Fail Safe MEGA Technology Errors or Omissions Liability Coverage Form –Claims Made and First Reported


Insuring Agreement
When We Insure




Limits of Liability
Retention for Each “Glitch”


Terms Applicable to Both Types of Extended Reporting Period
Basic Extended Reporting Period
Optional Extended Reporting Period


When We Do Not Renew
Duties in the Event of “Glitch” or “Claim”
Legal Action Against Us
Mergers, Consolidations or Acquisitions
Other Insurance and Payments Available to “You”
Payment of Premiums and Retention
Transfer of Rights of Recovery Against Others to Us
Transfer of “Your” Rights and Duties Under this Coverage Part
Representations and Statements






The words “we”, “us” and “our” refer to the stock insurance company member of THE HARTFORD shown on the Declarations Page of this coverage part.

The words “you” and “your” mean any person or entity described under the definition of “you or your” in Section II – Definitions.

The words “glitch” and “technology services” are defined in Section I – Coverage.

Except for the definitions mentioned above and captions, all other words and phrases that appear in quotes are defined in Section II – Definitions.

In return for payment of the premium, and subject to all of the terms and conditions of this coverage part, including those changed, added or deleted by endorsements that we issue forming a part of this coverage part, we agree with “you” as follows:


A. Insuring Agreement

1. We will pay on “your” behalf all sums in excess of the Retention that “you” become legally required to pay as “damages” and “claim expenses” because of a “claim” caused by a “glitch” in “your” performance of “technology services”.

2. “Glitch” means the following when actually or allegedly committed by “you” or on “your” behalf:

             a. Negligent: act, error or omission; and

             b. Failure of “your” “technology services” to perform the function or serve the purpose intended.

All “glitches” committed on or after the Retroactive Date and before the end of the last technology errors and omissions liability coverage issued by an insurance company member of The Hartford in an uninterrupted succession of renewed coverage parts or policies will be considered one “glitch” when they are logically or causally connected by common facts, circumstances, situations,
events, transactions and/or decisions. Coverage for each such “glitch” is subject to the Each “Glitch” Limit.

3. “Technology services” means the following services performed for others:

         a. Consulting, analysis, design, installation, training, maintenance, support and repair of or on: software, wireless applications, firmware, shareware, networks, systems, hardware, devices or components;

        b. Integration of systems;

       c. Processing of, management of, mining or warehousing of data;

       d. Administration, management, operation or hosting of: another party’s systems, technology or computer facilities;

       e. Manufacture, sale, licensing, distribution, or marketing of: software, wireless applications, firmware, shareware, networks, systems, hardware, devices or components;

       f. Design and development of: code, software or programming; and

      g. Providing software application: services, rental or leasing.

B. Defense

1. For all covered “claims” brought in the United States of America, its territories and possessions, Puerto Rico or Canada, we have the right and duty to defend “you”. We have the right to appoint counsel. We may investigate any “claim” as we deem appropriate.

2. For all covered “claims” brought outside the United States of America, Puerto Rico or Canada, we have the right but not the duty to defend “you”, appoint counsel and investigate. If we choose not to defend, appoint counsel and investigate such a “claim”, the “first
named insured” under our supervision will arrange for investigation and defense of the “claim” as reasonably appropriate. Subject to the Limits of Liability, we will reimburse the “first named insured” for paying “damages” or “claim expenses” for covered “claims”.

3. The following terms apply to all covered “claims”, wherever they are brought:

        a. “You” will not settle any “claim” without our prior written consent, even if the “claim” is less than the amount of the Retention. We have the right to settle all “claims”, wherever brought, unless we receive a written objection from the “first named insured” before we agree to a settlement. The “first named insured” will be notified before we agree to a settlement. If the “first named insured” objects to a settlement recommended by us and acceptable to the claimant, then our duty to pay will be limited to:

                  (1) The amount of “damages” for which the “claim” could have been settled; plus

                  (2) All “claim expenses” incurred and paid or payable by us or the “first named insured” at the time we made our recommendation.

If the total of those amounts falls within “your” Retention, we will have no duty to pay “damages” and “claim expenses” on that “claim”.

