Condominium Commercial Unit-Owners Coverage Form

COMMERCIAL PROPERTY CP 00 18 10 12

CONDOMINIUM COMMERCIAL UNIT-OWNERS COVERAGE FORM

Various provisions in this policy restrict coverage. Read the entire policy carefully to determine rights, duties and what is and is not covered. Throughout this policy, the words "you" and "your" refer to the Named Insured shown in the Declarations. The words "we", "us" and "our" refer to the company providing this insurance. Other words and phrases that appear in quotation marks have special meaning. Refer to Section H. Definitions.

A. Coverage b. Personal Property Of Others that is: We will pay for direct physical loss of or damage to (1) In your care, custody or control; and Covered Property at the premises described in the (2) Located in or on the building or structure Declarations caused by or resulting from any described in the Declarations or in the Covered Cause of Loss. open (or in a vehicle) within 100 feet of 1. Covered Property the building or structure or within 100 Covered Property, as used in this Coverage feet of the premises described in the Part, means the type of property described in Declarations, whichever distance is this section, A.1., and limited in A.2. Property greater. Not Covered, if a Limit Of Insurance is shown However, our payment for loss of or in the Declarations for that type of property. damage to personal property of others will a. Your Business Personal Property only be for the account of the owner of the consists of the following property located in property. or on the building or structure described in 2. Property Not Covered the Declarations or in the open (or in a Covered Property does not include: vehicle) within 100 feet of the building or structure or within 100 feet of the premises a. Accounts, bills, currency, food stamps or described in the Declarations, whichever other evidences of debt, money, notes or distance is greater: securities. Lottery tickets held for sale are not securities; (1) Furniture; b. Animals, unless owned by others and (2) Fixtures, improvements and alterations boarded by you, or if owned by you, only as making up part of the building and "stock" while inside of buildings; owned by you; c. Automobiles held for sale; (3) Machinery and equipment; d. Contraband, or property in the course of (4) "Stock"; illegal transportation or trade; (5) All other personal property owned by e. Water, growing crops or lawns; you and used in your business; f. Personal property while airborne or (6) Labor, materials or services furnished or waterborne; arranged by you on personal property of others; g. Property that is covered under another Coverage Form of this or any other policy in (7) Leased personal property for which you which it is more specifically described, have a contractual responsibility to except for the excess of the amount due insure, unless otherwise provided for (whether you can collect on it or not) from under Personal Property Of Others. that other insurance;

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h. Electronic data, except as provided under k. The following property while outside of the Additional Coverage, Electronic Data. buildings: Electronic data means information, facts or (1) Grain, hay, straw or other crops; or computer programs stored as or on, created or used on, or transmitted to or (2) Fences, radio or television antennas from computer software (including systems (including satellite dishes) and their and applications software), on hard or lead-in wiring, masts or towers, trees, floppy disks, CD-ROMs, tapes, drives, cells, shrubs or plants (other than "stock" of data processing devices or any other trees, shrubs or plants), all except as repositories of computer software which are provided in the Coverage Extensions; used with electronically controlled l. Any of the following types of property equipment. The term computer programs, contained within a unit, regardless of referred to in the foregoing description of ownership, if your Condominium electronic data, means a set of related Association Agreement requires the electronic instructions which direct the Association to insure it: operations and functions of a computer or (1) Fixtures, improvements and alterations device connected to it, which enable the that are a part of the building; and computer or device to receive, process, store, retrieve or send data. This (2) Appliances, such as those used for paragraph, h., does not apply to your refrigerating, ventilating, cooking, "stock" of prepackaged software, or to dishwashing, laundering, security or electronic data which is integrated in and housekeeping. operates or controls the building's elevator, 3. Covered Causes Of Loss lighting, heating, ventilation, air conditioning or security system; See applicable Causes Of Loss form as shown in the Declarations. i. The cost to replace or restore the information on valuable papers and 4. Additional Coverages records, including those which exist as a. Debris Removal electronic data. Valuable papers and (1) Subject to Paragraphs (2), (3) and (4), records include but are not limited to we will pay your expense to remove proprietary information, books of account, debris of Covered Property and other deeds, manuscripts, abstracts, drawings debris that is on the described premises, and card index systems. Refer to the when such debris is caused by or Coverage Extension for Valuable Papers results from a Covered Cause of Loss And Records (Other Than Electronic Data) that occurs during the policy period. The for limited coverage for valuable papers and expenses will be paid only if they are records other than those which exist as reported to us in writing within 180 days electronic data; of the date of direct physical loss or j. Vehicles or self-propelled machines damage. (including aircraft or watercraft) that: (2) Debris Removal does not apply to costs (1) Are licensed for use on public roads; or to: (2) Are operated principally away from the (a) Remove debris of property of yours described premises. that is not insured under this policy, This paragraph does not apply to: or property in your possession that is not Covered Property; (a) Vehicles or self-propelled machines or autos you manufacture, process (b) Remove any property that is or warehouse; Property Not Covered, including property addressed under the (b) Vehicles or self-propelled machines, Outdoor Property Coverage other than autos, you hold for sale; Extension; (c) Rowboats or canoes out of water at the described premises; or (d) Trailers, but only to the extent provided for in the Coverage Extension for Non-owned Detached Trailers;

