02 exp 0024 00 08 02 · fire to prevent its spread if the fire would be covered under this policy....
TRANSCRIPT
IRONSHORE SPECIALTY INSURANCE COMPANY
One State Street Plaza 7th Floor
New York, NY 10004 (877) IRON‐411
Policy Number:
BUILDERS RISK POLICY
Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is covered and not covered under this policy.
Throughout this policy, the words “Named Insured” refer to the Named Insured(s) shown in the Declarations. The word “Insured” refers to the Named Insured(s) and any Additional Insureds shown in the Declarations. The word “Company” refers to the Insurance Company providing this insurance. The words “Covered Property” and “Covered Cause(s) of Loss” are defined in the applicable sections in this policy.
Other words and phrases that appear in quotation marks have special meaning. Refer to Section F. DEFINITIONS, for their meanings.
A. PROPERTY DAMAGE COVERAGE
This policy, subject to the terms, exclusions, limitations, conditions and limits of insurance contained in this policy or endorsement(s) thereto, insures against Covered Causes of Loss to Covered Property within the Coverage Territory as defined and limited as follows and subject to the Exclusions of this policy:
1. Covered Property
Covered Property means:
a. All property, including materials, supplies, machinery, fixtures, and equipment, owned by the Insured or for which the Insured may be legally liable, used or to be used in or incidental to the site preparation, fabrication or assembly, installation or erection, or alteration, renovation or construction of the “Insured Project”, provided that the value of the Covered Property has been included in the estimated “Total Project Value” declared by the Named Insured and stated on the Declarations;
b. The cost of excavations, grading or filling and underground flues, pipes, drains, piers or pilings, provided that the value of these items has been included in the estimated “Total Project Value” declared by the Named Insured and stated on the Declarations; and
c. Scaffolding, form work, fences, shoring, hoarding, falsework and temporary structures incidental to the project, provided that the value of these items has been included in the estimated “Total Project Value” declared by the Named Insured and stated on the Declarations.
2. Property Not Covered
This policy does not insure the following:
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a. Existing buildings or structures or any other existing property at the “Insured Project”, unless declared to the Company and specifically endorsed to this policy;
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b. Contractor's machinery, tools, plant and equipment, including spare parts and accessories, and other property of a similar nature not intended to become a permanent part of the “Insured Project”, except as provided in Section A.1.c. above;
c. Land (including land on which Covered Property is located) and land values and the value of cut, fill and backfill materials which existed at the project site prior to project commencement, but this exclusion does not apply to the value of fill and backfill materials purchased for use in the completion of the project if the value of such materials has been included in the estimated “Total Project Value” declared by the Named Insured and stated on the Declarations;
d. Water;
e. Standing timber or growing crops;
f. Automobiles, motor trucks, trailers or other vehicles, rolling stock, aircraft or watercraft;
g. Accounts, bills, currency, precious metals or stones, deeds, evidences of debt, books, records, manuscripts, money, notes and securities and other similar papers;
h. Transmission and distribution lines located more than 1,000 feet from the location of the “Insured Project”;
i. Owner supplied material, equipment, machinery and supplies, unless the value of these items has been included in the estimated “Total Project Value” declared by the Named Insured and stated on the Declarations;
j. Contraband or property in the course of illegal transportation or trade;
k. “Used machinery and equipment” but only as to loss or damage while undergoing any form of testing, commissioning, or start‐up; or
l. “Prototype machinery and equipment” but only as to loss or damage while undergoing any form of testing, commissioning, or start‐up.
Further, this policy does not insure the following, unless a Sublimit is shown on the Declarations for such property, subject to the provisions contained in the Additional Coverages section of the policy for such property:
m. Plans, blueprints, drawings, renderings, specifications or other contract documents or models; or
n. Trees, shrubs, grass, plantings and landscaping;
3. Where Coverage Applies (Coverage Territory)
This policy applies to Covered Property while such Covered Property is:
a. At the location of the “Insured Project”;
b. Temporarily at other locations while in offsite storage; or
c. In transit;
within the United States of America, its territories and possessions and Canada, including shipments by air and on inland or the territorial coastal waters of any of the foregoing, excluding ocean marine shipments.
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However, (i) scaffolding, form work, fences, shoring, boarding, falsework and temporary structures are only covered at the “Insured Project”, and (ii) Covered Property in transit or temporarily at other locations
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while in offsite storage is only covered if a Sublimit is shown on the Declarations for such property and such property will be subject to the Sublimit of Insurance applicable to such property and the provisions contained in the Section 7. Additional Coverages.
4. When Coverage Begins and Ends
This policy applies to Covered Property from the time the property is at the Insured’s risk starting on or after the effective date of this policy, but ends:
a. After the owner or buyer accepts the property,
b. When the Named Insured’s interest ceases,
c. After the lapse of ninety (90) days after a certificate of occupancy has been applied for,
d. After the property is occupied or put to its intended use (but the Insured may install, store or test machinery and equipment); or
e. When this policy expires or is cancelled;
whichever occurs first.
The policy period or the “Hot Testing Period”, or both if applicable, may be extended at the Named Insured’s request made in writing to the Company prior to the end of coverage subject to the Company’s acceptance and agreed upon rates, deductibles, limits, terms and conditions.
5. Covered Causes of Loss
Covered Causes of Loss means risks of direct physical loss or damage to Covered Property, except those causes of loss or damage that are excluded in this policy or by endorsement thereto.
6. Exclusions
a. This policy does not insure loss or damage caused by, resulting from, contribute to or made worse by any of the following, all whether direct or indirect, proximate or remote or in whole or in part caused by, contributed to or aggravated by any physical loss or damage insured by this policy, except as specifically allowed below:
(1) Delay, loss of use or occupancy, loss of market, liquidated damages, performance penalties, penalties for non‐completion, delay in completion or non‐compliance with contract conditions or any other consequential loss, damage or expense;
(2) Unexplained disappearance or shortage found upon taking inventory;
(3) Wear and tear, any quality in the property that causes it to damage or destroy itself, hidden or latent defect, gradual deterioration, depreciation, corrosion, erosion, rust, dampness or dryness, or extremes in temperature.
