gauntlett v. illinois union insurance company exhibit policies

8/7/2019 GAUNTLETT v. ILLINOIS UNION INSURANCE COMPANY Exhibit Policies

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Case5:11-cv-00455-LHK Document1-1 Filed01/28/11 Page1 of 20

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o Westchesler Surplus Lines Insurance CompanySix Concourse Parkway, Ste. 2500Atlanta, GA 30328-5346~ l I I i n o i S Union Insurance Company525 W. Monroe St., Ste., 400Chicago, IllinoIs 60661

Employment PracticesInsurance CoverageClaims First Made andReported

THE INSURED IS REQUESTED TO READ THIS POLICY.

NO 12 62 65 8

IN ALL COMMUNICAnONS THE POLICY NUMBER SHOULD BE QUOTED

IF THIS POllCY IS INCORRECT, PLEASE RETURN IT IMMEDIATELY TO YOUR BROKER ORAGENT FOR ALTERATION BY:

{

~ S p e C i a l t y BISV'frPrograms.1165. Cnnton Street, Suite 450, Chicago, IL 60661Tel: (312) 879-1079 Fax: (312) 879-i335www.b;SYscOm01efcialins.com CA License #0699854

EXHIBIT

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NO 12 6265 8 NOTICE

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3.

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5.

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THE INSURANCE POLICY THAT YOU ARE APPLYING TOPURCHASE IS BEING ISSUED BY AN INSURER THAT IS NOTLICENSED BY THE STATE OF CALIFORNIA. THESE COMPANIESARE CALLED "NONADMITTED" OR "SURPLUS LINES" INSURERS.THE INSURER IS NOT SUBJECT TO THE FINANCIAL SOLVENCYREGULATION AND ENFORCEMENT WHICH APPLIES TOCALIFORNIA LICENSED INSURERS.THE INSURER DOES NOT PARTICIPATE IN ANY OF THEINSURANCE GUARANTEE.FUNDS CREATED BY CALIFORNIA LAW.THEREFORE, THESE FUNDS WILL NOT PAY YOUR CLAIMS ORPROTECT YOUR ASSETS IF THE INSURER BECOMES INSOLVENTAND IS UNABLE TO MAKE PAYMENTS AS PROMISED.CALIFORNIA MAINTAINS A LIST OF ELIGIBLE SURPLUS LINEINSURERS APPROVED BY THE INSURANCE COMISSIONER. ASKYOUR AGENT OR BROKER IF THE INSURER IS ON THAT LIST.FOR ADDITIONAL INFORMATION ABOUT THE iNSURER YOUSHOULD ASK QUESTIONS OF YOUR INSURANCE AGENT, BROKER,OR "SURPLUS LINE" BROKER OR CONTACT THE CALIFORNIADEPARTMENT OF INSURANCE, AT THE FOLLOWING TOLLFREETELEPHONE NUMBER: 1-800-927-4357.IF .YOU, AS THE APPLICANT, REQUIRE THAT THE INSURANCEPOLICY YOU HAVE PURCHASED !:IE BOUND IMMEDIATELY,EITHER BECAUSE EXISTING COVERAGE WAS GOING TO LAPSEWITHIN TWO BUSINESS DAyS OR BECAUSE YOU WERE REQUIREDTO HAVE COVERAGE WITHIN TWO BUSINESS DAYS, AND YOU DIDNOT RECEIVE THIS DISCLOSURE FORM AND A REQUEST FORYOUR SIGNATURE . UNTIL AFTER COVERAGE BECAMEEFFECTIVE, YOU HAVE THE RIGHT TO CANCEL THIS POLICYWITHIN FIVE DAYS OF RECEIVING THIS DISCLOSURE. IF YOUCANCEL COVERAGE, THE PREMIUM WILL BE PRORATED ANDANY BROKER FEE CHARGED FOR THIS INSURANCE WILL BERETURNED TO YOU.

Date: 7/28/2006 15Insured: David A. Gauntlett; dba Gauntlett & Assol

;F 198230273670 00741 01 (EFFECTIVE JANUARY 1,2005 THROUGH DECEMBER 31, 2007)- .


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o Westchester Surplus Lines Insurance CompanySix Concourse Parkway, Ste. 2500Atlanta. GA 30328-5346nUnois Union Insurance Company525 W. Monroe St.. Ste . 400Chicago, Illinois 60661

Employment PracticesInsurance CoverageClaims First Made andReported

THIS IS A CLAIMS-MADE AND REPORTED POLICY - PLEASE READ IT CAREFULLY.NOTICE: THIS IS A CLAIMS-MADE AND REPORTED POLICY. EXCEPT AS OTHERWISE STATEDTHE COVERAGE PROVIDED BY THIS POLICY IS LIMITED TO LIABILITY FOR EMPLOYMENT-RELATEDDISCRIMINATION, EMPLOYMENT-RELATED HARASSMENT AND INAPPROPRIATE .EMPLOYMENTFOR WHICH CLAIMS ARE FIRST MADE AGAINST THE INSURED WHILE THE POLICY IS IN FORC.E ANDTHAT ARE REPORTED TO US DURING THE POLICY PERIOD OR ANY LIMITED OR EXTENDEDPERIOD. THIS POLICY DOES NOT APPLY TO CLAIMS FIRST MADE AGAINST THE INSURED AFTER THETERMINATION OF THE POLICY UNLESS, AND IN SUCH EVENT ONLY TO THE EXTENT THAT, A LIMITEDOR EXTENDED REPORTING PERIOD APPLIES.THE LIMITS OF LlABIL.lTY AVAILABLE TO PAY DAMAGES, INCLUDING JUDGMENT OR SETTLEMENTAMOUNTS, SHALL BE REDUCED BY AMOUNTS. INCURRED FOR DEFENSE COSTS. AMOUNTSFOR DEFENSE COSTS AND DAMAGES SHALL ALSO BE APPLIED AGAINST THE SELF INSUREDRETENTION AMOUNT.THE APPLICATION FORM AND ATTACHMENTS ARE HEREBY ATTACHED TO AND MADE A PART OFTHIS POLICY.POLICY NUMBER: NO 12626581. NAMED INSURED: David A. Gauntlett; dba Gauntlett & Associates

( ) Individual ) Partnership ( ) Corporation ( ) Joint Venture (X ) Other

2. POLICY PERIOD: FROM: 07/10/2006 TO: 07/1D/2007AT 12:01AMSTANDARD TIME AT THE ADDRESS SHOWN IN NUMBER 3 BELOW.3.

4.