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(c) Remove property of others of a type Therefore, if (4)(a) and/or (4)(b) applies, that would not be Covered Property our total payment for direct physical loss under this Coverage Form; or damage and debris removal expense (d) Remove deposits of mud or earth may reach but will never exceed the from the grounds of the described Limit of Insurance on the Covered premises; Property that has sustained loss or damage, plus $25,000. (e) Extract "pollutants" from land or water; or (5) Examples (f) Remove, restore or replace polluted The following examples assume that land or water. there is no Coinsurance penalty. (3) Subject to the exceptions in Paragraph Example 1 (4), the following provisions apply: Limit of Insurance: $ 90,000 (a) The most we will pay for the total of Amount of Deductible: $ 500 direct physical loss or damage plus debris removal expense is the Limit Amount of Loss: $ 50,000 of Insurance applicable to the Amount of Loss Payable: $ 49,500 Covered Property that has sustained ($50,000 – $500) loss or damage. Debris Removal Expense: $ 10,000 (b) Subject to (a) above, the amount we Debris Removal Expense Payable: $ 10,000 will pay for debris removal expense is limited to 25% of the sum of the ($10,000 is 20% of $50,000.) deductible plus the amount that we The debris removal expense is less than 25% of the pay for direct physical loss or sum of the loss payable plus the deductible. The sum damage to the Covered Property that of the loss payable and the debris removal expense has sustained loss or damage. ($49,500 + $10,000 = $59,500) is less than the Limit However, if no Covered Property has of Insurance. Therefore the full amount of debris sustained direct physical loss or removal expense is payable in accordance with the damage, the most we will pay for terms of Paragraph (3). removal of debris of other property (if such removal is covered under this Example 2 Additional Coverage) is $5,000 at Limit of Insurance: $ 90,000 each location. Amount of Deductible: $ 500 (4) We will pay up to an additional $25,000 Amount of Loss: $ 80,000 for debris removal expense, for each location, in any one occurrence of Amount of Loss Payable: $ 79,500 physical loss or damage to Covered ($80,000 – $500) Property, if one or both of the following Debris Removal Expense: $ 40,000 circumstances apply: Debris Removal Expense Payable: (a) The total of the actual debris removal Basic Amount: $ 10,500 expense plus the amount we pay for direct physical loss or damage Additional Amount: $ 25,000 exceeds the Limit of Insurance on The basic amount payable for debris removal the Covered Property that has expense under the terms of Paragraph (3) is sustained loss or damage. calculated as follows: $80,000 ($79,500 + $500) x .25 (b) The actual debris removal expense = $20,000; capped at $10,500. The cap applies exceeds 25% of the sum of the because the sum of the loss payable ($79,500) and deductible plus the amount that we the basic amount payable for debris removal expense pay for direct physical loss or ($10,500) cannot exceed the Limit of Insurance damage to the Covered Property that ($90,000). has sustained loss or damage.