However, if insured physical loss or damage by a Covered Cause of Loss ensues, then this policy will cover for such ensuing insured physical loss or damage only.
(4) Normal subsidence, settling, cracking, contraction, shrinkage or expansion of walls, floors, ceilings, buildings, foundations, patios, walkways, driveways or pavements;
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(5) Insects or animals;
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(6) Dishonest or criminal acts by an Insured, any of the Insured’s partners, employees, directors, trustees, authorized representatives or anyone to whom the Insured entrusts the property for any purpose:
(a) Acting alone or in collusion with others; or
(b) Whether or not occurring during the hours of employment.
This exclusion does not apply to property in the custody of a carrier for hire.
Further, this Exclusion does not apply to acts of destruction by the Insured’s employees; but, theft by employees is excluded.
(7) Infestation or disease;
(8) Rain, snow, sleet, hail, ice, sand or dust, whether driven by wind or not, to the interior of any building or structure or the property inside the building or structure, unless the building or structure first sustains damage from a Covered Cause of Loss to its roof, windows or walls through which the rain, snow, sleet, hail, ice, sand or dust enters; (9) Rain, snow, sleet, hail, ice, sand or dust, whether driven by wind or not, to the Insured’s personal property in the open.
(10) Enforcement of any ordinance or law, unless a Sublimit is shown on the Declarations for such enforcement subject to the provisions contained in the Additional Coverages section of the policy;
(11) Enforcement of any order of governmental or municipal authority by suspension, lapse, termination and/or cancellation of any license, lease, or permit, or any injunction or court;
(12) Faulty, inadequate or defective:
(a) Planning, zoning, development, surveying, or siting;
(b) Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, or compaction;
(c) Materials used in repair, construction, renovation or remodeling; or
(d) Maintenance;
of part of or all of any property wherever located.
However, if insured physical loss or damage by a Covered Cause of Loss ensues, then this policy will cover for such ensuing insured physical loss or damage only.
(13) Seizure or destruction of property by order of governmental authority. However, the Company will pay for insured physical loss or damage caused by or resulting from acts of destruction ordered by governmental authority and taken at the time of a fire to prevent its spread if the fire would be covered under this policy.
(14) (a) Hostile or warlike action in time of peace or war, including action in hindering, combating, or defending against an actual, impending, or expected attack by any of the following:
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(i) Government or sovereign power (de jure or de facto), or by any authority maintaining or using military, naval, or air forces;
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(ii) Military, naval, or air forces; or (iii) An agent of any such government, power, authority, or armed forces.
(b) Any weapon of war employing atomic fission or fusion or radioactive force whether in time of peace or war; or
(c) Insurrection, rebellion, revolution, civil war, usurped power, or action taken by governmental authority in hindering, combating, or defending against any of these. (15) Nuclear reaction, nuclear radiation, or radioactive contamination, all whether controlled or uncontrolled, and whether such loss be direct or indirect, approximate, or remote or be in whole or in part caused by, contributed to, or aggravated by the peril(s) insured against in this policy. However, subject to the foregoing and all terms, conditions, and limitations of this policy, insured physical loss or damage by fire resulting from nuclear reaction, nuclear radiation, or radioactive contamination is insured against by this policy. (16) (a) Asbestos, dioxin or polychlorinated biphenyls (PCBs) removal. However, this exclusion shall not apply to physical loss or damage to the asbestos material itself directly caused by fire, lightning, explosion, “windstorm” or hail, smoke, aircraft impact or vehicle impact, riot, strike or civil commotion, vandalism, or malicious mischief or accidental discharge from automatic fire protective systems;
(b) Enforcement of any ordinance or law which requires the demolition or increased cost of reconstruction, repair, debris removal, or remediation of property or loss of use of the property due to asbestos, dioxin or polychlorinated biphenyls (PCBs); or
(c) Any governmental direction or request declaring an undamaged part of Covered Property can no longer be used for the purpose for which it is intended or installed and must be removed or modified due to the presence of asbestos, dioxin or polychlorinated biphenyls (PCBs).
(17) (a) Presence, growth, proliferation, spread or any activity of “fungus”, wet or dry rot or bacteria. But this exclusion does not apply when the “fungus”, wet or dry rot or bacteria results from fire or lightning;
(b) Enforcement of any ordinance or law which requires the demolition, repair, replacement, reconstruction, remodeling or remediation of property due to the presence, growth, proliferation, spread or any activity of “fungus”, wet or dry rot or bacteria; or (c) Costs associated with the enforcement of any ordinance or law which requires any Insured or others to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of “fungus”, wet or dry rot or bacteria.
(18) The actual, alleged, or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants”. Nevertheless, if fire is not excluded from this policy and a fire arises directly or indirectly from the actual discharge, dispersal, seepage, migration, release or escape of “pollutants”, any insured physical loss or damage insured under this policy arising directly from that fire is insured subject to the provisions of the policy.
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Further, this exclusion shall not apply to insured physical loss or damage directly caused by fire, lightning, explosion, “windstorm” or hail, smoke, aircraft impact or vehicle impact, riot, strike or civil commotion, vandalism, or malicious mischief or accidental discharge from automatic fire protective systems.
(19) "Terrorism", including action in hindering or defending against an actual or expected incident of "terrorism" when one or more of the following are attributed to an incident of “terrorism”:
(a) The "terrorism" is carried out by means of the dispersal or application of radioactive material, or through the use of a nuclear weapon or device that involves or produces a nuclear reaction, nuclear radiation or radioactive contamination;
(b) Radioactive material is released, and it appears that one purpose of the "terrorism" was to release such material;
(c) The “terrorism” involves the use, release, or escape of nuclear materials, or that directly or indirectly results in nuclear reaction, nuclear radiation or radioactive contamination;
(d) The "terrorism" is carried out by means of the dispersal or application of pathogenic or poisonous biological or chemical materials; or
(e) Pathogenic or poisonous biological or chemical materials are released, and it appears that one purpose of the "terrorism" was to release such materials;
(20) With respect to piling, foundations and retaining walls, expenses and costs incurred:
(a) For replacing or rectifying piles or retaining wall elements which:
(i) have become misplaced, misaligned or jammed during their construction;
(ii) are lost, abandoned or damaged during driving or extraction; or
(iii) have become obstructed by jammed or damaged piling equipment or casings.