In no event will we be obligated to pay more than the remaining applicable Limit of Liability determined under Section IV – Limits of Liability and Retention.

In “claims” where the “first named insured” has objected to a settlement recommended by us, we have the right to stop defending and paying “claim expenses” upon tendering control of the defense to “you”.

             b. We have the right to exercise all of “your” rights in choosing arbitrators and in conducting all arbitrations.
c. Our right and duty to defend “claims” and to pay or reimburse for “claim expenses” will end when we have used up the applicable Limit of Liability by paying “damages” and/or “claim expenses”.

C. When We Insure

1. This coverage part applies to a “glitch” only if all the terms in a. through c. below are met:

      a. The “glitch” was committed on or after the Retroactive Date shown in the Declarations and before the end of the “coverage period”;

      b. Before the effective date of this coverage period shown in the Declarations, none of “you” knew of a “glitch” or any fact(s) or circumstance(s) which could reasonably be expected to result in the “claim”; and
c. The “claim” because of the “glitch” is:

             (1) First made against any of “you” during the “coverage period”; and

            (2) Reported to us in writing during the “coverage period”. But, subject to provisions of Section VI – Conditions, subsection H.,
“claims” first made against any of “you” during the last thirty (30) days of the expiring “coverage period” must be reported to us in
writing no later than thirty (30) days after the expiring “coverage period”; all such “claims” will be deemed to have been reported on the last day of this “coverage period”.

2. All “claims” arising from the same “glitch”, as defined in Section I – Coverage, are considered to be one “claim”.

3. A “claim” is deemed first made when the earliest of the following occurs:

       a. Any of “you” receive written notice of such “claim”; or

       b. Subject to Section VI – Conditions, Duties in the Event of “Glitch” or “Claim”, we receive from “you” or “your” agent written notice of the “glitch”, which later results in a “claim”.

A “claim” is deemed reported to us when we first receive it in writing.


A.”Asbestos hazard” means an exposure or threat of exposure to the actual or alleged properties of asbestos and includes the mere presence of asbestos in any form.

B. “Bodily injury” means bodily injury, sickness, disease or death sustained by a person; and mental anguish, emotional distress, mental injury, fright and shock.

C. “Claim” means a written demand received by any of “you” for “damages”. This includes a suit, arbitration or other type of alternative
dispute resolution proceeding against any of “you”.

D. “Claim expenses” means reasonable expenses incurred by us, or by “you” with our prior written consent, in the investigation
and defense of a “claim”.

1. “Claim expenses” also include:

       a. The cost of bonds to release attachments, but only for bond amounts within the remaining applicable Limit of Liability. We do not have to furnish these bonds;

b. Costs taxed against “you” in the suit;

c. Interest on the full amount of any judgment that accrues before or after entry of the judgment and before we have paid, offered to pay or deposited in court the part of the judgment that is within the remaining applicable Limit of Liability; and

     d. Actual loss of earnings up to $500 per day for each of “you” that “you” personally incur because of time off from work at our request to help us investigate or defend a “claim”.

2. “Claim expenses” do not include salaries and expenses of “your” employees.

E. “Contract worker agreement” means a signed agreement between the “named insured” and an individual person who is an agent or independent contractor when the agreement provides that:

        1. The agent or independent contractor will provide specific “technology services” on behalf of and under the direct and continuing supervision of the “named insured”;

       2. The “named insured” will indemnify the agent or independent contractor for those “technology services”; and

       3. The agreement is made before any “glitch” that may give rise to a “claim”.

F. “Coverage period” means the time beginning with the effective date shown in the Declarations and ending with the earlier of:

        1. The date of termination or cancellation; or

        2. The expiration date shown in the Declarations.

G. “Damages” means a money award, judgment or settlement that “you” become legally required to pay, including punitive,
exemplary and multiplied damages where insurable by law.