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The additional amount payable for debris removal This Additional Coverage does not apply to expense is provided in accordance with the terms of costs to test for, monitor or assess the Paragraph (4), because the debris removal expense existence, concentration or effects of ($40,000) exceeds 25% of the loss payable plus the "pollutants". But we will pay for testing deductible ($40,000 is 50% of $80,000), and because which is performed in the course of the sum of the loss payable and debris removal extracting the "pollutants" from the land or expense ($79,500 + $40,000 = $119,500) would water. exceed the Limit of Insurance ($90,000). The The most we will pay under this Additional additional amount of covered debris removal expense Coverage for each described premises is is $25,000, the maximum payable under Paragraph $10,000 for the sum of all covered (4). Thus, the total payable for debris removal expenses arising out of Covered Causes of expense in this example is $35,500; $4,500 of the Loss occurring during each separate 12- debris removal expense is not covered. month period of this policy. b. Preservation Of Property e. Electronic Data If it is necessary to move Covered Property (1) Under this Additional Coverage, from the described premises to preserve it electronic data has the meaning from loss or damage by a Covered Cause described under Property Not Covered, of Loss, we will pay for any direct physical Electronic Data. This Additional loss or damage to that property: Coverage does not apply to your "stock" (1) While it is being moved or while of prepackaged software, or to temporarily stored at another location; electronic data which is integrated in and and operates or controls the building's elevator, lighting, heating, ventilation, air (2) Only if the loss or damage occurs within conditioning or security system. 30 days after the property is first moved. (2) Subject to the provisions of this c. Fire Department Service Charge Additional Coverage, we will pay for the When the fire department is called to save cost to replace or restore electronic data or protect Covered Property from a which has been destroyed or corrupted Covered Cause of Loss, we will pay up to by a Covered Cause of Loss. To the $1,000 for service at each premises extent that electronic data is not described in the Declarations, unless a replaced or restored, the loss will be higher limit is shown in the Declarations. valued at the cost of replacement of the Such limit is the most we will pay media on which the electronic data was regardless of the number of responding fire stored, with blank media of substantially departments or fire units, and regardless of identical type. the number or type of services performed. (3) The Covered Causes of Loss applicable This Additional Coverage applies to your to Your Business Personal Property liability for fire department service charges: apply to this Additional Coverage, (1) Assumed by contract or agreement prior Electronic Data, subject to the following: to loss; or (a) If the Causes Of Loss – Special (2) Required by local ordinance. Form applies, coverage under this Additional Coverage, Electronic No Deductible applies to this Additional Data, is limited to the "specified Coverage. causes of loss" as defined in that d. Pollutant Clean-up And Removal form and Collapse as set forth in that We will pay your expense to extract form. "pollutants" from land or water at the (b) If the Causes Of Loss – Broad Form described premises if the discharge, applies, coverage under this dispersal, seepage, migration, release or Additional Coverage, Electronic escape of the "pollutants" is caused by or Data, includes Collapse as set forth results from a Covered Cause of Loss that in that form. occurs during the policy period. The expenses will be paid only if they are reported to us in writing within 180 days of the date on which the Covered Cause of Loss occurs.

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(c) If the Causes Of Loss form is If a Coinsurance percentage of 80% or more, endorsed to add a Covered Cause of or a Value Reporting period symbol, is shown Loss, the additional Covered Cause in the Declarations, you may extend the of Loss does not apply to the insurance provided by this Coverage Part as coverage provided under this follows: Additional Coverage, Electronic a. Newly Acquired Property Data. (1) You may extend the insurance that (d) The Covered Causes of Loss include applies to Your Business Personal a virus, harmful code or similar Property to apply to: instruction introduced into or enacted on a computer system (including (a) Business personal property, electronic data) or a network to including such property that you which it is connected, designed to newly acquire, at any location you damage or destroy any part of the acquire other than at fairs, trade system or disrupt its normal shows or exhibitions; or operation. But there is no coverage (b) Business personal property, for loss or damage caused by or including such property that you resulting from manipulation of a newly acquire, located at your newly computer system (including constructed or acquired buildings at electronic data) by any employee, the location described in the including a temporary or leased Declarations. employee, or by an entity retained by The most we will pay for loss or damage you or for you to inspect, design, under this Extension is $100,000 at each install, modify, maintain, repair or building. replace that system. (2) This Extension does not apply to: (4) The most we will pay under this Additional Coverage, Electronic Data, is (a) Personal property of others that is $2,500 (unless a higher limit is shown in temporarily in your possession in the the Declarations) for all loss or damage course of installing or performing sustained in any one policy year, work on such property; or regardless of the number of occurrences (b) Personal property of others that is of loss or damage or the number of temporarily in your possession in the premises, locations or computer course of your manufacturing or systems involved. If loss payment on the wholesaling activities. first occurrence does not exhaust this amount, then the balance is available for (3) Insurance under this Coverage subsequent loss or damage sustained in Extension for Newly Acquired Property but not after that policy year. With will end when any of the following first respect to an occurrence which begins occurs: in one policy year and continues or (a) This policy expires; results in additional loss or damage in a (b) 30 days expire after you acquire the subsequent policy year(s), all loss or property; or damage is deemed to be sustained in the policy year in which the occurrence (c) You report values to us. began. We will charge you additional premium 5. Coverage Extensions for values reported from the date you acquire the property. Except as otherwise provided, the following Extensions apply to property located in or on the building described in the Declarations or in the open (or in a vehicle) within 100 feet of the described premises.