(b) For rectifying disconnected or declutched sheet piles;
(c) For rectifying any leakage or infiltration of material of any kind;
(d) For filling voids or for replacing lost bentonite, suspensions, or any media or substance used for excavation support or as a ground‐ conditioning agent;
(e) As a result of any piles or foundation elements having failed to pass a load bearing test or otherwise not having reached their designed load bearing capacity; or
(f) For reinstating profiles or dimensions; and
(21) Cessation of work, whether total or partial. Cessation of work as used herein shallnot mean any period of time during which operations would not normally have been conducted such as Saturdays, Sundays or holidays, nor shall it mean seasonal inactivity planned in advance, schedule delays due to weather, labor actions beyond the Insured's control or suspension of project activity which has been occasioned by loss or damage covered under this policy provided the “Insured Project” is maintained and protected against loss during such inactivity.
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b. Except as provided in Section 7.a. – Additional Coverages – Plans, Blueprints, Drawings Renderings Specifications or Other Contract Documents or Models, the Company shall not pay for loss, damage, destruction, distortion, erasure, corruption or alteration of “electronic data” from any cause whatsoever (including but not limited to “computer virus”) or loss of use, reduction in functionality, cost, expense of whatsoever nature resulting therefrom, regardless of any other cause or event contributing concurrently or in any other sequence to the loss. c. In addition to the Exclusions listed above, the Company shall not pay for loss or damage covered under any guarantee, warranty or other expressed or implied obligation of any contractor, manufacturer or supplier. This exclusion applies whether or not such contractor, manufacturer or supplier is insured by this policy. d. In addition to the Exclusions listed above, this policy shall not apply to any consulting engineer, architect, or designer, or any other person employed by them or any others for whose act they are legally liable, for loss or damage arising out of the performance of their respective professional activities. This exclusion applies whether or not such individuals would otherwise be insured by this policy.
7. Additional Coverages
The following coverages only apply if a Sublimit is shown in the Declarations for that specific coverage:
a. Plans, Blueprints, Drawings Renderings Specifications or Other Contract Documents or Models
If insured physical loss or damage to plans, blueprints, drawings, renderings specifications or other contract documents or models, including those which exist as “electronic data” on “electronic data” processing media, is caused by or results from a Covered Cause of Loss while at the “Insured Project”, the Company will pay the expenses and costs to reproduce with property of like kind and quality including the cost of gathering or assembling information from back up data if replaced. If not replaced, Company will pay the value of blank material. This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage.
Should “electronic data” processing media insured by this policy suffer physical loss or damage insured by this policy, then the basis of valuation shall be the cost of the blank media plus the costs of copying the “electronic data” from back‐up or originals of a previous generation. These costs will not include research and engineering or any costs of recreating, gathering or assembling such “electronic data”. If the media is not repaired, replaced or restored the basis of valuation shall be the cost of the blank media. However, this policy does not insure any amount pertaining to the value of such “electronic data” to the Insured or any other party, even if such “electronic data” cannot be recreated, gathered or assembled. This coverage does not apply to electrical or magnetic injury to or errors or omissions in creating, processing or copying “electronic data”, however caused.
b. Pollutant Clean‐Up and Removal
If a discharge, dispersal, seepage, migration, release or escape of the “pollutants” is caused by or results from a Covered Cause of Loss at the “Insured Project” that occurs during the policy period, the Company will pay the Insured’s expenses and costs to:
(1) Extract “pollutants” from land or water or Covered Property debris at the “Insured Project”;
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(2) Remove, restore or replace contaminated or polluted land or water at the “Insured Project”; or
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(3) Remove or transport any property, material, or debris to a site for storage or decontamination required because the property or debris is affected by the“pollutants”, whether or not such removal, transport or decontamination is required by law, ordinance or regulation.
The expenses and costs will be paid only if they are reported to the Company in writing within one hundred eighty (180) days of the date on which the Covered Causeof Loss occurs. This Additional Coverage does not apply to costs to test for, monitor or assess the existence, concentration or effects of “pollutants.” However, the Company will pay for testing which is performed in the course of extracting the “pollutants” from the land or water or Covered Property. This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage. Further, the Sublimit is the most the Company will pay under this Additional Coverage for the sum of all such expenses and costs arising out of Covered Causes of Loss occurring during each separate twelve (12) month period of this policy. The Company will not pay under this Additional Coverage any expenses or costs to remove Covered Property debris caused by or resulting from a Covered Cause of Loss that occurs during the policy period except as provided in (3) above of this subsection. c. Trees, Shrubs, Grass, Plantings and Landscaping Subject to the Sublimit shown on the Declarations for this Additional Coverage, the Company will pay forinsured physical loss or damage to trees, shrubs, grass, plantings and landscaping which are located at the “Insured Project”, but only if caused by the following: fire, lightning, explosion, “windstorm” or hail, smoke, aircraft impact or vehicle impact, riot, strike or civil commotion, vandalism, or malicious mischief. d. Expediting Expense The Company will pay the reasonable expenses and costs for overtime, night work, work on public holidays, express freight, including air freight, all incurred solely:
(1) To expedite the repair or replacement of Covered Property which has sustained physical loss or damage caused by a Covered Cause of Loss; or (2) Which are necessary to return the work on the Covered Property to the same schedule actually being observed immediately prior to the physical loss or damage caused by a Covered Cause of Loss. Expediting expenses do not include any expenses or costs incurred to expedite work on parts of the Covered Property which have not sustained loss or damage.
This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage. e. Debris Removal
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(1) If there is insured physical loss or damage to Covered Property at the “Insured Project” caused by or resulting from a Covered Cause of Loss, the Company will pay the necessary and reasonable cost to remove debris being a part of the Covered Property from the “Insured Project” and the cost of clean‐up at the “Insured Project” made necessary as a result of such loss or damage.