“Damages” does not include:

1. Any kind of: refund, rebate, redemption coupon, offset, return or credit that has been paid to or by any of “you”, or that is owed to or by any of “you”; examples include but are not limited to any of the following: any licensing fee or other fee, royalty, subscription or access charge, or other charge;

2. Disgorgement of profits or any money or credits that represent any gain, profit or advantage to which any of “you” are not legally entitled;

3. “Your” cost to comply with any non-money or injunctive relief;

4. Cost or expense to recall, upgrade, replace, repair, correct, complete or reperform “technology services”, in whole or part, by:

a. Any of “you”; or

b. Another party if any of “you” had the opportunity to recall, upgrade, replace, repair, correct, complete or reperform “technology services”;

5. Any criminal: fine or penalty;

6. Any payment any of “you” make without our prior written consent; or

7. The purchase or contract price for “your” “technology services”.

H. “Executive officer” means a director or officer in a position created by “your” charter, constitution, by-laws or any other similar governing document.

“First named insured” means the “named insured” first listed in the Declarations.

J.“Named insured” means:

1. The persons or entities listed in the Declarations; and Any “subsidiary”.

K. “Personal injury” means:

1. Any form of defamation or disparagement causing harm to the character, reputation or feelings of any person, entity, product or service, including but not limited to libel, slander, product or service disparagement, trade libel, infliction of emotional distress, outrage or outrageous conduct;

2. Any form of invasion, infringement or interference with rights of publicity or privacy, including but not limited to false light, public disclosure of private facts, intrusion and commercial appropriation of name or likeness; or

3. Wrongful entry or eviction, trespass, eavesdropping or other invasion of the right of private occupancy; or malicious prosecution or false: arrest, detention or imprisonment.

L. “Pollutants” means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed.

M. “Property Damage” means physical damage to or physical loss of tangible property and any resulting loss, corruption or destruction of data or information, including all resulting loss of use of that property, data or information.

“Property Damage” does not mean the loss, corruption or destruction of data or information when the tangible property on which the data or information is or was kept is not physically damaged or physically lost.

N. “Subsidiary” means any corporation of which the “first named insured” owns, directly or indirectly, more than fifty percent (50%) of the issued and outstanding voting stock. The stock must be owned by the “first named insured” on the effective date of the “coverage period” shown in the Declarations.

      1. “Subsidiary” also includes any corporation which becomes a “subsidiary” during the “coverage period”, provided that as soon as prictical, but no later than within sixty (60) days of its becoming a “subsidiary”, “you” have:

              a. Provided us with full details of the new “subsidiary” including a completed and signed “subsidiary” application and any other underwriting information we may require;

             b. Agreed to and paid any additional premium related to the “subsidiary”; and

             c. Agreed to any change in the terms and conditions of this coverage part required by us relating to the new “subsidiary”.

    2. This coverage part does not apply to any “claim” arising from or involving a “subsidiary” for any “glitch” that was committed when the “first named insured” did not own directly or indirectly more than 50% of the issued and outstanding voting stock of the “subsidiary”.

O. “Temporary worker” means a person who is provided to “you” by a third party for a specific time period to support or increase “your” work force in special situations. Such situations may include employee absences, temporary skill shortages and seasonal workloads. A temporary worker is not an employee of “yours”.

P. “You” or “your” mean, individually and collectively:

        1. Any “named insured” and:

                a. If the “named insured” is a sole proprietor, the spouse of the “named insured” at the time a “claim” is made; and

                b. If the “named insured” is a partnership, the spouses of individual partners of the “named insured” at the time a “claim” is made; but only for the spouse’s liability as the spouse of the sole proprietor or individual partner;

       2. Any past or present partner, “executive officer”, director or manager of the”named insured” but only while performing their duties as such;

      3. Any past or present employee of the”named insured” but only while performing their duties as such; employee does not include a “temporary worker”;

4. Any individual person who is an agent or independent contractor but only while acting within the scope of his or her”contract worker agreement” with the”named insured”;

     5. A client that the “named insured” is required, in a written contract to perform “technology services”, to add as an additional insured under this coverage part. But the client is insured under this coverage part only if:

               a. The “glitches” were committed by the “named insured” in the “named insured’s” performance of “technology services”;

               b. The written contract is entered before the “glitch” giving rise to the”claim” is committed; and

              c. There are no allegations of independent misconduct by the client;

6. Any member or stockholder of the “named insured”’; but this only applies with respect to their liability as a member or stockholder; or The executors, administrators or legal representatives of each of “you” listed in items 1. through 6. above in the event of “your” death, incapacity or bankruptcy; but this only applies while performing their duties as such.