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b. Personal Effects And Property Of Others d. Property Off-premises You may extend the insurance that applies (1) You may extend the insurance that to Your Business Personal Property to applies to Your Business Personal apply to: Property to apply to your business (1) Personal effects owned by you, your personal property while it is away from officers, your partners or members, your the described premises, if it is: managers or your employees. This (a) Temporarily at a location you do not Extension does not apply to loss or own, lease or operate; damage by theft. (b) In storage at a location you lease, (2) Personal property of others in your care, provided the lease was executed custody or control. after the beginning of the current The most we will pay for loss or damage policy term; or under this Extension is $2,500 at each (c) At any fair, trade show or exhibition. described premises. Our payment for loss (2) This Extension does not apply to of or damage to personal property of others property: will only be for the account of the owner of the property. (a) In or on a vehicle; or c. Valuable Papers And Records (Other (b) In the care, custody or control of Than Electronic Data) your salespersons, unless the property is in such care, custody or (1) You may extend the insurance that control at a fair, trade show or applies to Your Business Personal exhibition. Property to apply to the cost to replace or restore the lost information on (3) The most we will pay for loss or damage valuable papers and records for which under this Extension is $10,000. duplicates do not exist. But this e. Outdoor Property Extension does not apply to valuable You may extend the insurance that applies papers and records which exist as to Your Business Personal Property to electronic data. Electronic data has the apply to your outdoor fences, radio and meaning described under Property Not television antennas (including satellite Covered, Electronic Data. dishes), trees, shrubs and plants (other (2) If the Causes Of Loss – Special Form than "stock" of trees, shrubs or plants), applies, coverage under this Extension including debris removal expense, caused is limited to the "specified causes of by or resulting from any of the following loss" as defined in that form and causes of loss if they are Covered Causes Collapse as set forth in that form. of Loss: (3) If the Causes Of Loss – Broad Form (1) Fire; applies, coverage under this Extension (2) Lightning; includes Collapse as set forth in that form. (3) Explosion; (4) Under this Extension, the most we will (4) Riot or Civil Commotion; or pay to replace or restore the lost (5) Aircraft. information is $2,500 at each described premises, unless a higher limit is shown The most we will pay for loss or damage in the Declarations. Such amount is under this Extension is $1,000, but not additional insurance. We will also pay more than $250 for any one tree, shrub or for the cost of blank material for plant. These limits apply to any one reproducing the records (whether or not occurrence, regardless of the types or duplicates exist) and (when there is a number of items lost or damaged in that duplicate) for the cost of labor to occurrence. transcribe or copy the records. The costs of blank material and labor are subject to the applicable Limit of Insurance on Your Business Personal Property and, therefore, coverage of such costs is not additional insurance.

