written consent. This Agreement may not be terminated except as provided in the Reciprocal Insurance Exchange Agreement. An Insured Party, by accepting this Agreement, represents and warrants that any statements or representations contained in any application made by or on behalf of the Insured Party for insurance coverage provided under this Agreement are true and the Insured Party acknowledges that the Association has relied on the truth of such statements or representations in agreeing to provide insurance coverage to the Insured Party under this Agreement. Page - 15

Proceedings Against the Association Agreements of an Insured Party All disputes between an Insured Party and the Association shall be resolved in accordance with Article 15 of the Reciprocal Insurance Exchange Agreement. Neither an Insured Party nor the Association shall seek to resolve disputes between the Insured Party and the Association in any other manner or forum than that set out in Article 15 of the Reciprocal Insurance Exchange Agreement. An Insured Party may not commence arbitral proceedings to recover the amount of any claim under this Agreement unless the requirements of the conditions of this Agreement and of Article 15 of the Reciprocal Insurance Exchange Agreement, as applicable, are complied with. With respect to coverage for liability arising from machinery or apparatus, as provided under Coverage A, an Insured Party covered thereby: a) constitutes and appoints the Association the Insured Party s irrevocable attorney to appear and defend in any Province or Territory of Canada in which action is brought against the Insured Party arising out of the use or operation of the machinery or apparatus; b) shall reimburse the Association upon demand, in the amount which the Association has paid by reason of the provisions of any statute relating to automobile insurance and which the Association would not otherwise be liable to pay under this Agreement. Other Insurance a) The Association shall not be liable if at the time of a loss or occurrence covered by this Agreement there is any other insurance which would have attached if this Agreement had not been effected (not including insurance provided by policies specifically arranged to apply in excess of the insurance provided by this Agreement), except that the insurance provided by this Agreement shall apply only as excess and in no event as contributing insurance and then only after all such other insurance has been exhausted; b) This Agreement shall not apply to any claim brought against an Insured Party for damages for bodily injury, personal injury, property damage or act, errors, omissions or breach of duty with respect to which an Insured Party is entitled to defence or indemnity or coverage by reason of having given notice of any circumstances which might give rise to a claim under any other policy or policies of insurance, the term of which has expired prior to the inception date of this Agreement. Coverage Extended to Additional Named Insured The coverage afforded by this Agreement shall be extended to an Additional Named Insured in accordance with the following terms and conditions: a) a Subscriber must apply to the Association to add an Additional Named Insured; b) the Association has the right to accept or decline any Additional Named Insured as an Insured Party; Page - 16

c) in its application the Subscriber must state the nature of the activity being undertaken by the Additional Named Insured, the role played by the Subscriber with respect to the activity and the proposed Additional Named Insured, and the amount of insurance requested; d) the Association shall have 15 days to consider an application to add an Additional Named Insured except that where a Subscriber demonstrates that circumstances require earlier consideration by the Association, the Association will make its best efforts to respond in the time requested; e) if the Association accepts coverage for an Additional Named Insured, the name of that Additional Named Insured and the Limits of Liability with respect to that coverage shall be stated on a Certificate of Insurance which will be issued to the Subscriber and to the Additional Named Insured; f) the limit of the Association s liability with respect to coverage for an Additional Named Insured shall be the Limit of Liability stated on the Certificate of Insurance and not the Limit of Liability stated in the Declarations; g) insurance coverage for the Additional Named Insured is not effective until the Certificate of Insurance is issued to the Subscriber; h) except as stated in paragraph (j) below, the coverage provided by the Association to the Additional Named Insured is solely for the vicarious liability of the Additional Named Insured arising from Bodily Injury, Personal Injury, or Property damage caused by the Subscriber (as described in Coverage A) or arising from an act, error, omission or breach of duty by the Subscriber (as described in Coverage B) and does not extend to any direct liability of the Additional Named Insured arising from Bodily Injury, Personal Injury, or Property damage caused by the Additional Named Insured (as described in Coverage A) or arising from an act, error, omission or breach of duty by the Additional Named Insured (as described in Coverage B); i) the coverage extended to the Additional Named Insured in paragraph h) above is subject to all terms and conditions of the Agreement; j) where an Additional Named Insured is acting under the supervision, direction or control of the Subscriber, that Additional Named Insured is entitled to the coverage provided in the Agreement, subject to all terms and conditions of the Agreement; k) notwithstanding paragraphs h) and j) above, no coverage under the Agreement will extend to any independent contractor to the Subscriber regardless of whether such contractor is named as an Additional Named Insured on a Subscriber s Certificate of Insurance; Page - 17