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(2) This Additional Coverage does not apply to costs to:
(a) Extract "pollutants" from land, air, water or Covered Property; (b) Remove, restore or replace contaminated or polluted land, air, water or Covered Property; or (c) Remove expendable supplies.
This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage. Further, it is a condition precedent to recovery under this Additional Coverage that the Company shall have paid, or agreed to pay, for insured physical loss or damage to the Covered Property, unless such payment is precluded solely by the operation of the deductible.
In addition, the Insured shall give written notice to the Company of intent to claim for cost of debris removal or cost of cleanup not later than twelve (12) months after the date of such physical insured physical loss or damage.
f. Fire Department Service and Extinguishing Expenses
If there is insured physical loss or damage to Covered Property at the “Insured Project” caused by or resulting from a Covered Cause of Loss, the Company will pay the following expenses:
(1) Fire department service and other extinguishing expenses for which the Insured may be assessed; and
(2) The cost of fire extinguishing materials actually expended to fight any fires.
This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage.
g. Demolition, Increased Cost of Construction, and Ordinance or Law
In the event of insured physical loss or damage to Covered Property at the “Insured Project” caused by or resulting from a Covered Cause of Loss that causes the enforcement of any law or ordinance, in effect at the time of the loss or damage, regulating the repair, rebuilding or reconstruction of damaged parts of the “Insured Project”, the Company will pay for:
(1) The cost of demolishing the undamaged parts of the “Insured Project”, as may be required, including the cost of clearing the site; and
(2) The increased cost of repair, rebuilding or reconstruction of the damaged an undamaged parts of the “Insured Project” on the same site for the same use but not exceeding like height, floor area, style and material and limited to the costs that would have been incurred in order to comply with the minimum requirements of such law or ordinance.
However, the Company shall not be liable for any increased cost of construction loss, unless (i) the damaged or destroyed property is actually rebuilt or replaced on the same site with due diligence and dispatch and (ii) such repair or replacement iscompleted within two (2) years after the destruction or damage or within such further time as the Company may allow in response to an extension requested during the two (2) year period.
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This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage.
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h. “Hot Testing”
When a specific period is shown on the Declarations for “Hot Testing” and a “Hot Testing Period” has been designated in the Declarations, this policy is extended to cover insured physical loss or damage to the Covered Property which is caused by or results from “Hot Testing”. However, no coverage is provided under this Additional Coverage for loss or damage to:
(1) Catalysts; or
(2) Refractory linings and brickwork from the time of the first application of heat, unless such insured physical loss or damage directly results from a Covered Cause of Loss to other Covered Property.
The Insured warrants that supervisory and safety systems shall not be deliberately or knowingly circumvented during the conduct of “Hot Testing”. It is further warranted that all instrumentation and protection will be installed and activated prior to the conduct of any “Hot Testing”. These warranties shall not apply when it is standard accepted industry practice or a manufacturer’s specification that such circumvention is necessary for the conduct of individual activities within the conduct of “Hot Testing”, provided that such circumvention does not extend beyond said individual activities.
i Emergency Property Protection Expense This policy shall pay for those reasonable expenses incurred by the Insured in an effort to protect or remove Covered Property, including moving and storage expenses, when the property is in imminent danger of sustaining insured physical loss or damage by the perils of: (1) "Named storm" but only when the potential for the same to occur and to affect Covered Property has been forecasted by the National Weather Service; (2) "Flood" but only when the potential for the same to occur and to affect Covered Property has been forecasted by the National Weather Service or the U.S. Army Corps of Engineers; and (3) Fire.
Coverage under this extension shall also apply to any insured physical loss or damage to Covered Property while it is being moved or in transit to a storage location.
This coverage extension applies for up to thirty (30) consecutive days after the property is first moved. This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage.
j. Transit
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If a sublimit is entered in the Declarations, coverage applies with respect to Covered Property from the commencement of loading at the original point of shipment anywhere within the Coverage Territory until completion of unloading at the location of the "Insured Project" or at a temporary offsite location, including shipments on inland or coastal waters but excluding ocean marine shipments. To the extent others are responsible for loss or damage to Covered Property while in transit under terms F.O.B. (freight on board) to a designated location or recipient, this coverage extension will cover as excess insurance and will not contribute with such other insurance.
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The Insured agrees to keep records of all shipments insured hereunder and make them available to the Company upon request.
This coverage shall be void if the Insured enters into any special agreement with carriers, releasing them from their common law or statutory liability or agreeing that this insurance shall in any way inure to the benefit of such carriers, however, the Insured may, without prejudice to this coverage, accept such bills of lading, receipts, or contracts of transportation as are ordinarily issued by carriers containing a limitation as to the value of Covered Property. This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage.
k. Offsite Storage
If a sublimit is entered in the Declarations, coverage applies to Covered Property while at any location on a temporary basis anywhere within the Coverage Territory, except while in the course of manufacturing or processing at a manufacturer's or supplier's site, or while in transit. To the extent others are responsible for loss or damage to Covered Property while at a temporary offsite location, this coverage extension will cover as excess insurance and will not contribute with such other insurance.
This coverage is subject to the Sublimit shown on the Declarations for this Additional Coverage.
B. LIMITS OF INSURANCE The most the Company will pay for insured physical loss or damage in any one “occurrence” is the Limit of Insurance shown on the Declarations subject to the Sublimits of Insurance and Annual Aggregate Limits of Insurance. The Sublimits of Insurance are part of and not in addition to the Limit of Insurance and Annual Aggregate Limits of Insurance. Further, the
Sublimits of Insurance do not increase the Limit of Insurance or the Annual Aggregate Limits of Insurance.