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Subject to all aforementioned terms and (2) If the applicable Covered Causes of limitations of coverage, this Coverage Loss form or endorsement contains a Extension includes the expense of limitation or exclusion concerning loss or removing from the described premises the damage from sand, dust, sleet, snow, debris of trees, shrubs and plants which are ice or rain to property in a structure, the property of others. such limitation or exclusion also applies to property in a portable storage unit. f. Non-owned Detached Trailers (3) Coverage under this Extension: (1) You may extend the insurance that applies to Your Business Personal (a) Will end 90 days after the business Property to apply to loss or damage to personal property has been placed in trailers that you do not own, provided the storage unit; that: (b) Does not apply if the storage unit (a) The trailer is used in your business; itself has been in use at the described premises for more than 90 (b) The trailer is in your care, custody or consecutive days, even if the control at the premises described in business personal property has been the Declarations; and stored there for 90 or fewer days as (c) You have a contractual responsibility of the time of loss or damage. to pay for loss or damage to the (4) Under this Extension, the most we will trailer. pay for the total of all loss or damage to (2) We will not pay for any loss or damage business personal property is $10,000 that occurs: (unless a higher limit is indicated in the (a) While the trailer is attached to any Declarations for such Extension) motor vehicle or motorized regardless of the number of storage conveyance, whether or not the units. Such limit is part of, not in addition motor vehicle or motorized to, the applicable Limit of Insurance on conveyance is in motion; Your Business Personal Property. Therefore, payment under this (b) During hitching or unhitching Extension will not increase the operations, or when a trailer applicable Limit of Insurance on Your becomes accidentally unhitched from Business Personal Property. a motor vehicle or motorized conveyance. (5) This Extension does not apply to loss or damage otherwise covered under this (3) The most we will pay for loss or damage Coverage Form or any endorsement to under this Extension is $5,000, unless a this Coverage Form or policy, and does higher limit is shown in the Declarations. not apply to loss or damage to the (4) This insurance is excess over the storage unit itself. amount due (whether you can collect on Each of these Extensions is additional it or not) from any other insurance insurance unless otherwise indicated. The covering such property. Additional Condition, Coinsurance, does not g. Business Personal Property Temporarily apply to these Extensions. In Portable Storage Units B. Exclusions And Limitations (1) You may extend the insurance that See applicable Causes Of Loss form as shown in applies to Your Business Personal the Declarations. Property to apply to such property while temporarily stored in a portable storage C. Limits Of Insurance unit (including a detached trailer) The most we will pay for loss or damage in any located within 100 feet of the building or one occurrence is the applicable Limit Of structure described in the Declarations Insurance shown in the Declarations. or within 100 feet of the premises The most we will pay for loss or damage to described in the Declarations, whichever outdoor signs, whether or not the sign is attached distance is greater. to a building, is $2,500 per sign in any one occurrence.

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The amounts of insurance stated in the following Total amount of loss payable: Additional Coverages apply in accordance with the $59,850 + $80,000 = $139,850 terms of such coverages and are separate from the Limit(s) Of Insurance shown in the Example 2 Declarations for any other coverage: (This example, too, assumes there is no Coinsurance 1. Fire Department Service Charge; penalty.) 2. Pollutant Clean-up And Removal; and The Deductible and Limits of Insurance are the same as those in Example 1. 3. Electronic Data. Payments under the Preservation Of Property Loss to Building 1: $ 70,000 Additional Coverage will not increase the (Exceeds Limit of Insurance plus Deductible) applicable Limit of Insurance. Loss to Building 2: $ 90,000 D. Deductible (Exceeds Limit of Insurance plus Deductible) In any one occurrence of loss or damage Loss Payable – Building 1: $ 60,000 (hereinafter referred to as loss), we will first reduce (Limit of Insurance) the amount of loss if required by the Coinsurance Loss Payable Condition or the Agreed Value Optional Coverage. – Building 2: $ 80,000 If the adjusted amount of loss is less than or equal (Limit of Insurance) to the Deductible, we will not pay for that loss. If Total amount of loss payable: $ 140,000 the adjusted amount of loss exceeds the Deductible, we will then subtract the Deductible E. Loss Conditions from the adjusted amount of loss and will pay the The following conditions apply in addition to the resulting amount or the Limit of Insurance, Common Policy Conditions and the Commercial whichever is less. Property Conditions: When the occurrence involves loss to more than 1. Abandonment one item of Covered Property and separate Limits There can be no abandonment of any property of Insurance apply, the losses will not be to us. combined in determining application of the Deductible. But the Deductible will be applied only 2. Appraisal once per occurrence. If we and you disagree on the value of the Example 1 property or the amount of loss, either may make written demand for an appraisal of the (This example assumes there is no Coinsurance loss. In this event, each party will select a penalty.) competent and impartial appraiser. The two Deductible: $ 250 appraisers will select an umpire. If they cannot agree, either may request that selection be Limit of Insurance – Building 1: $ 60,000 made by a judge of a court having jurisdiction. Limit of Insurance – Building 2: $ 80,000 The appraisers will state separately the value Loss to Building 1: $ 60,100 of the property and amount of loss. If they fail Loss to Building 2: $ 90,000 to agree, they will submit their differences to the umpire. A decision agreed to by any two The amount of loss to Building 1 ($60,100) is less will be binding. Each party will: than the sum ($60,250) of the Limit of Insurance a. Pay its chosen appraiser; and applicable to Building 1 plus the Deductible. b. Bear the other expenses of the appraisal The Deductible will be subtracted from the amount of and umpire equally. loss in calculating the loss payable for Building 1: If there is an appraisal, we will still retain our $ 60,100 right to deny the claim. – 250 3. Condominium Association Insurance $ 59,850 Loss Payable – Building 1 The Condominium Association may have other The Deductible applies once per occurrence and insurance covering the same property as this therefore is not subtracted in determining the amount insurance. This insurance is intended to be of loss payable for Building 2. Loss payable for excess, and not to contribute with that other Building 2 is the Limit of Insurance of $80,000. insurance.