ADDRESS: 18400 Von Karman,Ste.300Irvine, CA 92612LIMIT OF LIABILITY: $1,000,000(INCLUDING COSTS OF NILDEFENSE) $1,000,000

Each First Party Insured Event LimitPunitive Damage l .imltTotal Aggregate l.imit

5. SELF INSURED RETENTION: $10,0006. CO"PAYMENT: (This is your portion of PARTICIPATION for each and every Claim).7. PREMIUM: $6,500.00$198.00 CA Surplus Lines Tax$11.55 CA Stamping Fee

$6,809.55 Total

$ NIL


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o Westchester Surplus Lines Insurance CompanySix Concourse Parkway, Ste, 2500 Employment PracticesInsurance Coverage

Claims First Made andReported

Atlanta. GA 30328-5346Illinois Union Insurance Company525 W. Monroe St.. Ste .. 400Chicago, Illinois 60661

8. AUTHORIZEDREPRESENTATIVES:Attn: Laura R. ZaroskiDonohue Brown Mathewson & Smyth LLC140 Broadway. 40th Floor New York. NY 10005Direct (312) 422-4908 Phone (312) 422-0900 Fax (312) 422-0909E-mail: l a u r . < : ! . z ~ r o s k i @ d b m s l a w . G o m

9. DATE OF APPLICATION: 06/15/2006SURPLUS LINES TAXES ARE FILED BY: ECM Insurance Services, Inc.SPECIAL CONDITIONS: PF-11580, CA Notice 2005, PF-11519, XS1U96D,PF-11540,TR-17345, TRIA15,ILP001

Authorized Representative'


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ACE USA--

Employment PracticesInsurance

PLEASE READ THIS POLICY IN IT S ENTIRETY. SOME OF THE PROVISIONS CONTAINED IN THIS POLICYRESTRICT COVERAGE, SPECIFY WHAT IS AND IS NOT COVERED AND DESIGNATE RIGHTS ANDDUTIES.This policy covers Claims alleging Employment.relatedDiscrimination, Employment.related Harassment andInappropriate Employment Conduct liability in accordance with the terms, conditions, limitations and exclusionsset forth in this policy. It has been issued in reliance upon statements made to us in the Application and anyattachments thereto, which are incorporated herein and form par t of this policy.Throughout this policy the words "you" and "your" refer to the Named Insured shown in the Declarations, andany other person or organization qualifying as a Named Insured.Under this policy the words "we". "us" and "our" refer to the underwriters providing this insurance.The word "Insured" means any person or organization qualifying as such under Section V. WHO IS INSURED.Other words and phrases that are initially capitalized have special meanings as set forth in Section XI.DEFINITIONS.I. COVERAGE: WHAT IS COVERED

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A. We will pay Loss amounts that the insured is legally obligated to pay on account of a Claimbecause of an Insured Event to which this policy applies. However. the amount we will pay islimited as described in Section VI. COVERAGE LIMITS, Section IX. COPAYMENT and SectionVII. SELF INSURED RETENTION ofthis policy_B. This policy applies only if:

1. A Claim is first made against the insured in accordance with Section III. WHENCOVERAGE IS PROVIDED;2. The Claim is first reported in accordance with Section III. WHEN COVERAGE ISPROVIDED section and the CONDITIONS section X. A. Duties in the Event of a Claim;

and3. The Insured Event takes place within the Coverage Territory.

C. Defense. We have the right a-nd duty to defend any Claim made or brought against any Insuredto which this policy applies. We will give consideration to your preference for defense counsel;however, the final decision is ours. We have no duty to provide other_ services or take otheractions. Our duty to defend any Claim ends when the COVERAGE LIMITS that apply have beenexhausted.You may take over control. of any outstanding Claim previously reported to us only if we bothagree that you may do so or if required under law or if a court orders you to do so.If your COVERAGJ: LIMITS are exhausted, we will notify you of an outstanding Claims so thatyou can take over control of their defense. We will help transfer control to you.

D, During the transfer of control. We agree to take whatever steps are necessary to continue thedefense of any outstanding Claim and avoid a defaUlt judgment during the transfer of control toyou. If we do so, you agree to pay reasonable expenses we incur for taking such steps after theCOVERAGE LIMITS ars exhausted.E. Duty to pay. We have the duty to pay any Loss that results from any Claim made or broughtagainst any insured to which this policy applies. Our duty to pay ends when the availableCOVERAGE LIMITS have been exhausted. We will not pay more than the applicableCOVERAGE LIMITS _ We have the duty to pay Defense Costs incurred for the defense of anyClaim which is controlled by us. Payment of Defense Costs are included in the COVERAGELIMITS and are not in addition to the COVERAGE LIMITS.

CODvnoht ACE USA. 2002 Page 1 of 10


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F. Consent To Settle. We may, with the consent of the insured, which shall not be unreasonablywithheld, settle any Claim for solely a monetary amount which we deem reasonable. If theinsured withholds consent to such settlement, our liability for all Loss on account of such Claimshall not exceed the amount for which we could have settled such Claim plus Defense Costsaccrued as of the date such settlement was proposed in writing by us to theinsured..EXCLUSIONS: WHAT IS NOT COVEREDA. Workers Compensation. This policy does not cover any Loss arising out of any obligationunder worker's compensation, disability benefits or unemployment 'compensation law, or anysimilar law. This exclusion does not apply to any Claim for retaliation, Employment-relatedDiscrimination or ' Inappropria:te. Employment Conduct on account of the filing of ' a workerscompensation claim, a claim for disability benefits, a claim for unemployment compensation,or aclaim under any similar law.B, Contractual Liability. This policy does no t cover any Loss for an Insured Event which anyinsured is obligated to pay by reason of the assumption of another's liability in a contract oragreement. This exclusion will not apply to l iability for damages because of an Insured Event thatthe insured would have without the contract or agreement.C. Employee Retirement Income Security Act and Other Laws. This policy does not cover anyLoss imposed on the insured under:

D.

E.

F.