The Sublimits of Insurance are the most the Company will pay for insured physical loss or damage in any one “occurrence” with respect to the described coverage to which the Sublimits of Insurance apply. The Annual Aggregate Limits of Insurance, if applicable, are the most the Company will pay for insured physical loss or damage caused by, resulting from, contributed to or aggravated by the described covered causes of loss shown on the Declarations in any one “occurrence” and in the aggregate annually for insured physical loss or damage from all “occurrences”. The Annual Aggregate Limits of Insurance shall not exceed the Sublimits of Insurance if such Sublimits are applicable to the insured physical loss or damage. C. DEDUCTIBLES The Company will not pay for insured physical loss or damage in any one “occurrence” until the amount of the adjusted insured physical loss or damage exceeds the applicable Deductible shown on the Declarations. The Company will then pay the amount of the adjusted insured physical loss or damage in excess of the Deductible, up to the applicable Limit of Insurance. In the event that more than one Deductible amount applies to the loss or damage to CoveredProperty in anyone “occurrence”, then only the largest applicable Deductible amount shall be applied. If a Covered Cause of Loss has a specified Deductible amount shown on the Declarations as applicable to this policy, the Company will then pay the amount of the adjusted insured physical loss or damage in excess of the specified Covered Cause of Loss Deductible, up to the applicable Limit of Insurance. D. LOSS CONDITIONS
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1. Abandonment
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There can be no abandonment of any property to the Company.
2. Appraisal
If the Insured and the Company disagree on the value of the property or the amount of loss, either party may make written demand upon the other party for an appraisal of the loss. In this event, each party will select a competent and impartial appraiser. The two appraisers will select an umpire. If the appraisers are unable to agree upon theselection of a third appraiser, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will:
a. Pay its chosen appraiser; and
b. Bear the other expenses of the appraisal and umpire equally.
If there is an appraisal, the Company shall still retain its right to deny the claim.
3. Duties in the Event of Loss
The Named Insured must see that the following actions are taken in the event of direct physical loss or damage to Covered Property which may give rise to a claim under this policy:
a. Notify the appropriate law enforcement authorities if a law may have been broken.
b. Give the Company immediate notice of the loss or damage and include a description of the property involved.
c. As soon as possible thereafter, give the Company a description of how, when and where the loss or damage occurred, the interest of the Insured and all others, the value of the property involved in the loss or damage, and the amount of the loss or damage.
d. Take all commercially reasonable steps to protect the Covered Property from further damage, and keep a record of the expenses necessary to protect the Covered Property, for consideration in the settlement of the claim. This will not increase the Limit of Insurance. However, the Company will not pay for any subsequent loss or damage resulting from a cause of loss that is not a Covered Cause of Loss. Also, if feasible, set the damaged property aside and in the best possible order for examination.
e. The Insured will not, except at their own cost, voluntarily make a payment, assume any obligation, or incur any expense without the Company’s written consent.
f. As often as may be reasonably required, permit the Company or its representative to inspect the property proving the loss or damage and examine the Insured’s books and records.
Also permit the Company to take samples of damaged and undamaged property for inspection, testing and analysis, exam all books of account, bills, invoices, and other vouchers and permit the Company to make copies of these documents and the Insured’s books and records.
g. The Company may examine any Insured under oath, while not in the presence of any other Insured and at such times as may be reasonably required, about any matter relating to this insurance or the claim, including an Insured's books and records. In the event of an examination, an Insured's answers must be signed.
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h. Send the Company a signed, sworn proof of loss containing the information the Company requests to settle the claim. The Insured must do this within sixty (60) days after the Company’s request. The Company will supply the Insured with the necessary forms.
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i. Immediately send the Company copies of any demands, notices, summonses or legal papers received in connection with the claim.
j. Cooperate with the Company in the investigation or settlement of the claim.
4. Loss Payment
a. The Company will give notice of its intentions regarding payment of loss within thirty (30) days after the Company receives the sworn proof of loss.
b. The Company will not pay Insured more than the Insured’s financial interest in the Covered Property.
c. The Company may adjust losses with the owners of lost or damaged property if other than the Insured. If the Company pays the owners, such payments will satisfy the Insured’s claim against the Company for the owners' property. The Company will not pay the owners more than their financial interest in the Covered Property.
d. The Company may elect to defend the Insured against suits arising from claims of owners of property. The Company will do this at its expense.
e. The Company will pay for covered insured physical loss or damage within sixty (60) days after the Company receives the sworn proof of loss if the Insured has complied with all the terms of this policy and:
(1) The Company has reached agreement with the Insured on the amount of the loss or damage; or
(2) An appraisal award has been made.
f. The Company will not be liable for any part of a loss that has been paid or made good by others.
g. No claim for loss or damage during transit shall be payable under this policy until the Insured has filed a claim with and made reasonable efforts to secure payment from the transporting carrier and the carrier has denied liability.
5. Contributing Insurance
Contributing insurance is insurance covering in the same manner and layer as this insurance, which is not designated as and notified to the Company as primary or excess with respect to the insurance provided in this policy. This insurance shall contribute in accordance with this policy condition, but only to the extent of the participation of this policy in the total limit of liability set forth herein.
6. Excess Insurance
Excess insurance is insurance over the limit of liability set forth in this policy. The existence of such excess insurance shall not prejudice the coverage provided under this policy, nor will it reduce any liability hereunder.
7. Other Insurance
Except for insurance described in the Contributing Insurance Condition or the Excess Insurance Condition, this policy shall not cover to the extent of any other insurance, whether prior or subsequent hereto in date, and whether directly or indirectly covering the same property against the same perils and whether collectible or not. The Company shall be liable for insured physical loss or damage only to the extent of that amount excess of the amount due from such other insurance, subject to the applicable Deductible.
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8. Transfer of Rights of Recovery against Others to the Company
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If any person or entity to or for whom the Company makes payment under this policy has rights to recover damages from another person or entity, those rights are transferred to the Company to the extent of the Company’s payment. That person or organization must do everything necessary to secure the Company’s rights and must do nothing after loss to impair them. However, the Insured may waive the Insured’s rights against another party in writing:
a. Prior to a loss or damage to the Covered Property.
b. After a loss or damage to the Covered Property only if, at time of loss, that party is one of the following:
(1) An individual that is insured by this insurance; or
(2) A business firm:
(i) Owned or controlled by the Insured; or
(ii) That owns or controls the Insured.
However, the Company shall retain the Insured’s rights of recovery against:
a. Any manufacturer or supplier, whether an Insured or not, of machinery, equipment or other property for the cost of making good any loss or damage which such party has agreed to make good under any guarantee, warranty or other expressed or implied obligation; or
b. Any consulting engineer, architect, or designer for loss or damage arising out of the performance of their respective professional activities, whether an Insured or not.