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4. Duties In The Event Of Loss Or Damage 5. Loss Payment a. You must see that the following are done in a. In the event of loss or damage covered by the event of loss or damage to Covered this Coverage Form, at our option, we will Property: either: (1) Notify the police if a law may have been (1) Pay the value of lost or damaged broken. property; (2) Give us prompt notice of the loss or (2) Pay the cost of repairing or replacing the damage. Include a description of the lost or damaged property, subject to b. property involved. below; (3) As soon as possible, give us a (3) Take all or any part of the property at an description of how, when and where the agreed or appraised value; or loss or damage occurred. (4) Repair, rebuild or replace the property (4) Take all reasonable steps to protect the with other property of like kind and Covered Property from further damage, quality, subject to b. below. and keep a record of your expenses We will determine the value of lost or necessary to protect the Covered damaged property, or the cost of its repair Property, for consideration in the or replacement, in accordance with the settlement of the claim. This will not applicable terms of the Valuation Condition increase the Limit of Insurance. in this Coverage Form or any applicable However, we will not pay for any provision which amends or supersedes the subsequent loss or damage resulting Valuation Condition. from a cause of loss that is not a Covered Cause of Loss. Also, if b. The cost to repair, rebuild or replace does feasible, set the damaged property not include the increased cost attributable aside and in the best possible order for to enforcement of or compliance with any examination. ordinance or law regulating the construction, use or repair of any property. (5) At our request, give us complete inventories of the damaged and c. We will give notice of our intentions within undamaged property. Include quantities, 30 days after we receive the sworn proof of costs, values and amount of loss loss. claimed. d. We will not pay you more than your (6) As often as may be reasonably required, financial interest in the Covered Property. permit us to inspect the property proving e. We may adjust losses with the owners of the loss or damage and examine your lost or damaged property if other than you. books and records. If we pay the owners, such payments will Also permit us to take samples of satisfy your claims against us for the damaged and undamaged property for owners' property. We will not pay the inspection, testing and analysis, and owners more than their financial interest in permit us to make copies from your the Covered Property. books and records. f. We may elect to defend you against suits (7) Send us a signed, sworn proof of loss arising from claims of owners of property. containing the information we request to We will do this at our expense. investigate the claim. You must do this g. We will pay for covered loss or damage within 60 days after our request. We will within 30 days after we receive the sworn supply you with the necessary forms. proof of loss, if you have complied with all (8) Cooperate with us in the investigation or of the terms of this Coverage Part, and: settlement of the claim. (1) We have reached agreement with you b. We may examine any insured under oath, on the amount of loss; or while not in the presence of any other (2) An appraisal award has been made. 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.