. 1. The Employee Retirement Income Security Act of 1974 Public Law 93-406, or anyamendments thereto, or any similar federal, state or local law;2, The Fair Labor Standards Act (except the Equal Pay Act);3. The National Labor Relations Act or Labor Man"gement Relations Act;4. The Worker Adjustment and Retraining Notification Act;5. The Consolidated Omnibus Budget ReconCiliation Act of 1985;6. The Occupational Safety and Health Act; or7. Rules or regulations promulgated Ulider any of such statutes or laws, amendmentsthereto or similar provisions of any federal, state or local statutory law or common law;but this exclusion shall not apply to any Claim for any actual or alleged retaliatory treatment of theclaimant by the insured on account of the c1aimant;s exercise of rights pursuant to any such law,rule or regulation.Strikes and Lockouts. This policy does not cover any Loss arising out of a lockout, strike,picket line, replacement or other similar actions resulting from labor. disputes or labornegotiations.Consequential Loss. This' policy does not COver Loss to any claimanfs domestic partner,spouse, child, parent, brother or sister as a consequence of an Insured Event.Prior Knowledge, Notice & Litigation. This policy does not cover any Loss based upon, arisingout of, related to, or direc;tly or indirectly in connection with:1, Any fact, situation or circumstance that, prior to the inception date of this policy, anyManagement or Supervising Employee had reason to believe might r e s u ~ in a Claim;

provided, however, that if you have maintained, in continuous force, a policy to provideinsurance Similar to this policy, this exclusion shall apply only to facts, situations, orcircumstances that existed on or prior to the inception date of such insurance.2. Any notice given to any insurer prior to the inception date of this policy; or3. Any Claim made prior to the inception date of this policy or any fact, situation, orcircumstance underlying such Claim.

G. Bodily Injury and Property Damage. This policy does not cover any Loss arising from bodilyinjury (other than emotional distress or mental anguish), sickness, disease or death of anyperson, or for damage to or destruction of any tangible property including loss of use' thereof,H. Intentto Cause Damage. This policy does not cover any Loss based upon, ariSing out of,.orattributable to any act committed by an Insured with intent to cause damage if a final and non-


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appealaple judgment or adjudication adverse to such insured establishes that such insuredcommitted such a wrongful act.I. Pollution. This policy does not cover any Loss based upon, arising out of, or attributable to:

1. The actual, alleged or threatened discharge, release, escape, seepage, migration ordisposal of Pollutants into or on real or personal property, water or the atmosphere; or2. Any direction or request that the Insureds test for, monitor, clean up, remove, contain,

treat, detoxify or neutralize Pollutants, or any voluntary decision to do so;but this exclusion shall not apply with respect to any Claim fo r retaliatory treatment of theciaimgmt 'bY- fhe insuied' on account of the claimant's actual or threatened disclosure of the .matters described in t. or 2. of this exclusion.J. Gain or Profit. This policy does not cover any Loss based upon, arising out of, or attributaple toan insured gaining in fact any profit, remuneration or financial advantage to which such Insured

was not legally entitled.K. Remedial; Preventive and Non-monetary Awards or Directives. This policy does not cover

the cost of any remedial, preventive or other non-monetary awards or directives including withoutlimitation:1. An y costs associated with compliance with any such award or directive of any kind ornature imposed Py the terms of any judgment. settlement, or Py governmental authority,

or2. Any costs' associated with providing any reasonaPle accommodations required by, madeas a result of, or to confonn with the requirements of the i-\mericans v'/ith Disabmties Actand ahy amendments thereto or any similar federal, state or local statute, regulation, orcommon laws.

L. Compensation Earned or Due. This policy does not cover compensation eamed by or due tothe claimant in the course of employment but not paid, including any unpaid salary, bonus, hourlypay, overtime pay, severance pay, retirement benefits, vacation days or sick days; put thisexclusion shall no t apply to any Pack payor front payor any additional compensation allegedlydue as a result of Employment-related Discrimination.

M. Employment Contracts. This policy does not cover amounts determined to be payable underan express written contract with or express written severance obligation of the insured; but th isexcl\lsion shall no t apply if and to the extent that liability would have attached to the insured in theaPsence ofthe written contract with or oPligation of the insured.

N. Medical an d Insurance Benefits. This policy does not cover any loss ariSing from the insured'sfailure to provide any medical or insurance benefits to which the claimant alleges to have beenentitled or would have been entitled had the insured provided the claimant with 11 continuation orconversion of insurance.III. WHEN COVERAGE IS PROVIDED

A. This policy applies only to Claims arising out of an Insured Event that are first made or broughtduring the Policy Period and reported during the Policy Period or, if applicable, during the Limitedor the Extended Reporting Period. A Claim is considered to be first made on the date aManagement or Supervising Employee is served or first receives notice of a Claim. The date ofClaim ari1iing from a fact, situation or circumstance reported in accordance with the Notice ofPotential Claim Condition will be the date notice is given under the policy.

B. Limited Reporting Period means the thirty (30) day period after the policy ends, during whichClaims first made Of brought during the Policy Period can be reported.C. Extended Reporting Period. If thispolicy is non-renewed or canceled by the Named Insured ornon-renewed by us, an Extended Reporting Period of twelve (12) months can be added by

means of an Extended Reporting Period Endorsement along with the payment of an additionalpremium.The Extended Reporting Period Endorsement will not be issued unless we receive a writtenrequest fo r it within fifteen (15) days after the policy ends, and will not take effect unless the


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IV.

D.

The additional premium for the Extended Reporting Period Endorsement will be one hundredpercent (100%) of the premium charged forthe last Policy Period. Alternatively, an ExtendedReported Period of twenty four (24) monthS may be purchased for one hundred and fifty percent(150%) of the premium charged for the last Policy Period, or an Extended Reporting Period of- thirty six (36) months may be purchased for one hundred and seventy five percent (175%) of thepremium charged for the last Policy Period.However, the Extended Reporting Period will not apply to any Claim if other insurance you buycovers you or would cover you if its limits of coveragehad not been exhausted.Coverage under the Extended Reporting Period is limited to Insured Events which happen orcommence before the Policy. Period ends and which are otherwise covered by this policy.H o ' ; " ' t h ~ COVERAGE'iTMITS apply to the 'Limited and the Extended Reporting Periods. TheCOVERAGE LIMITS that apply at the end of the Policy Period are not renewed or increased andthe Limits, as shown in the Declarations, are not increased by the Limited Reporting Period or theaddition of the Extended Reporting Period.