l) the provisions of Coverage C of the Agreement apply only to the extent of the coverage applicable to the Additional Named Insured as set out in paragraphs h), i), j), and k) above; m) the coverage extended to the Additional Named Insured by the Association is solely that which is set out in the terms and conditions of the Agreement, and the Association is not bound by any agreement concerning insurance coverage made between the Additional Named Insured and the Subscriber, whether or not that agreement is known to the Association; and n) if there are any disputes between an Additional Named Insured and a Subscriber and/or the Association arising from or in any way connected with the Agreement and/or the extension of coverage to the Additional Named Insured, such disputes shall be resolved in accordance with the provisions of Article 15 of the Reciprocal Insurance Exchange Agreement, and the Additional Named Insured will not seek resolution of any such disputes in any manner or forum other than as provided for in Article 15. Gender and Number In this Agreement, words importing the singular number only shall include the plural, and vice-versa, and words importing the masculine gender shall include the feminine gender and neuter gender, and words importing persons shall include a natural person, firm, trust, partnership, association, corporation, government or governmental board, municipality, city, town, village, regional district, district municipality, regional hospital district, or other instrumentality of local government. Page - 18

DEFINITIONS Additional Named Insured is as defined in Definition 8) g); Agreement means: this Liability Protection Agreement which is issued pursuant to Article 8.02 of the Reciprocal Insurance Exchange Agreement; Agreement Period means: the period shown on the Declarations page of this Agreement or on an Insured Party s Certificate of Insurance issued under this Agreement and where the period shown on the Certificate of Insurance differs from the period shown on the Declarations page, the period shown on the Certificate of Insurance shall govern when coverage under this Agreement applies. Automobile means: self-propelled motor vehicles and trailers attached thereto licensed for regular or temporary use on public highways; Bodily Injury means: bodily injury, sickness, disease, disability or shock, including death at any time resulting therefrom and damages for care and loss of services incidental thereto. Employee Benefit Program means: Group Life Insurance, Group Health and Disability Insurance, Pension Plans, Worker s Compensation Insurance, Supplementary Unemployment Benefits, Government Unemployment Compensation Insurance and Social Insurance. Employee Benefit Administration means: a) counseling employees with respect to employee benefit programs; b) interpretations relative to employee benefit programs; c) record-keeping in connection with employee benefit programs; d) enrollment, termination or cancellation under employee benefit programs. Page - 19

Insured Party - Wherever used in this Agreement, the unqualified word Insured Party shall mean a Subscriber and also the following: a) The Subscriber s employees, officers, directors and Council members, while acting within the course and scope of their employment or their positions with the Subscriber; b) A Service Provider or Service Providers, Any Society, Association or Special Purpose Body authorized under the BC Local Government Act, the Community Charter, the Vancouver Charter, or any other act or statute authorizing a local government to establish such entities, but only if each and every member or shareholder of any such entity is an authorized Special Purpose Body or a Subscriber or Subscribers or an individual acting solely on behalf of a Subscriber or Subscribers, and then only to the extent that any such entity is carrying on business solely for or on behalf of a Subscriber or Subscribers in connection with the purpose for which the entity was established; c) any person, past or present, appointed or elected: (i) to a board, greater board, commission, committee or council; or (ii) to manage and direct the affairs of a society, association or Special Purpose Body, whether as a director or otherwise, where the board, greater board, commission, committee, council, society, association or Special Purpose Body is authorized under the BC Local Government Act, the Community Charter, the Vancouver Charter, or any other act or statute authorizing a local government to establish such entities, but only if the person was elected or appointed solely by or on behalf of a Subscriber or Subscribers and then only for their actual or alleged breach of duty, neglect, error, misstatement, misleading statement or omission arising out of the performance or non-performance of the duties or obligations associated with the position to which the person was elected or appointed, or any matter claimed against such person solely by reason of the person s appointment or election; d) Any past or present employee or staff member of any of the foregoing boards, greater boards, commissions, committees, councils, societies, associations or Special Purpose Bodies, but only if each and every member or shareholder of any such entity is an authorized Special Purpose Body or a Subscriber, and then only for an actual or alleged breach of duty, neglect, error, misstatement, misleading statement or omission arising out of such employment; e) a past or present special municipal constable appointed to assist a Subscriber s police department but only for an actual or alleged breach of duty, neglect, error, misstatement, misleading statement or omission arising out of such appointment or any matter claimed against such person solely by reason of that person s appointment; Page - 20