6. Recovered Property (d) Water damage; If either you or we recover any property after (e) Theft; or loss settlement, that party must give the other (f) Attempted theft. prompt notice. At your option, the property will be returned to you. You must then return to us (2) With respect to Covered Causes of Loss the amount we paid to you for the property. We other than those listed in b.(1)(a) will pay recovery expenses to repair the through b.(1)(f) above, we will reduce recovered property, subject to the Limit of the amount we would otherwise pay for Insurance. the loss or damage by 15%. 7. Vacancy 8. Valuation a. Description Of Terms We will determine the value of Covered Property in the event of loss or damage as (1) As used in this Vacancy Condition, the follows: term building and the term vacant have the meanings set forth in (1)(a) and a. At actual cash value as of the time of loss (1)(b) below: or damage, except as provided in b. and c. below. (a) When this policy is issued to a tenant, and with respect to that b. "Stock" you have sold but not delivered at tenant's interest in Covered Property, the selling price less discounts and building means the unit or suite expenses you otherwise would have had. rented or leased to the tenant. Such c. Glass at the cost of replacement with building is vacant when it does not safety-glazing material if required by law. contain enough business personal F. Additional Condition property to conduct customary operations. COINSURANCE (b) When this policy is issued to the If a Coinsurance percentage is shown in the owner or general lessee of a Declarations, the following condition applies in building, building means the entire addition to the Common Policy Conditions and the building. Such building is vacant Commercial Property Conditions: unless at least 31% of its total a. We will not pay the full amount of any loss if square footage is: the value of Covered Property at the time of (i) Rented to a lessee or sublessee loss times the Coinsurance percentage and used by the lessee or shown for it in the Declarations is greater sublessee to conduct its than the Limit of Insurance for the property. customary operations; and/or Instead, we will determine the most we will (ii) Used by the building owner to pay using the following steps: conduct customary operations. (1) Multiply the value of Covered Property (2) Buildings under construction or at the time of loss by the Coinsurance renovation are not considered vacant. percentage; b. Vacancy Provisions (2) Divide the Limit of Insurance of the property by the figure determined in If the building where loss or damage occurs Step (1); has been vacant for more than 60 consecutive days before that loss or (3) Multiply the total amount of loss, before damage occurs: the application of any deductible, by the figure determined in Step (2); and (1) We will not pay for any loss or damage caused by any of the following, even if (4) Subtract the deductible from the figure they are Covered Causes of Loss: determined in Step (3). (a) Vandalism; We will pay the amount determined in Step (4) or the Limit of Insurance, whichever is (b) Sprinkler leakage, unless you have less. For the remainder, you will either have protected the system against to rely on other insurance or absorb the freezing; loss yourself. (c) Building glass breakage;

Example 1 (Underinsurance) Example 3 When: The value of the property is: $ 250,000 When: The value of the property is: The Coinsurance percentage Personal Property for it is: 80% at Location 1: $ 175,000 The Limit of Insurance for it is: $ 100,000 Personal Property The Deductible is: $ 250 at Location 2: $ 75,000 The amount of loss is: $ 40,000 $ 250,000 Step (1): $250,000 x 80% = $200,000 The Coinsurance percentage (the minimum amount of insurance to for it is: 90% meet your Coinsurance requirements) The Limit of Insurance for Step (2): $100,000 ÷ $200,000 = .50 Personal Property at Locations 1 and 2 is: $ 180,000 Step (3): $40,000 x .50 = $20,000 The Deductible is: $ 1,000 Step (4): $20,000 – $250 = $19,750 The amount of loss is: We will pay no more than $19,750. The remaining Personal Property $20,250 is not covered. at Location 1: $ 30,000 Example 2 (Adequate Insurance) Personal Property at Location 2: $ 20,000 When: The value of the property is: $ 250,000 The Coinsurance percentage $ 50,000 for it is: 80% Step (1): $250,000 x 90% = $225,000 The Limit of Insurance for it is: $ 200,000 (the minimum amount of insurance to The Deductible is: $ 250 meet your Coinsurance requirements and to avoid the penalty shown below) The amount of loss is: $ 40,000 Step (2): $180,000 ÷ $225,000 = .80 The minimum amount of insurance to meet your Step (3): $50,000 x .80 = $40,000 Coinsurance requirement is $200,000 ($250,000 x 80%). Therefore, the Limit of Insurance in this Step (4): $40,000 – $1,000 = $39,000 example is adequate and no penalty applies. We will We will pay no more than $39,000. The remaining pay no more than $39,750 ($40,000 amount of loss $11,000 is not covered. minus the deductible of $250). G. Optional Coverages b. If one Limit of Insurance applies to two or If shown as applicable in the Declarations, the more separate items, this condition will following Optional Coverages apply separately to apply to the total of all property to which the each item: limit applies. 1. Agreed Value a. The Additional Condition, Coinsurance, does not apply to Covered Property to which this Optional Coverage applies. We will pay no more for loss of or damage to that property than the proportion that the Limit of Insurance under this Coverage Part for the property bears to the Agreed Value shown for it in the Declarations.