A. We will not pay “damages” or “claim expenses” or defend any of “you” for any “glitch” or “claim” arising out of or in any way related to any actual or alleged:

         1. “Bodily injury”, “property damage”, or “personal injury”;

         2. Obligation which any of “you” may have to pay under any workers’ compensation act, employer’s liability law, unemployment compensation law, disability benefits law, or any similar law or any foreign equivalent;

         3. Gradual deterioration of, wear and tear of or inherent vice in tangible property;

         4. Disruption of, surge in, fluctuation in or loss of: power, connectivity or communications. However, this exclusion will not apply to any of the foregoing when directly caused by a “glitch” committed by any of “you”;

         5. Withdrawal or recall of all or part of “technology services” from the marketplace. However this exclusion will not apply to “claims” by third parties for the loss of use resulting from withdrawal or recall of “technology services” due to a “glitch” committed by any of “you”;

        6. Delay in or failure to complete “technology services”. However, this exclusion will not apply if the delay or failure to complete “technology services” is the result of a “glitch” committed by any of “you”;

         7. Security or system attack, including but not limited to web site defacement, domain hijacking, unauthorized access to, unauthorized use of, tampering with or introduction of malicious code into: firmware, data, software, systems or networks; or any resulting denial of service or repudiation of access;

        8. Cost: overruns, guarantees, estimates or estimates being exceeded;

        9. Discontinuance or cessation by any of “you” of the provision, support or maintenance of any “technology services”;

       10. False, deceptive, fraudulent, intentionally misleading or misrepresenting statements in advertising or in sales activities;

       11. Sweepstakes, lotteries or other games of chance; or contests;

       12. Price fixing, or any other violation of: any securities, antitrust, restraint of trade, unfair or deceptive business practices,
unfair competition or consumer protection laws, the Racketeer Influenced and Corrupt Organizations Act; any similar law; or any foreign equivalent;

       13. Violation or misuse of any intellectual property right, including but not limited to:

                   a. Infringement or dilution of: title, slogan, trademark, trade name, trade dress, service mark or service name;

                   b. Infringement of copyright, plagiarism or misappropriation of ideas;

                   c. Piracy;

                   d. Patent infringement or patent misuse; or Misuse, misappropriation or theft of trade secrets;

14.Breach of :

                 a. Warranty;

                 b. Guaranty; or

                 c. Contract, except for liability which “you” would have in the absence of a contract;

15. Tortious interference with the contractual relationships of others;

16. Bankruptcy or insolvency of any of “you”;

17. Discrimination, harassment or misconduct by any of “you” because of or relating to: race, creed, color, age, gender, sex, sexual preference or orientation, national origin, religion, disability, handicap, health condition, marital status, or any other class protected under federal, state, local or other law; or any similar law in a jurisdiction outside the United States of America;

18. Acts or omissions by any of “you” regarding:

                  a. Refusal to employ;

                  b. Termination of a person’s employment; or

                  c. Employment-related practices, policies, acts or omissions; these include but are not limited to coercion, demotion, evaluation, re-assignment, discipline, defamation, harassment, humiliation or discrimination.

This exclusion applies whether “you” may be held liable as an employer or in any other capacity.