9. Protection of Property after Loss When Covered Property has sustained direct physical loss or damage by a Covered Cause of Loss, the Named Insured will take reasonable steps to protect, recover or save the damaged property and minimize any further loss or damage. The acts of the Named Insured or the Company in protecting, recovering or saving the damaged property will not be considered a waiver or an acceptance of abandonment. The Named Insured and the Company will bear the expense incurred proportionate to their respective interests. The foregoing shall not serve to increase the Limit(s) of Insurance stated in the Policy and shall be subject to the deductible provisions of this policy.
E. GENERAL CONDITIONS
1. Concealment, Misrepresentation or Fraud
This policy is void in any case of fraud, intentional concealment or misrepresentation of a material fact, by any other Insured, at any time, concerning:
a. This policy, including any insurance application or submission;
b. The Covered Property;
c. The Insured’s interest in the Covered Property; or
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d. A claim under this policy.
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2. Legal Action against the Company
No one may bring a legal action against the Company under this policy, unless:
a. There has been full compliance with all the terms of this policy; and
b. The action is brought within twelve (12) months after the Insured first had knowledge of the “occurrence” which gives rise to the claim, unless a longer period of time is applicable by statute.
3. Compliance with Law
Any terms of this policy that are in conflict with the applicable laws of the state wherein this policy is issued (or other state having jurisdiction over this policy) are hereby amended to conform to such laws.
4. No Benefit to Bailee
The policy will not inure directly or indirectly to the benefit of any carrier or bailee.
5. Valuation
In the event of insured physical loss or damage by a Covered Cause of Loss and subject the Limit(s) of Insurance, Sublimit(s) of Insurance and Annual Aggregate Limit(s) of Insurance shown on the Declarations, the Company shall not be liable for amounts greater than the following:
a. The cost to repair, replace, or re‐erect the Covered Property, except as provided below, at the time and place of insured physical loss or damage, with material of like kind and quality, less betterment, salvage or other recovery and if included in the “Total Project Value” declared, contractor’s reasonable profit and overhead, in the same proportion as that included in the original contract documents. If the Covered Property is not replaced, then the insured physical loss or damage shall be settled on the Actual Cash Value basis with proper deduction for depreciation, salvage, or other recovery and exclusive of profit and overhead.
b. With respect to scaffolding, form work, fences, shoring, boarding, falsework and temporary structures, the actual cash value of the lost or damaged property at the time and place of insured physical loss or damage.
c. With respect to the property of others for which the Insured may be legally liable or owner supplied material, equipment, machinery and supplies, the cost to repair or replace the property with material of like kind and quality including contractor’s charges incurred prior to insured physical loss or damage and related to such property, if any, less betterment or the property owner’s cost, whichever is less.
d. With respect to plans, blueprints, drawings renderings specifications or other contract documents or models, the cost to reproduce with property of like kind and quality including the cost of gathering or assembling information from back up data if replaced. If not replaced, the value of blank material.
e. With respect to trees, shrubs, grass, plantings and landscaping, the cost to replace with property of like kind, size and quality including the proper proportion of labor expended if such damage occurs after installation.
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f. With respect to property in transit, the invoice cost including the accrued shipping charges less shipper’s liability, if any.
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6. Cancellation
a. The first Named Insured shown in the Declarations may cancel this policy by mailing or delivering to the Company advance written notice of cancellation.
b. Subject to applicable law, the Company may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation at least:
(1) Ten (10) days before the effective date of cancellation if the Company cancels for nonpayment of premium; or
(2) Sixty (60) days before the effective date of cancellation if the Company cancels for any other reason.
c. The Company will mail or deliver its notice to the first Named Insured's last mailing address known to the Company.
d. Notice of cancellation will state the effective date of cancellation. The policy period will end on that date.
e. If this policy is cancelled, the Company will send the first Named Insured any premium refund due. If the Company cancels the policy, the refund will be computed on a pro rata basis. If the first Named Insured cancels the policy, the refund will be computed in accordance with the customary short rate table and procedure subject to the Minimum and Earned premium. The cancellation will be effective even if the Company has not made or offered a refund.
f. The cancellation notice may be sent to the first Named Insured by mail or facsimile. If the cancellation notice is mailed, proof of first class, certified or registered mailing (U.S. postal service) or use of overnight reputable courier, will serve as sufficient proof of notice. If the cancellation notice is sent via facsimile, proof of receipt of the facsimile transmission shall serve as sufficient proof of notice.
7. Changes
This policy contains all the agreements between the Insured and the Company concerning the insurance afforded. The first Named Insured shown in the Declarations is authorized to make changes in the terms and conditions of this policy, but only with the written consent of the Company. The policy's terms and conditions may only be amended or waived by endorsement issued by the Company and made a part of the policy.
8. Books and Records The Insured will keep accurate book and records of all costs which relate to property covered by this policy and will retain them for a period of three (3) years after the policy ends. The books and records shall be kept in such a manner that the “Total ProjectValue” of the “Insured Project” and the exact amount of any insured physical loss or damage can be accurately determined. The Company or its representative may examine and audit the Insured’s books and records as they relate to this policy at any time during the policy period and up to three (3) years afterward. The Insured shall permit extracts and copies of such books and records to be provided to the Company as requested. 9. Inspections and Surveys
a. The Company has the right to:
(1) Make inspections and surveys at any time;
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(2) Give the Insured reports on the conditions the Company finds; and
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(3) Recommend changes.
b. The Company is not obligated to make any inspections, surveys, reports or recommendations, and any such actions the Company undertakes relates only to insurability and the premiums to be charged. The Company does not make safety inspections. The Company does not undertake to perform the duty of any person or organization to provide for the health or safety of workers or the public and the Company does not warrant that the conditions:
(1) Are safe or healthful; or
(2) Comply with laws, regulations, codes or standards.