COVERAGE TERRITORYThis policy covers Insured Events that occur anywhere in the world, provided that the Claim is broughtwithin the United States of America, its territories and possessions, or Canada.

V. WHO IS INSUREDA. Individual. If you are shown in the Declarations as an individual, you or your spouse areinsureds but only for the conduct of a business of which you are the sole-owner.B. Corporation. If you are shown in the Declarations as a corporation or organization other than apartnership or joint venture, you are an insured. Your stockholders are also insureds, but onlywith respect to their liability as your stockholders.C. Partnership or joint venture. If you are shown in the Declarations as a partnership or jointventure, you are_ an insured. Your partners or co-ventures and their spouses are also insureds,but only lo r the conduct of your business.

However, no person- or organization is covered for the conduct of any current or past partnershipor joint venture not named in the Declarations.D. Employees. Your Employees, executive officers, directors and your trustees are insureds only

for the conduct of your business within the scope of their employment. Your Employee's status asan insured will be determined as of the date of the alleged Employment-related Discrimination,Employment-related Harassment or Inappropriate Employment Conduct that caused the InsuredEvent.E. Acquisition.,. Any organization that you newly acquire or form while this policy is in effect is aninsured if you own at least fifty one percent (51%) of it and the number of employees of suchnewly acquired or formed organization do not exceed 20% ot.the number of employees listed onthe application for this policy. However, If the employees exceed -20%, no newly acquired orformed organization is covered for more than ninety (90) days or the remainder of the PolicyPeriod, Whichever is less, from the date acquired or formed unless we agree to cover suchacquisition or newly formed organization within such ninety (90) day period in consideration of anadditional premium to be determined by us. Notwithstanding the foregoing, any acquired orformed organization is not covered for Loss that results from an Insured Event that happened or

first commenced before the Insured acquired or formed it; nor for Loss covered under any otherinsurance.This paragraph does not apply to a partnership or joint venture nor does it apply to anyorganization once it is shown in the Declarations of this policy. -

VI. COVERAGE LIMITSA. The limits shown in the Declarations of this policy and the information contained in theCOVERAGE l iMITS section establish the most we will pay regardless of the number of insureds

or Claims made.


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A. The limits shown in the Declarations of this policy and the information contained in theCOVERAGE LIMITS section establish the most we will pay regardless of the number of insuredsor Claims made.

B. Each First Party Insured Event l imit. This is the. most we will pay for Claims first made orbrought during the Policy Period for Loss that results from anyone First Party Insured Eventregardless of the number of Claims.C. Total Aggregate Limit. This is the most we will pay for the combined total of all Claims first

made. or brought during the Policy Period fo r Loss that results from all Insured Events.D. Punitive Damage Limit. This is the most we will pay for any Claim for punitive or exemplary .damages. The Punitive Damage Limit is part of and not in addition to the Each First PartyInsured Event Limit and the Total Aggregate Limit. .E. How the COVERAGE LIMITS apply to an extension of the Policy Period. If this Policy Periodis extended, the Limits as shown in the Declarations shall not in any way increase. For purposesof the Coverage Limits any policy extension is considered to be part of and not in addition to the

former Policy Period.VII. SELF INSURED RETENTION

Our obligation to pay under this policy applies only to the amount of Loss in excess of any Self InsuredRetention amount, as shown in the Declarations, and the COVERAGE LIMITS will not be reduced by theamount of such Self Insured Retention. The Self Insured Retention amount applies separately to eachClaim; however, the Self Insured Retention will apply only once to all Claims arising out of anyoneInsured Event regardless of the number of claimants who aUege damages.

Vlll. SPOUSAL COVERAGEThe estates, heirs, legal representatives, assigns and spouses of an insured shall be considered aninsured under this policy; but coverage is affordeq to such estates, heirs, legal representatives, assignsand spouses only fo r a Claim arising solely out of their status as such and, in the case of a spouse, wheresuch Claim seeks damages from marital community property, jointly helq property or property transferredfrom the insured to the spouse. No coverage is provided for any wrongful act of an estate, heir, legalrepresentative, assign or spouse. All terms and conditions of this policy, including without limitation theSELF INSURED RETENTION, applicable to Loss incurred by the insured shall also apply to loss incurredby such estates, heirs, legal representatives, assigns and spouses.

IX. CO-PAYMENTAfter the Self Insured Retention, as shown in the Declarations, has been paid by the insured, we will paythe amount of the Loss excess of the Co-payment percentage, as shown in the Declarations.

X. CONDITIONS.We have no duty to provide coverage under this pol icy unless there has been full compliance with all theconditions contained in this policy.A. DutIes in th e Event of a Claim

1. You must ensure we are given written notice within 30 days after a Claim is made or assoon as practicable..Notice should include:a. The names of the potential claimants and a description of the specific

Employment-related Discrimination,' Employment-relateq Harassment, orInappropriate Employment Conduct that forms the basis of their potential claim;b. The identity of the specific . insureds allegedly responsible for such specificEmployment-Related Discrimination, Employment-related Harassment, orInappropriate Employment Conduct;c. The consequences Which have resulted or may result from such specificEmployment-Related Oiscrimination, Employment.related Harassment, orInappropriate Employment Conduct;d. The nature of the potential monetary damages which may be sought incanseq uence of such specific Employment-Related Discrimination, Employmentrelated Harassment, or Inappropriate Employment Conduct; and


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e.

f.

The circumstances by which the insureds first became aware of such specificEmployment-Related Discrimination, Employment-related Harassment, orInappropriate Employment Conduct.Paragraphs a. through e. above also apply to Third Party Discrimination andThird Party Harassment if the Third Party Coverage Endorsement is attached tothis policy.

2. You and any other insured must:a.

h.c.

Authorize us or our Authorized Representatives, as shown in the Declarations, toobtain records and other information;Co"operate with us or our Authorized Reprasentatives, as shown in theDeclarations, in the investigation or defense of the Claim; andAssist us orour Authorized Representatives, as shown in the Declarations, in theenforcement of any right against any person or organization which may be liableto the insured because of Loss to which this policy may also apply. .