19. Breach of fiduciary duty or other responsibility in connection with any employee benefit or pension plan; this includes but is not limited to violation of the duty or responsibility imposed on fiduciaries by the Employee Retirement Income Security Act of 1974 (ERISA) or any changes to that law; any similar law; or any foreign equivalent;

20. Or threatened discharge, dispersal, seepage, migration, release or escape of “pollutants” or any loss, cost or expense arising out of any:

           a. Request, demand, order or statutory or regulatory requirement that any of “you” or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to or assess the effects of “pollutants”; or

           b. “Claim” or suit by or on behalf of a governmental authority for “damages” because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of “pollutants”;

21. Electromagnetic radiation, including but not limited to magnetic energy, waves, fields or forces; or

22. “Asbestos hazard” including any:

         1. Threatened loss, injury or damage of any nature or kind to persons or property which would not have occurred in whole or in part but for the “asbestos hazard”; or

         2. Request, demand or order to test for, monitor, clean up, remove, encapsulate, contain, treat, detoxify or neutralize or in any way respond to or assess the effects of an “asbestos hazard”; or

         3. Testing for, monitoring, cleaning up, removing, encapsulating, containing, treating, detoxifying or neutralizing or in any way
responding to or assessing the effects of an “asbestos hazard”

B. We will not pay “damages” or “claim expenses” or defend any of “you” for any “claim” brought by or on behalf of:

         1. Any of “you”; however, this exclusion will not apply to “claims” brought by any of “you” described in items 3., 4. or 5. of the definition of “you” when the “claim” is brought in their capacity as a client as a result of “technology services” performed by the “named insured” on their behalf;

        2. Any entity which is a parent, affiliate, “subsidiary”, joint venturer, co-venturer or other entity in which any of “you” “owns” an interest or is a partner, director, officer, sole proprietor, trustee or employee;

        3. Any entity affiliated with any of “you” through any common “ownership or control”;

        4. Any entity directly or indirectly “controlled”, operated or managed by any of “you”; or

        5. Any federal, state or local government body, subdivision or agency; any regulatory or licensing agency or bureau; or any foreign equivalent. However, this exclusion will not apply when the “claim” is brought in their capacity as a client as a result of “technology services” performed by the “named insured” on their behalf.

For the purposes of exclusions B.2. through 4. above, the words “owns,” “ownership or control” and “controlled” mean ten percent
(10%) or more ownership of a publicly-held corporation or thirty percent (30%) or more ownership of a privately-held corporation, or
ten percent (10%) or more of any other type of entity.

C. We will not pay “damages” or “claim expenses” for any “glitch” or “claim” arising out of or in any way related to any:

           1. Dishonest, fraudulent, criminal or intentional wrongful act or omission by any of “you”; or

           2. Material defect or bug known by any of “you” that could reasonably be expected to cause harm;

when such act or knowledge is established by “your” admission or final adjudication by a jury, court or arbitrator.

However, exclusions C.1. and 2. above do not apply to any of “you” who did not commit, acquiesce in, or remain passive after learning
of the actions giving rise to the “claim”.

For purposes of this exclusion, the knowledge, action or inaction of any “executive officer” or partner will be imputed
to the applicable “named insured”.

We will not pay “damages” or “claim expenses” or defend any of “you” for any “claim” arising out of or in any way related to any actual or alleged “glitch” or “claim” that has been reported under any other policy, issued by any entity, when the inception date of that other policy preceded the effective date of this “coverage period”.


A. Limits of Liability

1. Each “Glitch” Limit Subject to A.2. below, the Each “Glitch” Limit stated in the Declarations is the most we will pay for any combination of “claim expenses” and “damages” for the total of all “claims” made during the “coverage period”, including any applicable Extended Reporting Period, arising from one “glitch”, regardless of the number of:

           a. “You” this coverage part insures;

           b. “Claims” that are made; or

           c. Persons or entities making “claims”. The Each “Glitch” Limit is not reduced by the Retention.

2. Aggregate Limit: The Aggregate Limit stated in the Declarations is the most we will pay for any combination of “claim expenses” and “damages” for the total of all “claims” made during the “coverage period”, including any applicable Extended Reporting Period, regardless of the number of:

           a. “You” this coverage part insures;

           b. “Claims” that are made;

          c. Persons or entities making “claims”; or

          d. “Glitches” that are committed.

The Aggregate Limit is not reduced by the Retention.

B. Retention for Each “Glitch”

1. The Retention stated in the Declarations is the amount of money “you” must pay for covered “damages” and/or “claim expenses” for each “glitch” before this insurance will begin to pay. You may not insure the Retention.