10. Insured’s Representative
The first Named Insured shown in the Declarations shall be the sole and irrevocable agent of each and every Insured for the purpose:
a. Payment of all premiums and the payee for any return premiums the Company pays;
b. Giving and receiving notices under this policy; or
c. Requesting policy amendments or accepting amendments to the policy made by the Company.
11. Transfer of the Insured’s Rights and Duties under this Policy
The Insured’s rights and duties under this policy may not be transferred without the Company’s written consent.
However, upon the bankruptcy, insolvency, adjudication of incompetency or death of any Insured, should any Insured die or be adjudged incompetent, bankrupt or insolvent, the Company shall consent to the assignment of Insured’s rights and duties to the Insured’s legal representative, but only while acting within the scope of duties as the Insured’s legal representative and provided that written notice is given to the Company within thirty (30) days after the date bankruptcy, insolvency, adjudication of incompetency or death of the Insured.
12. Loss Payee and Mortgagee Interests and Obligations a. The Company will pay for loss or damage to Covered Property insured under this policy to each specified loss payee (hereinafter, referred to as “Payee”) as its interest may appear; and pay to each specified mortgagee (hereinafter, referred to as “Mortgagee”) as its interest may appear, under all present or future mortgages upon such property, in order of precedence of the mortgages. b. The interest of the Payee or Mortgagee (as the case may be) in Covered Property under this policy will not be invalidated by: (1) Any act or neglect of the debtor, mortgagor, or owner (as the case may be) of the property; (2) Foreclosure, notice of sale, or similar proceedings with respect to the property; (3) Change in the title or ownership of the property; or (4) Change to a more hazardous occupancy.
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The Payee or Mortgagee will notify the Company of any known change in ownership, occupancy, or hazard. Such party, within ten (10) days of written request by the Company, may pay the increased
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premium associated with such known change. If the Payee or Mortgagee fails to pay the increased premium, all coverage under this policy will cease. c. If this policy is cancelled at the request of the Insured or its agent, the coverage for the interest of the Payee or Mortgagee will terminate ten (10) days after the Company sends to the Payee or Mortgagee written notice of cancellation, unless:
(1) Sooner terminated by authorization, consent, approval, acceptance, or ratification of the Insured's action by the Payee or Mortgagee, or its agent; or (2) This policy is replaced by the Insured, with a policy providing coverage for the interest of the Payee or Mortgagee. Then, coverage under this Policy with respect to such interest will terminate as of the effective date of the replacement policy despite any other provisions of this Policy.
d. The Company may cancel this policy and/or the interest of the Payee or Mortgagee under this policy. The Company will give the Payee or Mortgagee written notice sixty (60) days prior to the effective date of cancellation, if cancellation is for any reason other than non‐payment. If the debtor, mortgagor, or owner has failed to pay any premium due under this policy, the Company may cancel this policy for such non‐ payment. The Company will give the Payee or Mortgagee written notice ten (10) days prior to the effective date of cancellation. If the Payee or Mortgagee fails to pay the premium due by the specified cancellation date, all coverage under this policy will cease. e. If the Company pays the Payee or Mortgagee for any loss and denies payment to the debtor, mortgagor or owner; the Company will, to the extent of the payment made to the Payee or Mortgagee, be subrogated to the rights of the Payee or Mortgagee under all securities held as collateral to the debt or mortgage. No subrogation will impair the right of the Payee or Mortgagee to sue or recover the full amount of its claim. At its option, the Company may pay to the Payee or Mortgagee the whole principal due on the debt or mortgage plus any accrued interest. Then, all rights and securities will be assigned and transferred from the Payee or Mortgagee to the Company; the remaining debt or mortgage will be paid to the Company. f. If the Insured fails to render proof of loss, the Payee or Mortgagee, upon notice of the Insured's failure to do so, will render proof of loss within sixty (60) days of notice and will be subject to the provisions of this policy relating to Appraisal, Loss Payment, and Legal Action Against The Company. g. Other provisions relating to the interests and obligations of the Payee or Mortgagee may be added to this policy by agreement in writing. 13. Premium, Rates and Reporting Provision
This policy is subject to a deposit premium and a minimum and earned premium as shown on the Declarations. The Named Insured shall report the actual “Total Project Value” at the time of expiration, cancellation, or any extension of the policy. The final earned premium shall be computed by applying the rates shown on the Declarations tothe actual term of the policy and the actual “Total Project Value” at the time of expiration, cancellation, or any extension of the policy. If the premium calculated differs from the deposit premium shown in the Declarations, such premium shall be due and payable to the Named Insured or the Company, as appropriate, subject to any minimum and earned premium. There shall not be any return premium in the event the final “Total Project Value” falls below the estimated “Total Project Value” stated under “Insured Project” above or if the “Insured Project” is completed prior to the date of expiration of the policy.
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14. Partial Loss
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The Company grants the Named Insured permission to repair partial damage to the Covered Property which can be conveniently and advantageously undertaken to protect the Covered Property from further damage. The Company will reimburse the Insured who has suffered the loss for the actual cost of such repairs, subject to the terms and conditions of this policy. Nothing in this clause shall be deemed to have waived the requirement that notice of loss be given to the Company as provided in the policy.
15. Increased Hazard
If the circumstances in which this insurance was entered into shall be altered or if the risk shall be materially increased, the Named Insured shall give notice in writing to the Company within thirty (30) days of the Named Insured's knowledge of the same.
16. Alternative Dispute Resolution
If the Company and the Named Insured disagree on an issue concerning this policy after making a good faith effort to reach an agreement, either party may request that the following procedure be used to settle such disagreement: a. Except with respect to disputes regarding the non‐payment of premium, any dispute arising out of the interpretation, performance or breach of this policy, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators. Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt requested.
b. One arbitrator shall be chosen by each party, and the two arbitrators shall then choose an impartial third arbitrator who shall preside at the hearing. If either party fails to appoint its arbitrator within thirty (30) days after being requested to do so by the other party, the latter, after ten (10) days’ prior notice by certified or registered mail of its intention to do so, may appoint the second arbitrator.
c. If the two arbitrators are unable to agree upon the selection of a third arbitrator within sixty (60) days of their appointment, the third arbitrator shall be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded, established by the American Arbitration Association. The arbitrators shall be persons who are very knowledgeable in insurance matters and have no personal or financial interest in the result of the arbitration. If a member of the panel becomes disabled, dies or is otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and the arbitration shall continue.
d. Within thirty (30) days after all arbitrators have been appointed, the panel shall meet and determine timely periods for briefs, discovery procedures and schedules of hearings.
e. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence. Any arbitration shall take place in New York, New York. The decision of any two arbitrators shall be in writing and shall be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.
f. Judgment upon an award may be entered in any court having jurisdiction thereof.