3. No insureds will, except at their own cost, voluntarily make a payment. assume anyobligation, or incur any expense without our consent. Subsequent payments which aredeemed by us as having been prejudiced by any such volu[ltary payment will also be thesoie responsibility of the insured.

B. Notice of a Potential Claim

C.

Solely at the insured's option, the insured may within the Policy Period give us notice of a faG!,situation or circl1mstance which may result in a Claim, by providing to us the information requiredin accordance with Condition A. 1. a, through f. If such notice is given within the Policy Periodthen any Claim subsequently arising from such notice will be deemed to be made on the datesuch notice was given. Such notice must include the Identity of the person(s) who may make aClaim.Legal Action Against UsNo person or organization has the right under this policy:1. To join us as a party or otherwise bring us into a suit asking for damages from aninsured; or2. To sue us on this policy unless all of its terms havebeen fully complied with.A person or organization may sue us to recover on an agreed settlement or on final judgmentagainst an insured obtained after an actual trial, but we will not be liable for damages that are notpayable under the terms of this policy or that are in excess of the .applicable COVERAGELIMITS. An agreed settlement means a settiement and release of liability signed by us, theinsured and the claimant's legal representative.

0, Other InsuranceIf other valid and collectible insurance is available to the insured covering a Loss also covered bythis policy, other than insurance that is specifically stated to be in excess of this policy, theinsurance afforded by this policy shall be in excess of and shall not contribute with such otherinsurance. Nothing herein shall be construed to make this policy subject to the terms, conditionsand limitations of any other insurance.E. Premium1. The Premium shown. in the Declarations is for the Policy Period shown in theDeclarations.2. The Policy is subject to a minimum earned premium of twenty five percent (25%) of thetotal Premium shown in the Declarations.

F. CancellationYou may cancel this policy by mailing to us written notice stating When, following the date of suchnotice, such cancellation shall be effective. We may cancel this policy for non-payment ofpremium by mailing to the Named Insured, at the address shown in the Decl;orations, written

f':nn\lril1ht Ac:F l ISA ?nn? D ! l r 1 ~ f\ nf 1 ()


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G.

notice stating when not less than ten (10) days thereafter such cancellation shall be effective.The mailing of notice shall be sufficient proof of notice. The effective date and hour ofcancellation as stated in the notice shall become the end of the Policy Period. Delivery of suchwritten notice shall be equivalent to mailing.If we cancel, earned premium shall be computed pro rata. If you cancel, earned premium may becomputed on an other than pro rata basis. Premium adjustment may be made at the timecancellation becomes effective, but the timing of payment or tender of unearned premium will notaffect the cancellation.Representations1. The insureds represent and acknowledge that the statements contained in theApplication and any materials submitted or required to be submitted therewith (all ofwhich shall be maintained on file by us and be deemed attached to and incorporated intothis Policy as if physically attached), are true and:

a. Are the basis of this Policy and are to be considered as incorporated into andconstituting .a part of this Policy; andb. Shall be deemed material to the acceptance of this risk or th,e hazard assumed

by us under this Policy. This Policy is issued in reliance upon the truth of suchrepresentations.2. In the event the Application, including materials submitted or required to be submitted, therewith, contains any misrepresentation or omission:

a. Made with the intent to deceive, orb. Which materially affects either the acceptance of the risk or the hazard assumedby the Insurer under this Policy;Th,is Policy shall be void ab initio as to:i. Any corporation or organization if any Management or Supervising Employee ofsuch entity knew the facts that were not truthfully disclosed in the Applications;andii. Any insured who knew the facts that were not truthfully disclosed in theApplication, whether or not such Management or Supervising Employee or

Insured knew the Application contained such misrepresentation or omission.H. When We Do Not RenewIf we decide not to renew this policy, we will mail or deliver written notice OT nonrenewal to thefirst Named Insured shown in the Declarations not less than thirty (30) days before the expirationdate.If notice is mailed, proof of mailing will be sufficient notice of non-renewal.

I. Transfer Of Rights Of Recovery Against Otners to UsIf the insured has rights to recover all or part of any payments we have made under this policy,those rights are transferred to us; the insured must do nothing after a Loss to impair them. At ourrequest, the insured will bring suit or transfer those rights to us and help us enforce them.

J. BankruptcyBankruptcy or, insolvency of the insured or of the insured's estate will not relieve us of ourobligations under this policy.K. False Or Fraudulent Claims

If any insured shall proffer any Claim knowing the same to be false or fraudulent as regardsamount or otherwise, coverage under this policy for said Claim shall be forfeited.L Change in Ownership

If you are acquired by any other person or entity, this policy shall continue in force but coverageis limited to Insured Events that took place prior to the effective date of such acquisition.


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XI. DEFINITIONSA. Claim(s) means:

1. A written demand for monetary damages;2. A civil proceeding commenced by the service of a complaint or similar pleading;3. An arbitration proceeding to which the insured must submit or to which an insuredsubmits with our consent;4. A formaJadministrative or regulatory adjudicatory or investigative proceedingcommenced by the filing of a notice of charge, formal investigative order or similar, document; or5. A form;::! I civil, criminal, administrative or regulatory investigation commenced by theservice upon or other receipt by the insured of a written notice or subpoen;::! from theinvestigating authority identifying the insured as a person against whom a formalproceeding m;::!y be commenced;;::!g;::!inst ;::!ny insured, including any appeal therefrom; however, a Claim shall not include;::! I;::!boror grievance proceeding which is pursu;::!nl to a collective bargain ing agreement. ' .We have the option but not th e duty to defend criminal proceedings at your request. Thsexercise of our option to defend shall not render us n;::!ble for ;::!ny other Loss. We sh;::!11 retain theright to withdraw from any optional defense fo r ;::!ny reason by giving you thirty days advancenoth,e of our withdrawal.

B. Defense Costs mean those 'reasonable and necessary expenses that result from theinvestigation, settlement or defense of a specific Claim including attomey fees and expenses, the,cost of legal proceedings, the cost of appeal bonds, the cost of bonds to release property beingused to secure a legal obligation (but only fo r bond amounts within COVERAGE LIMITS thatapply). We have no obligation to furnish any bonds.We do not consider the following to be Defense Costs:Salaries and expenses of .our employees, including in-house andlor coverage attorneys, salariesand expenses of the .insured's Employees or the fees and expenses of independent adjusters wehire,Defense Costs shall not include amounts incurred prior to giving notice to us or our AuthorizedRepresentatives, as shown inthe Declarations.