2. The Retention will not be reduced by the payment of any deductible amount or any amount retained by any of “you” under any other policy of insurance; and the Retention will not be reduced by any payment made on “your” behalf by another person or entity.

3. The Retention will not reduce the Limits of Liability. “You” will pay the full amount of the Retention for each “glitch” to appropriate
parties as directed by us. If we advance any such payments, “you” will reimburse us within thirty (30) days of our written demand. If “you” fail to make direct payments or to reimburse us as described above, all of “you” against whom the “claim” has been made and the “named insured” are individually and collectively responsible for paying us back for any advance payments we have made and for interest, attorney’s fees and costs associated with our collection of the money.


A. Terms Applicable to Both Types of Extended Reporting Period

An Extended Reporting Period changes only the time within which a covered “claim” may be made by a claimant and reported to us. All other policy terms and conditions remain the same.

This coverage part has two types of Extended Reporting Periods. The Basic Extended Reporting Period and the Optional Extended Reporting Period:

1. Provide coverage for “claims” that are both first made and reported in writing to us during the applicable Extended Reporting Period. But this applies only if all of the following conditions are also met:

                a. The “glitch” is committed on or after the Retroactive Date and before the end of the “coverage period”;

                b. Before the effective date of the “coverage period” shown in the Declarations, none of “you” knew of either the “glitch” or any fact(s) or circumstance(s) which could reasonably be expected to result in a “claim”; and

               c. There is no other insurance for the “claim”;

2. Do not extend the “coverage period” or change the scope of coverage provided;

3. Do not reinstate or increase the Limits of Liability. The Limits of Liability for any Extended Reporting Period will be a part of, and not in addition to, the Limits of Liability listed in the Declarations;

4. Run concurrently if the Optional Extended Reporting Period is purchased; and

5. Are not renewable.

B. Basic Extended Reporting Period

We will automatically provide a Basic Extended Reporting Period if this coverage part is:

               1. Cancelled;

               2. Non-renewed; or

               3. Renewed by us with insurance that does not apply on a claims made or claims made and reported basis.

The Basic Extended Reporting Period begins with the end of the “coverage period” and lasts for sixty (60) days. The Basic Extended Reporting Period is provided at no charge.

Under this provision, “you” have sixty (60) days after the end of the “coverage period” to report to us in writing “claims” first made against any of “you” during the Basic Extended Reporting Period. All such “claims” reported will be deemed to have been made and reported on the last day of the “coverage period”.

“Claims” reported to us after that sixty (60) day period will not be covered unless the “first named insured” purchases an Optional Extended Reporting Period described in item C. below.

C. Optional Extended Reporting Period

1. For an additional premium, we will offer an Optional Extended Reporting Period endorsement, unless this coverage part is cancelled for non-payment of premium, non-payment of Retention or for “your” failure to comply with policy provisions.

2. If the Optional Extended Reporting Period endorsement is purchased, “you” have the period of time, stated in the endorsement, after the end of the “coverage period” to report “claims” first made against any of “you” during the Optional Extended Reporting Period. All such “claims” reported will be deemed to have been made and reported on the last day of the “coverage period”. The Optional Extended Reporting Period begins with the end of the “coverage period” and lasts for the period of time stated in the endorsement.

3. Optional Extended Reporting Period coverage is available only if:

               a. The “first named insured” has paid all premiums and Retentions due for this coverage part at the time the “first named insured” requests an Optional Extended Reporting Period endorsement;

               b. We receive the “first named insured’s” written request for it within thirty (30) days after the end of the “coverage period”;

               c. The “first named insured” gives us written acceptance of our offer within fifteen (15) days of the day that we make our offer; and

              d. We receive payment in full for the Optional Extended Reporting Period within thirty (30) days of the “first named insured’s” acceptance of our offer.

4. Upon receipt of the “first named insured’s” written request made in accordance with provision 3.b. above, we will provide the “first named insured” an offer for the Optional Extended Reporting Period, for a period no greater than five years and for an additional premium no greater than 200% of the annual premium.

