HomeMy WebLinkAbout2019-07-10 e-packet@6:00Wednesday, July 10, 2019
6:00 PM
City of South San Francisco
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, CA
Municipal Services Building, Council Chambers
33 Arroyo Drive, South San Francisco, CA
Joint Special Meeting City Council and Successor Agency
Special Meeting Agenda
July 10, 2019Joint Special Meeting City Council
and Successor Agency
Special Meeting Agenda
NOTICE IS HEREBY GIVEN, pursuant to Section 54956 of the Government Code of the State of
California, that the Successor Agency to the City of South San Francisco Redevelopment Agency and the City
Council will hold a Joint Special Meeting on Wednesday, July 10, 2019, at 6:00 p.m., in the Municipal Services
Building, Council Chambers, 33 Arroyo Drive, South San Francisco, California.
Purpose of the meeting:
Call to Order.
Roll Call.
Agenda Review.
Public Comments - comments are limited to items on the Joint Special Meeting.
ADMINISTRATION BUSINESS
Report regarding a resolution authorizing the City Manager/Executive Director to
purchase a Pollution Legal Liability policy with Beazley Group for the former landfill
located at Oyster Point in an amount not to exceed $256,087 and approving Budget
Amendment No. 20.008. (Jason Rosenberg, City Attorney)
1.
Resolution authorizing the City Manager/Executive Director to approve a Pollution
Legal Liability policy with Beazley Group for the former landfill located at Oyster
Point in an amount not to exceed $256,087 and approving Budget Amendment No.
20.008.
1a.
Adjournment.
Page 2 City of South San Francisco Printed on 8/14/2019
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:18-698 Agenda Date:7/10/2019
Version:1 Item #:1.
Report regarding a resolution authorizing the City Manager/Executive Director to purchase a Pollution Legal
Liability policy with Beazley Group for the former landfill located at Oyster Point in an amount not to exceed
$256,087 and approving Budget Amendment No. 20.008.(Jason Rosenberg, City Attorney)
RECOMMENDATION
It is recommended that the City Council and Successor Agency adopt a resolution authorizing the City
Manager to approve a Pollution Legal Liability policy with Beazley Group for the former landfill located
at Oyster Point in an amount not to exceed $256,087 and approving Budget Amendment No. 20.008.
BACKGROUND/DISCUSSION
The March 23,2011 Development and Disposition Agreement (DDA)between the City of South San
Francisco,the former Redevelopment Agency and Kilroy Realty TRS,Inc.includes provisions that require the
developer to replace the clay cap on the city landfill located at Oyster Point.The developer secured a
Contractor’s Pollution Liability policy for the project,which covers a 10-year period after the clay cap repair
has been completed.However,the policy only covers the completed work product/operations,and excludes
claims resulting from pre-existing pollution conditions.
As such,staff worked with Alliant Insurance,the City’s insurance broker,to identify insurance carriers that
would provide the City and the South San Francisco Successor Agency (Agency)with a pollution legal liability
policy to cover third-party claims against the City or Agency for existing landfill conditions.Alliant transmitted
the City’s policy parameters to the following carriers that specialize in pollution liability policies:
·Aspen
·Great American
·Ironshore (a Liberty Mutual Company)
·XL/Catlin
·Philadelphia (Tokio Marine)
·Beazley (a Lloyd’s of London Syndicate)
Of the carriers that were solicited,the City/Agency received quotes from Beazley and Ironshore.A comparison
of the carriers’quotes is included in Attachment 1.The other carriers declined to submit a quote as they were
not interested in redevelopment projects involving closed landfills.
After discussion and review by staff and the City Attorney’s Office,staff identified Beazley as the preferred
carrier,as their quote and coverage most closely met with the City’s principal policy parameters.Beazley is a
syndicate of Lloyd’s of London,was established in 1986,managed $2.7 billion in gross premiums in 2016,has
an A.M. Best rating of A/XV, and has $2 billion in reserves.