C. Employment-related Discrimination means termination of the employment relationship, ademotion, a failure or refusal to hire or promote, denial of an employment benefit or the taking ofany adverse or differential employment action because of race, color, religion, age, sex, disability,pregnancy, sexual orientation, national origin, or any other basis prohibited by federal, state orlocal law, including but not limited to the Family Medical Leave Act, Age Discrimination inEmployment Act, Americans with Disabilities Act, the Fair Labor Standards Act and theUniformed Services Employment and Reemployment Rights Act.D. Employment-related, Harassment means unwelcome sexual advances, requests for sexualfavors, or other verbal or physical conduct of a sexual or a non-sexual nature that:

1. Explicitly or implicitly are made a condition of employment;2. Are used as basis for employment decisions; or'3. Create a work environment that interferes with performance, or creates an intimidating,hostile or offensive working environment.

E. Emp loyee means an individual whose labor or service is engaged by and directed by you or anycovered, organization. This includes, but is not limited to; volunteers, part time, seasonal andtemporary Employees as well as any indiVidual employed in a supelVisory, managerial orconfidential position. Independent contractors and sub contractors are not Employees unlessthey are your dedicated agents or representatives. Employees who are leased to anotheremployer are not Employees.

PF-11519 (0212002) Copyright ACE USA. 2002 Page 8 of 10


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F. First Party Insured Event means actual or alleged acts of Employment-related Discrimination,Employment-related Harassment, or Inappropriate Employment Conduct by an insured againstan Employee, former Employee or applicant for employment with an insured entity.

G. Inappropriate Employment Conduct means arlY actual or alleged:1. Wrongful dismissal or discharge or termination of employment, whether actual orconstructive;2. Wrongful demotion, wrongful discipline or retaliatory discharge;3. Employment-related misrepresentation to, humiliation of, or retaliation against anEmployee, a former Employee or an .applicant for employment;4. Employment"related wrongful infliction of emotional distress or mental anguish upon anEmployee, a former Employee or an applicant for employment;5. False imprisonment, false arrest, detention or malicious prosecution of an Employee, aformer Employee or an applicant for employment; or6. Employment-related libel. slander, defamation of character or any invasion of right ofprivacy of an Employee, a former Employee or an applicant for employment.Inappropriate Employment Conduct shall not include any act or failure to act except as set forthabove.

H. Insured Event includes a First Party Insured Event and, if coverage is provided by this policy asindicated by attachment of the Third Party Coverage Endorsement, a Third Party Insured Event.On e or more actual or alleged acts which are:1. Related by an unbroken chain of events; or2. The subject of class action.ormuliiple plaintiff suits arising oulof related Insured Events;or3. The subject of related Claims brought by the same personwill be considered one Insured Event.All Claims arising out of one Insured Event will be deemed to have been first made or brought onthe date that the first of those Claims was made or brought.

I. Loss1. Loss means the amount the insureds become legally obligated to pay on account of each

Claim and for all Claims in the policy period and the Limited or Extended ReportingPeriods, if exercised, made against them for Employment-related . Discrimination,Employment-related Harassment, and Inappropriate Employment Conduct fo r whichcoverage applies, including, but not limited to, damages, back pay and front pay.jUdgments, any award of pre-judgment and po.st-judgment interest, settlements andDefense Costs.

2. Loss does not include:a. Taxes, civil or criminal fines or penalties imposed by law;b. An y amount for Which the insureds are absolved from payment;c. The multiple portion of any mUltiplied damage award;d. Non-monetary relief (this provision does not apply to Defense Costs);e. Uquidated damageswhere there is a finding ofwillfulness;f. Payment of insurance plan'benefits by or on behalf of retired Employees or that

to which a claimant would have been entitled as an Employee had the insuredprovided the claimant with a continuation of insurance;g. Costs incurred by an insured to modify or adapt any building or property in orderto make such building or property more accessible or accommodating to anydisabled person;


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-h.

Lj.

k.

Matters which may be deemed uninsurable according to the law under which thispolicy is construed;Amounts owed under federal, state, or local wage and hour laws;Commissions, bonuses, profit sharing or benefits pursuant to a contract ofemployment; orDamages arising from any written or express contract of employment orobligation to make payments, including but not limited to severance payments inthe event of the termination of employment.

3. For the purposes of determining the insurability of punitive or exemplary damages under "this Policy, we and the insureds agree that the law of the jurisdiction most favorable teithe insurability of punitive damages shall'control, provided such jurisdiction:a. Is where such punitive damages were awarded or imposed; orb_ Is where the Insured Event fo r which such punitive damages were awarded orimposed took place; orc_ Is where, any insured that is a corporation, limited liability company, partnership

or other organization or association, is incorporated or has its principal place ofbusiness.J. Mallagement or Supervising Employee means any owner, m ~ m a g i n g partner, chief financialofficer, chief executive officer, chief operating officer, executive director, human resourcemanager, in-house counsel, risk manager or any employee who has the authority to employ orterminate employment of. other employees 9r any person performing the hUman resourcemanagement function.K. Pollutant 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.


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I

SERVICE OF SUIT ENDORSEMENTNamed InsuredOavid A Gauntfett; dba G a ~ n t l e t t & AssociatesPolicy Symbol . Iponcy NumberEPL NO 12 62 65 8Issued by (Name of Insurance Company)ILLINOIS Ut-iION INSURANCE CO

IPolicy Period7/10/2006 to

Endorsement Number

Effective Date of Endorsement7/10/2007 07110/06

THIS ENDORSEMENT CHANGES THE POLICY, PLEASE READ IT CAREFULLY,Information about service of "suits" upon us is given below. Service of process of "suits" against us may bemadeupon the following person, or another person we may designate:

Saverio Rocca, Assistant GeneralCounselACE USA CompaniesTwo Liberty Place - TL35M1601 Chestnut StreetPhiladelphia, PA 19103

The person named above is authorized and directed to accept service of process on our behalf in any action,"suif' or proceeding instituted against us. If you request, we will give you a written promise that a generalappearance will.be entered on our behalf if a "suit" is broughtIf you request, we will submit to the jurisdiction of any court of competent jurisdiction. We will accept the finaldecision of that court or any Appellate Court in the event of an appeal.The law of some jurisdictions of the United States of America require that the SUperintendent, Commissioneror Director of Insurance (or their successor in office) be designated as our agent for service of process. In thesejurisdictions, we designate the Director of Insurance as our true and lawful attorney upon whom service ofprocess on our behalf may be made. We also authorize the Director of Insurance to mail process received onbehalf to the company person named above.If you are a resident of Canada, you may also serve "suit" upon us by serving the government official designatedby the law of your province,

NOTHING HEREIN CONTAINED SHALLBE HELDTO VARY, ALTER, WAIVE OR EXTEND ANY OF THETERMS, CONDITIONS, OR LIMITATIONS OF THE POLICY TO WHICH THIS ENDORSEMENT ISOTHER THAN AS ABOVE STATED.