5. Once in effect, the Optional Extended Reporting Period cannot be cancelled. We need not return any part of the premium paid for any reason whatsoever.

6. Premium for the Optional Extended Reporting Period will be determined by taking into account the following: The exposures insured; Previous types and amounts of insurance; Limits of Liability available under this coverage part for future payment of “glitches” and “claim expenses”; and Other related factors.


Solely as pertains to the coverage provided by this coverage part, if any of the conditions in Section VI – CONDITIONS conflict with conditions found in the Common Policy conditions, the conditions in this SECTION VI – CONDITIONS govern.

A. Territory

This coverage part applies to “glitches” committed anywhere in the universe; except this coverage part does not apply when the “claim” is made in a country against which the United States government has imposed trade sanctions, embargoes, or any similar regulations that prohibit the transaction of business with or within such countries at the time the “claim” is made.

B. Currency
The currency of this coverage part is United States of America dollars. If “damages” or “claim expenses” are paid in a currency other than United States dollars, payment will be considered to have been made in United States dollars at the rate of exchange that was used for the payment. If no actual currency exchange was made, then the rate of exchange will be the rate published in The Wall Street Journal on the day following the date that payment was made.

C. Bankruptcy

Bankruptcy or insolvency of “you” or of “your” estate will not relieve us of our obligations under this policy.

D. Cancellation

1. The “first named insured” may cancel this coverage part by mailing or delivering to us advance written notice of cancellation.

2. We may cancel this coverage part by mailing or delivering to the “first named insured” written notice of cancellation at least:

               a. Ten (10) days before the cancellation is effective, if we cancel for nonpayment of any premium when due; or

               b. Thirty (30) days before the cancellation is effective, if we cancel for any other reason.

3. We will mail or deliver our notice to the last mailing address known to us for the “first named insured”.

4. Notice of cancellation by us will state when the cancellation is effective. The “coverage period” will end on that date.

5. If this coverage part is cancelled, we will send the “first named insured” any premium refund due. If we cancel, the refund will be the pro-rata unearned premium.

If the “first named insured” cancels, we will compute the return premium at ninety percent (90%) of the pro-rata unearned premium; however, we will retain no less than the minimum premium for this “coverage period” indicated in the Declarations.

6. Proof of mailing will be sufficient proof of notice.

7. Premium adjustment may be made either at the time cancellation is effected or as soon as practicable after cancellation becomes effective. But payment or tender of unearned premium is not a condition of cancellation.

E. When We Do Not Renew

1. If we decide not to renew this coverage part, we will mail written notice of non-renewal to the “first named insured”. We will mail the notice at least sixty (60) days before the “coverage period” ends.

2. We will mail it to the last mailing address known to us for the “first named insured”. Proof of mailing will be sufficient proof of notice.

3. If we offer to renew this coverage part on the same or different terms and the “first named insured” does not accept our offer during the current “coverage period”, this coverage part will expire at the end of the “coverage period”.

F. Duties in the Event of “Glitch” or “Claim”

1. The “named insured” must notify us in writing as soon as practicable of a “glitch” or circumstance that may result in a “claim” under this coverage part. This requirement applies only when the “glitch” is known to any of “you”.

2. If during the “coverage period” any of “you” first become aware of a “glitch” to which this coverage part applies which may result in a “claim” under this coverage part and give us written notice within the “coverage period” of:

                 a. The specific “glitch”, the date of the “glitch” and the name of the potential claimant;

                 b. The “damages” which have or may result from the “glitch”; and

                 c. The circumstances by which “you” first became aware of the “glitch”; then any “claim” first made arising out of the “glitch” will be deemed to have been made on the date we received written notice.

3. If a “claim” is made against any of “you”, “you” must:

                  a. Immediately record the specifics of the “claim” and the date received;

                  b. Immediately send us copies of all demands, notices, summonses and legal papers received in connection with the “claim”;

                  c. Authorize us to obtain records and other information;

                 d. Cooperate with us in the investigation, settlement, and defense of the “claim”; and

                 e. Assist us, upon our request, in enforcing any right against any person or entity that may be liable to “you” or the claimant because of “damages” to which this coverage part may also apply.