f) any past or present volunteer who participates in the delivery of a Subscriber s services or who participates in the delivery of services by the bodies referred to in paragraph (b) above, but only for volunteer services provided under the supervision of an officer or employee of a Subscriber or of those bodies and then only for an actual or alleged breach of duty, neglect, error, misstatement, misleading statement or omission arising out of such volunteer services or any matter claimed against such person solely by reason of the volunteer services provided; g) any individual, corporation, and/or organization not included in paragraphs (a) through (f) above and which is named from time to time on a Subscriber s Certificate of Insurance (the Additional Named Insured ) but only with respect to the coverage granted in the Coverage Extended to Additional Named Insured condition of the General Conditions of this Agreement. h) any person providing fire fighting services to a Subscriber, other than an employee of the Subscriber, but only if that person is a member of a fire fighting association with which the Subscriber has existing written contractual arrangements for the provision of fire fighting services by members of the firefighting association, and then only while that person is in the course of providing those services to the Subscriber. i) any board, greater board, commission, committee or council authorized under the BC Local Government Act, the Community Charter, the Vancouver Charter, or any other act or statute authorizing a local government to establish such entities, provided such entity is established by bylaw or council resolution, but only to the extent that any such entity is carrying on business or providing services solely for or on behalf of a Subscriber or Subscribers in connection with the purpose for which the entity was established. Loss As respects Coverage B only, Loss means the total amount which an Insured Party becomes legally obligated to pay on account of all claims made against the Insured Party or Parties arising out of the act, error, omission, or breach of duty giving rise to the claims. All claims arising from substantially the same cause or causes shall be considered as arising out of one Loss, regardless of the number of parties making the claims or the number of Insured Parties against which the claims are brought. Mutual Aid Agreement An agreement in writing approved by the Association whereby: (a) the Subscriber and another body agree to provide each other with services in Page - 21

the event of an emergency and whereby the recipient of the services agrees to hold harmless and indemnify the provider of the services against the consequence of the provider s negligence, or (b) a Subscriber agrees to provide another Subscriber with personnel or services to be rendered on behalf of the other Subscriber on a temporary basis and whereby the other Subscriber agrees to hold harmless and indemnify the providing Subscriber against the consequences of the negligence of those providing the services. Nuclear Hazard means: a) any liability under the Nuclear Liability Act; b) liability for bodily injury or property damage resulting directly or indirectly from: i) the ownership, maintenance, operation or use of a nuclear facility by or on behalf of an Insured Party; ii) the furnishing by an Insured Party of services, materials, parts or equipment in connection with the planning, construction, maintenance, operation or use of a nuclear facility; iii) the possession, consumption, use, handling, disposal, storage or transportation of radioactive material by an Insured Party. Occurrence As respects coverage for bodily injury and property damage under Coverage A, Occurrence means an accident or event, including continuous or repeated exposure to substantially the same general conditions, which results in bodily injury or property damage. As respects coverage for personal injury under Coverage A, Occurrence means an injury or offence listed in Items (a) through (e) of Definition #13 Personal Injury. All claims arising from a continuous or repeated exposure to substantially the same general conditions shall be considered as arising out of one occurrence. Personal Injury means: a) false arrest, malicious prosecution, wrongful detention or imprisonment; b) invasion of privacy, wrongful eviction or wrongful entry; c) libel, slander or defamation of character; Page - 22