A copy of the proposed insurance policy and relevant endorsements are included as attachments 1 and 2 to this
staff report.The policy covers the City and the Agency for claims related to pollution liabilities associated with
Phases IC and IIC as agreed upon within the Kilroy Realty TRS,Inc.DDA that are not otherwise excluded
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File #:18-698 Agenda Date:7/10/2019
Version:1 Item #:1.
Phases IC and IIC as agreed upon within the Kilroy Realty TRS,Inc.DDA that are not otherwise excluded
under Section VI of the policy or under the Landfill and Development Cost Exclusion,included in Attachment
2.Generally,the Section VI exclusions exclude:contractual obligations,property damage to City property,
new pollution on divested property,and material changes in use.Generally,the Landfill and Development Cost
Exclusion excludes cleanup costs and claims expenses related to and/or associated with:
·Landfill material
·Operation and maintenance of control costs
·Groundwater and surface water monitoring costs
·Closure plan or post-closure plan costs
·Dewatering
·Demolition costs
·Vapor mitigation
The exclusions in the policy are designed to exclude from coverage on-going,routine obligations that the
City/Agency is undertaking to maintain the cap on the former landfill on City-owned property.The proposed
policy covers:Clean-up Costs (except those itemized above),Damages and property damage to non-City property,and
Claims Expenses (i.e.,attorney’s and other fees)that the City is obligated to pay as a result of a claim or new
discovery during the policy period.Coverage includes coverage for certain types of underground storage tanks,
including USTs that are newly discovered after the policy commences.
The quotation for the policy itemizes the following coverage for clean-up as well as for bodily injury/property
damage (BI/PD):
Coverage Coverage Provided
§I.A.1 - New Pollution Conditions - Claims for Clean-up and BI/PD Yes
§I.A.2 - New Pollution Conditions - 1st Party Discovery Yes
§I.B.1 - Existing Pollution Claims for Clean-up and BI/PD Yes
§I.B.2 - Existing Pollution- 1st Party Discovery No
As reflected above,the policy will not cover the City or Agency’s (1st Party’s)discovery of existing pollution
because the City/Agency is undertaking those responsibilities for the former landfill.The policy will cover a
claim from a third party,such as the developer,for clean-up outside the City-owned parcels connected with
Phases IC and IIC .The policy also will cover claims related to new pollution conditions as well as property
damage and bodily injury claims that a third-party,such as the developer,incurs.Property damage is only
covered for property owned, operated, and controlled by third parties.
To secure the policy, Alliant has asked the City to provide an amended application that defines the City-owned
parcels connected with Phases IC and IIC and the anticipated use of the parcels.
FISCAL IMPACT
The cost of the proposed pollution legal liability policy of $256,087 from Beazley includes the policy premium
of $248,146 and Surplus Lines Taxes/Fees of 3.2 percent,or $7,941.The policy would cover a 10-year claims
filing term,have a coverage amount of $10 million for each pollution condition,and have a $100,000
deductible.
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File #:18-698 Agenda Date:7/10/2019
Version:1 Item #:1.
The Fourth Amendment of the Franchise Agreement between the City of South San Francisco and the South
San Francisco Scavenger Company (Scavenger)in 2013 added Section 4.3,which provides a Source Reduction
and Recycling Element (SRRE)franchise fee that the City may use for “purposes related to,but not limited to,
landfill monitoring,landfill remediation and/or reducing the City’s stream of solid waste within the City of
South San Francisco”.The SRRE fees are accounted for in the City’s Solid Waste Fund.Based on the language
contained in the Scavenger Franchise Agreement,the pollution liability policy premium would be an
appropriate use of the equity within the City’s Solid Waste Fund.