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g. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the third arbitrator. The remaining costs of the arbitration shall be allocated by the panel. The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’ fees, to the extent permitted by law, but shall have no power to award punitive, exemplary or treble damages.
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F. DEFINITIONS
1. “Computer virus” means a set of corrupting, harmful or otherwise unauthorized instructions or code including a set of maliciously introduced unauthorized instructions or code, programmatic or otherwise, that propagate themselves through a computer system or network of whatsoever nature. “Computer virus” includes but is not limited to ‘trojan horses’, ‘worms’ and ‘time or logic bombs’. 2. “Earth movement” means all land movement including, but not be limited to, earthquake, shocks, tremors, earth rising or shifting, landslide, volcanic action, subsidence, sinkhole collapse, tsunami, rock fall or any other movement of earth. 3. “Electronic data” means facts, concepts and information converted to a form useable for communications, interpretation or processing by electronic and electromechanical data processing or electronically controlled equipment and includes programs, software and other coded instructions for the processing and manipulation of data or the direction and manipulation of such equipment. 4. “Flood”, except as included under the Definitions of “Earth movement” and “Windstorm”, means:
a. A general and temporary condition of complete inundation of normally dry land areas, including dewatered areas, from:
(1) The overflow of inland or tidal waters;
(2) The unusual and rapid accumulation or runoff of surface waters;
(3) Mudslides (i.e. mudflows) which are caused by flooding as defined in subparagraph a. (2) above and are akin to a river of liquid mud on the surfaces of normally dry land areas, as when earth is carried by a current of water and deposited along the path of the current; (4) Breaches of levees or dikes; or (5) Dam failures.
b. The collapse or subsidence of land along the shore of a lake or other body of water as a result of
erosion or undermining caused by waves or currents of water exceeding the cyclical levels which result in flooding as defined in a. (1) above.
5. “Fungus” means any type or form of fungus, including mold or mildew, and any mycotoxins, spores, scents or by‐products produced or released by fungi.
6. “Hot Testing” means any start‐up, commissioning or other form of testing making use of any feedstock, including operational tests and performance tests performed in conjunction with “hot testing”. “Hot testing” includes the examination, experiment or trial of Covered Property such as ovens, boilers, turbines, generators, pumps, process equipment or equipment of a similar nature to prove their ability or function. “Hot testing” does not include the start‐up and testing of building systems such as sprinkler systems, plumbing, piping systems, gas lines, air conditioning lines, elevators, or escalators.
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7. “Hot Testing Period” means the period beginning with the introduction into the Covered Property of feedstock, catalyst or similar media for processing and handling or the commencement of supply to a system and continuously thereafter, whether or not such “hot testing”, commissioning or start‐up is continuous or intermittent and terminating at the end of the designated period of time as shown on the Declarations.
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8. “Insured Project” means work which the Insured is contractually obligated to perform at the designated location where the Covered Property will be permanently located at the completion of such work as described on the Declarations.
9. “Named storm” means any hurricane or any other storm or weather disturbance which are named by the World Meteorological Organization, United States National Weather Service, National Hurricane Center, or similar governing body or worldwide equivalent. 10. “Occurrence”, with the exception of the perils of “windstorm” (including "named storm”), “earth movement”, and “flood”, means any loss, disaster or casualty, or series of losses, disasters, or casualties, arising out of one event. With respect to the perils of “windstorm” (including "named storm”), “earth movement”, or “flood”, “occurrence” shall mean all losses sustained by the Insured as the result of loss or damage from “windstorm” (including "named storm”), “earth movement”, or “flood” occurring during a continuous period of seventy‐two (72) hours. When filing a proof of loss, the Insured may elect the moment at which the seventy‐two (72) hour period shall be deemed to have commenced, which shall not be earlier than the first loss sustained by any covered property under the policy. The Company shall not be liable for any such loss occurring before the effective date and time or occurring after the expiration date and time of this policy. 11. "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. 12. “Prototype machinery and equipment” means new models or modified models of major machinery or equipment with less than 8,000 hours of installed successful fleet running experience. 13. "Terrorism" means activities against persons, organizations or property of any nature: a. That involve the following or preparation for the following: (1) Use or threat of force or violence; (2) Commission or threat of a dangerous act; or (3) Commission or threat of an act that interferes with or disrupts an electronic,communication, information, or mechanical system; and b. When: (1) The effect is to intimidate or coerce a government or a civilian population or any segment thereof, or to disrupt any segment of the economy; and/or (2) It appears that the intent is to intimidate or coerce a government or a civilian population, or to further a philosophical, political, ideological, religious, social or economic objective or to express (or express opposition to) a philosophical, political, ideological, religious, social or economic objective.
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14. “Total Project Value” means the sum of the replacement cost of all Covered Property. Replacement cost of Covered Property shall include, but not be limited to, cost of labor, materials, equipment, machinery, supplies, overhead and construction management fees, and the replacement cost of owner supplied materials, equipment, machinery and supplies.
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15. “Used machinery and equipment” means any mechanical or electrical machine or equipment, including a pressure and non pressure vessel, which has been previously installed or refurbished, or is no longer under a standard manufacturer’s warranty.
16. “Water damage” means all damage caused by water, whatever the source, whether or not driven by wind, other than that otherwise defined as “flood”.
17. “Windstorm” means an atmospheric disturbance accompanied by wind, including any substance driven by wind, “named storm”, typhoon, rainstorm, thunderstorm, hailstorm, sleet, cyclone, tornado, hurricane or any combination of the foregoing and including any resulting flood, tidal or wave action. Ironshore Specialty Insurance Company by: Secretary President
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