Authorized Agent.

XS-1US6d (0312002) (Readable)


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THIRD PARTY COVERAGE ENDORSEMENTEndorsement Number

& AssociatesSymbol I PoliCY Number . I Policy Period

NO 12 62 65 8 7/10/2006 To 7/1012007Effective Date. of Endorsement

7/10/2006. ~ d By (Name of Insurance Company)UNION INSURANCE CO

..

THIS ENDORSEMENT CHANGES YOUR POL.ICY. PLEASE READ IT CAREFULLY.This endorsement modifies insurance provided under the following:EMPLOYMENT PRACTICES INSURANCE - CLAIMS FIRST MADE AND REPORTED

of the premium charged, it is hereby understood and agreed that this policy is amended to includefo r Claims alleging Third Party Discriminatipn and Third Party Harassment in accordance with the terms,set forth in this endorsement and in the policy.SCHEDULE

$ 1000000 Each Third Party Insured Event LimitUnder Section WHO is iNSURED D. Employees is deleted in its entirety and replaced by:

Employees. Your Employees, executive officers, directors and your trustees are insureds only for theconduct of your business within the scope of their employment. Your Employee's status as an insured willbe determined as of the date of the alleged Employment-related Discrimination, Employment-relatedHarassment or Inappropriate Employment Conduct or the Third Party Discrimination or Third PartyHarassment that caused the Insured Event.The provisions of Section VI; COVERAGE LIMITS are deleted in their entirety and replaced by:A. The limits shown in the Declarations of this policy and in the Schedule of this endorsement and the

information contained in this COVERAGE LIMITS section establish the most we will pay regardless ofthenumber of insureds or Claims made.B. Each First Party Insured Event Limit. The Each First Party Insured EVent Limit shown in theDeclarations is the most we will paylor Claims first made or brought during the Policy Period fo r Loss thatresults from anyone First Party Insured Event regardless of the number of Claims. .C. Each Third Party Insured Event Limit. The Each Third Party Insured Event Limit shown in theSchedule of this endorsement is the most we will pay for Claims first made or brought during the PolicyPeriod for Loss that results from anyone Third Party Insured Event regardless of the number of Claims.D. Total Aggregate Limit. The Total Aggregate Limit shown in the Declarations is the most we will pay fo rthe combined total of all Claims first made or brought during the Policy Period for Loss that results from allInsured Events.E. Punitive Damage Limit. The Punitive Damage Limit shown in the Declarations is the most we will payfor any Claim for punitive or exemplary damages. The Punitive Damage l imit is part of and not Inaddition to the Each First Party Insured Event Limit, Each Third Party Insured Event Limit and the TotalAggregate Limit.F. How the COVERAGE LIMITS apply to an extension of the Policy Period. If this Policy Period isextended, the Limits as shown in the Declarations and the Schedule of this endorsement shall notincrease. For purposes of the COVERAGE LIMITS any policy extension is considered to be part of andnot in addition to the former Policy Period..Section XI. DEFINITIONS is modified as follows:A. Claims(s) is deleted ini ls entirety and replaced by:

CODvriaht ACE USA. 2002 PaQs 1 _.....


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A.Cla im(s ) means:1. A written demand for monetary damages;2. A civil proceeding commenced by the service of a complaint or similar pleading;3. An arbitration proceeding to which the insured must submit or to which an insured submits withour consent; .4. A formal administrative or regulatory adjudicatory or investigative proceeding commenced by

the filing of a notice of charge, formal investigative order or similar document; or5. A formal civil, criminal, administrative or regulatory investigation commenced by the serviceupon or other receipt by the insured of a written notice or subpoena from the investigatingauthority identifying the insured as a person against whom a formal proceeding may becommenced;against any insured, including any appeal therefrom; however, a Claim shall not include:

. a. A labor or grievance proceeding which is pursuantto a collective bargaining agreement; orb. Class action or multiple plaintiff suits arising out of any Third Party Insured Event.We have the option but not the duty to defend criminal proceedings at your request. The exercise oour option to defend shall no t render us liable for any other Loss. We shall retain the right towithdraw from any optional defense for any reason by giving you thirty days advance notice of ourwithdrawal.

B. Paragraph 1. under paragraph I. Loss is deleted in its entirety and replaced by:Loss means:a.. The amount the insureds become legally obligated to pay on account of each Claim and for allClaims in the Policy Period and the Limited or Extended Reporting Periods, if exercised, madeagainst them for Employment-related Discrimination, Employment7related Hara.ssment orInappropriate Employment Conduct for which coverage applies, including, but not limited to,damages, back pay and front pay, judgments, any award of pre-judgment and post-judgmentinterest, settlements and Defense Costs; andb. The amount the insureds become legally obligated to pay on account of each Claim and for allClaims in the Policy Period and the Limited or Extended Reporting Periods, if exercised, made

against them for Third Party Discrimination or Third Party Harassment for which coverage applies,including, but not limited to, damages, judgments, any award of pre-judgment and post-judgmentinterest, settlements and Defense Costs. .C. The following definitions are added for purposes of this endorsement:

Third Party Discrimination means any practice that denies privileges to a person who is not anEmployee because of race, age, sex, nationality. religion or handicap in Violation of Federal or state law.Third Party Harassment means unwelcome sexual advances, requests for sexual favors or other verbalor physical conduct of a sexual or a non-sexual nature that, directed at a specific person who is not anEmployee, alarms or causes substantial emotional distress in that person and serves no legitimatepurpose.Third Party Insured Event means actual or alleged acts of Third Party Discrimination or Third PartyHarassment by an insured against a person who is not an Employee provided such act arises out of thecourse of an insured entity's business. However, Third Party Insured Event does not include:1. Claims for assault or battery; or2. . Claims that involve any acts which happened pr ior to the inception date of this policy.

other terms and conditions of the poliCY remain unchanged.