4. None of “you” will, except at “your” own cost, make a payment, assume any obligation, or incur any cost without our prior written consent.

G. Legal Action Against Us

1. No person or entity has a right under this coverage part:

                  a. To join us as a party or bring us into a suit asking for “damages” from “you”; or

                  b. To sue us under this coverage part unless all of its terms and conditions have been fully complied with.

2. A person or entity may sue us to recover on an agreed settlement or on a final judgment against “you” obtained after an actual trial or other binding adjudication. But we will not be liable for “claim expenses” or “damages” that are not payable under the terms and conditions of this policy or that are more than the applicable Limit of Liability.

An agreed settlement means a settlement that we agree to in writing.

H. Mergers, Consolidations or Acquisitions

1. If, after the effective date of this coverage part shown in the Declarations, the “named insured”:

                 a. Merges or consolidates with another entity; or

                 b. Acquires all or substantially all of the assets of another entity, and the “named insured” is the surviving entity, no coverage will be afforded under this coverage part for any “claim” involving: the entity with which the “named insured” merged, consolidated or acquired; or any of the assets, liabilities, directors, officers or employees of that entity.

2. However, we may endorse the policy to provide coverage for the conditions described above if, within sixty (60) days of the merger, consolidation or acquisition transaction, “you” have:

               a. Provided us with full details of the transaction and any other additional underwriting information that we may require;

               b. Agreed to any amendment of the terms and conditions of this policy by endorsement issued by us relating to such transaction; and

              c. Agreed to and paid any additional premium for the endorsement related to such transaction.

I. Other Insurance and Payments Available to “You”

The insurance under this coverage part will apply only in excess of all other:

1. Insurance, except for other insurance that is written specifically to apply in excess over this coverage part;

2. Bonds, self-insured retentions, deductibles, indemnifications; or

3. Similar agreements or payment options available to “you”.

whether they are stated to be primary, pro rata, contributory, contingent or otherwise.

J. Payment of Premiums and Retention

The “first named insured” must pay all premiums and Retentions when due. We will pay any return premiums to the “first named insured”.

K. Transfer of Rights of Recovery Against Others to Us
“You” must do nothing to impair “your” rights to recover all or any part of any payment we have made under this coverage part, and those rights are transferred to us. At our request “you” will bring suit or transfer those rights to us and help us enforce them. Any recoveries will be paid first to reimburse the person or entity that paid the subrogation costs, then to us for the amount we have paid for “claim expenses” and “damages”. Any amount that may remain will be paid to the “first named insured”.

L. Transfer of “Your” Rights and Duties Under This Coverage Part

“Your” rights and duties under this coverage part may not be transferred without our written consent except in the case of death
or bankruptcy.

If “you” die or become bankrupt, “your” rights and duties will be transferred to “your” legal representative but only while acting within the scope of duties as “your” legal representative.

Until “your” legal representative is appointed, anyone having proper temporary custody of “your” property will have “your” rights and duties but only with respect to that property.

M. Representations and Statements

By accepting this coverage part, “you” agree to all of the following:

1. The representations and statements contained in the application for coverage and other information submitted to us in applying for this coverage part are accurate and complete; they were made to induce our reliance upon them;

2. The representations and statements made to us in the application and other information submitted to us were made by or for the “named insured” on behalf of all of “you”; they are material to our decision to provide coverage; they are considered as incorporated in and constituting part of this coverage part;

3. We have issued this policy in reliance upon those representations and statements;

4. In the event the application or other information submitted to us contains misrepresentations or fails to state facts which affect our acceptance of the risk, the hazard assumed by us, the terms or conditions of the policy we offered or the premium we charged for this coverage part, we will not pay for any “claim expenses” or “damages” relating to a “glitch” or “claim” under this coverage part; and

5. If “you” report any “glitch” or “claim” knowing it, or any of the representations and statements regarding the “glitch” or “claim”, to be false or fraudulent, this coverage part will not make payments for the “glitch” or “claim”.

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