b. If the expiration date for this Optional (4) "Stock", unless the Including "Stock" Coverage shown in the Declarations is not option is shown in the Declarations. extended, the Additional Condition, c. You may make a claim for loss or damage Coinsurance, is reinstated and this Optional covered by this insurance on an actual cash Coverage expires. value basis instead of on a replacement c. The terms of this Optional Coverage apply cost basis. In the event you elect to have only to loss or damage that occurs: loss or damage settled on an actual cash (1) On or after the effective date of this value basis, you may still make a claim for Optional Coverage; and the additional coverage this Optional Coverage provides if you notify us of your (2) Before the Agreed Value expiration date intent to do so within 180 days after the loss shown in the Declarations or the policy or damage. expiration date, whichever occurs first. d. We will not pay on a replacement cost basis 2. Inflation Guard for any loss or damage: a. The Limit of Insurance for property to which (1) Until the lost or damaged property is this Optional Coverage applies will actually repaired or replaced; and automatically increase by the annual percentage shown in the Declarations. (2) Unless the repairs or replacement are made as soon as reasonably possible b. The amount of increase will be: after the loss or damage. (1) The Limit of Insurance that applied on e. We will not pay more for loss or damage on the most recent of the policy inception a replacement cost basis than the least of date, the policy anniversary date, or any (1), (2) or (3), subject to f. below: other policy change amending the Limit of Insurance, times (1) The Limit of Insurance applicable to the lost or damaged property; (2) The percentage of annual increase shown in the Declarations, expressed as (2) The cost to replace the lost or damaged a decimal (example: 8% is .08), times property with other property: (3) The number of days since the beginning (a) Of comparable material and quality; of the current policy year or the effective and date of the most recent policy change (b) Used for the same purpose; or amending the Limit of Insurance, divided (3) The amount actually spent that is by 365. necessary to repair or replace the lost or Example damaged property. If: The applicable Limit of Insurance is: $ 100,000 If a building is rebuilt at a new premises, the cost described in e.(2) above is limited to The annual percentage increase is: 8% the cost which would have been incurred if The number of days since the the building had been rebuilt at the original beginning of the policy year premises. (or last policy change) is: 146 f. The cost of repair or replacement does not The amount of increase is: include the increased cost attributable to $100,000 x .08 x 146 ÷ 365 = $ 3,200 enforcement of or compliance with any ordinance or law regulating the 3. Replacement Cost construction, use or repair of any property. a. Replacement Cost (without deduction for 4. Extension Of Replacement Cost To depreciation) replaces Actual Cash Value in Personal Property Of Others the Loss Condition, Valuation, of this Coverage Form. a. If the Replacement Cost Optional Coverage is shown as applicable in the Declarations, b. This Optional Coverage does not apply to: then this Extension may also be shown as (1) Personal property of others; applicable. If the Declarations show this (2) Contents of a residence; Extension as applicable, then Paragraph 3.b.(1) of the Replacement Cost Optional (3) Works of art, antiques or rare articles, Coverage is deleted and all other provisions including etchings, pictures, statuary, of the Replacement Cost Optional marbles, bronzes, porcelains and bric-a- Coverage apply to replacement cost on brac; or personal property of others.

b. With respect to replacement cost on the H. Definitions personal property of others, the following 1. "Pollutants" means any solid, liquid, gaseous or limitation applies: thermal irritant or contaminant, including If an item(s) of personal property of others smoke, vapor, soot, fumes, acids, alkalis, is subject to a written contract which chemicals and waste. Waste includes materials governs your liability for loss or damage to to be recycled, reconditioned or reclaimed. that item(s), then valuation of that item(s) 2. "Stock" means merchandise held in storage or will be based on the amount for which you for sale, raw materials and in-process or are liable under such contract, but not to finished goods, including supplies used in their exceed the lesser of the replacement cost packing or shipping. of the property or the applicable Limit of Insurance.