Authorized Agent


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(THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.

....med Insured Endbrsement Numberavid A. Gaunllett; dba Gauntlett & Associates

Policy Symbol IPolicy Number I ~ O I i C Y Period Effective Date of EndorsementEPL N01262658 07/10/06 TO 07/10/07 07/10/06Issued by. (Name of I n s u r a n ~ Company)ILLINOIS UNION INSURANCE CO

Exclusion of TerrorismThis endorsement modifies insurance provided under the following:

Employment Practices Insurance Coverage

It is agreed that:A. Section IX, Definitions, of the policy is amended by adding the following and apply under this endorsementwherever the term Terrorism, is bold:

"Terrorism" means activities against persons, organizations or property of any nature:1. That involve the following or preparation fo r the following:

a. Use or threat of force or violence; orb. Commission or threat of a dangerous act; orc. Commission or threat of an act that interferes with or disrupts an electronic, communication,information, or mechanical system; and

2. When one or both of the following applies:a. The effect is to intimidate or coerce a government or the Civilian population or any segment thereof,or to disrupt any segment of the economy; orb. It appears that the intent is to intimidate or coerce a government, or to further political, ideological,

religious, social or economic objective or to express (or express opposition to) a philosophy orideology.B. Section II, Exclusions: What is Not Covered, of the policy isarnended by adding the following:Terrorism. This policy does not cover any Loss arising out of, based upon, related to, attributable to, directly orindirectly in connection with, or alleging, directly or indirectly, Terrorism, including action in hindering ordefending against an actual or expected incident of Terrorism. Loss and Defense Costs are excludedregardless of any other cause or event that contributes concurrently or in any sequence to such Loss.All other terms and conditions of this "Policy" remain unchanged.

Authorized Agent

ACE USA, 2004Reprinted, in part, with permission of ISO Properties, Inc.

Page 1 of 11 7VU .


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lIIinoisUnion..

Insurance CompanyDavld A. Gauntlett; dba Gauntlett & AssociatesI

---- ace usa PolicyholderN01262658Policy Number

ECM Insurance Services, Inc.Broker/ProducerPOLICYHOLDER DISCLOSURENOTICE OF TERRORISM INSURANCE COVERAGE

You have been notified that under the Terrorism Risk Insurance Act of 2002, effective November 26,2002,you were given the right to purchase insurance coverage fo r losses arising out of the acts of terrorism, asdefined in Section 102(1) of the Act: The term "act of terrorism" means any act that is certified by theSecretary of the Treasury. in concurrence with the Secretary of State, and the Attorney General of theUnited States - to be an act of terrorism; to be a violent act or an act that is dangerous to human life,property or infrastructure; to have resulted in damage within the United States, or outside the United Statesin the case of an air carrier or vessel or the premises of a United states mission; and to have beencommitted by an individual or individuals acting on behalf of any foreign person or foreign interest, as partof an effort to coerce the civilian population of the United States or to influence the policy or affect theconduct of the United States Government by coercion .

. RESPONSIBILITY FOR COMPENSATION UNDER THE ACT IS SHARED BETWEEN INSURANCE COMPANIES( JVERED BY THE ACT AND THE UNITED STATES. ANY COVERAGE PURCHASED FOR LOSSES CAUSED'y ACTS OF TERRORISM DEFINED IN THE ACT IS PARTIALLY REIMBURSED BY THE UNITED STATES. NDER A FORMULA ESTABLISHED BY FEDERAL LAW. UNDER THE FORMULA, THE UNITED STATES PAYS90% OF COVERED TERRORISM LOSSES EXCEEDING THE STATUTORILY ESTABLISHED DEDUCTIBLE PAIDBY THE INSURANCE COMPANY PROVIDING THE COVERAGE. THE PREMIUM FOR THE TERRORISMCOVERAGE DEFINED IN THE ACT SET FORTH BELOW DOES NOT INCLUDE ANY CHARGES FOR THEPORTION OF LOSS COVERED BY THE FEDERAL GOVERNMENT UNDER THE ACT.

You elected NOT to purchase terrorism coverage under the Act at the price indicated. ACCORDINGLY, WEWILL NOT PROVIDE THIS COVERAGE AND YOU DO NOT OWE THE ADDITIONAL PREMIUM FOR THATCOVERAGE INDICATED BELOW.

Terrorism coverage described by the Act under your policy was made available toyou for additional premium in the amount of $ 132.00 ,however you elected to declinesuch coverage.

:-.Jotice Form 5

TRIM5 (01/03)CVU


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NO 12 62 65 8 IL P 00101 04

U.S. Treasury Department's Office of ForeignAssets Control ("OFAC")Advisory Notice To The PolicyHolderNo coverage is provided by this Policyholder Notice nor can it be construed to replace any provisions of yourpolicy, You should read your policy and review your Declarations page for complete infonnalion on thecoverages you are provided,This Notice provides informat ion conceming possible impact on your insurance coverage due to directives issuedby OFAC. Please read .this Notice carefully.The Office of Foreign Assets Control (OFAC) administers and enforces sanctions policy, based on PreSidentialdeclarations of "national emergency". OFAC has identified and listed numerous:

-- Foreign agents;-- Front organizations;- Terrorists;- Terrorists organizations; and-- Narcotics Traffickers

as "Specially Designated Nationals and Blocked Persons". This list can be located on the United States Treasury'sweb site - http/lwww.treas.gov/ofac.In accordance with OFAC regulations, if it is determined that your any other insured, or any person or entityclaiming the benefits of this insurance has violated U.S. sanctions law or is a Specially Designated National andBlocked Person, as identified by OFAC, this insurance will be considered a blocked or frozen contract and allprovisions of this insurance are immediately subject to OFAC, When an insurance policy. is conSidered to bea blocked or frozen contract, no payments nor premium refunds may be made without authorization from OFAC.

. Other limitations on the premiums and payments also apply.

IL P 0010104 ISO Properties, Inc., 2004 Page 1 of 1

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