Budget Amendment No.20.008 appropriates $256,087 in funds from the Solid Waste Fund.The Fiscal Year
(FY)2018-19 projected year-end unassigned fund balance,which is equity that is available for various City
Council actions,including being assigned,committed,or appropriated,is $310,739.The FY 2019-20 Adopted
Budget is anticipated to result in a net surplus of $48,330.As such,with City Council approval of Budget
Amendment No. 20.008, the FY 2019-20 projected year-end unassigned fund balance is $102,982.
CONCLUSION
The proposed pollution liability policy serves to mitigate the risks associated with the Oyster Point landfill
specified in Phases IC,ID,and IIC of the Kilroy Realty TRS,Inc.DDA.Staff recommends City Council and
Successor Agency approval.
Attachments:
1.Beazley Eclipse Insurance Policy
2.Eclipse Quote - Landfill and Development Exclusions
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BEAZLEY ECLIPSE
ENVIRO COVERED LOCATION INSURANCE POLICY (SITE ENVIRONMENTAL )
NOTICE: This Policy provides coverage on a Discovery and/or Claims Made and Reported
Basis and the payment of Claims Expenses reduces the applicable Limits of Liability . Pleas e
review the coverage afforded under this Insurance Policy (hereinafter referred to as the “Policy”
or “Insurance”) carefully and discuss the coverage hereunder with your insurance agent or
broker.
In consideration of the payment of the premium and relianc e upon the statements in the
Application , which is deemed a part of this Insurance Policy and subj ect to the Limit of Liability,
Deductible, Exclusions, conditions and other terms of this Insurance, the Underwriters agree
with the First Named Insured as follows:
I. INSURING CLAUSE
THE FOLLOWING COVERAGES ARE IN EFFECT ONLY IF INDICATED WITH A
“YES” IN ITEM 13. OF THE DECLARATIONS.
A. Covered Location Pollution Liability Coverage - New Pollution Conditions
To pay on behalf of the Insured:
1. Cleanup Costs , Damages and Claims Expenses , in excess of the
Deductible, which the Insured shall become legally obligated to pay
because of a Claim for a Pollution Condition first made against the
Insured and reported in writing to the Underwriters during the Policy
Period ; or within th e Extended Reporting Period, if applicable ; and/or
2. Cleanup Costs , in excess of the Deductible, because of a Pollution
Condition first discovered by the Insured and reported in writing to the
Underwriters during the Policy Period ; or within the Extended Reporting
Period, if applicable;
provided that, such Pollution Condition :
a. first commenced on or after the Inception Date stated in Item 2. of the
Declarations and before the end of the Policy Period ; and
b. is on, at, under or migrate d from a Covered Location.
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B. Covered Location Pollution Liability Coverage - Existing Pollution
Conditions
To pay on behalf of the Insured:
1. Cleanup Costs , Damages and Claims Expenses , in excess of the
Deductible which the Insured shall become legally obligated to pay
because of a Claim for a Pollution Condition first made against the
Insured and reported in writing to the Underwriters during the Policy
Period ; or within the Extended Reporting Period, if applicable ; and/or
2. Cleanup Costs , in excess of the De ductible, because of a Pollution
Condition first discovered by the Insured and reported in writing to the
Underwriters during the Policy Period ; or within the Extended Reporting
Period, if applicable ;
provided that, such Pollution Condition :
a. first co mmenced on or after the Retroactive Date , if any, set forth
in Item 6.(a) of the Declarations and before the Inception Date
stated in Item 2. of the Declarations; an d
b. is on, at, under or migrated from a Covered Location.
C. Transportation Pollution Liability Coverage
To pay on behalf of the Insured:
Cleanup Costs, Damages and Claims Expenses , in excess of the Deductible,
which the Insured shall become legally obligated to pay because of a Claim for
a Pollution Condition first made against the Insured and reported in writing to
the Underwriters during the Policy Period , or within the Extended Reporting
Period, if applicable, wholly occurring during and resulting solely from
Transportation; provided that such Pollution Condition first commence d on or
after the Retroactive Date set forth in Item 6.(b) of the Declarations and before
the end of the Policy Period .
This Insuring Clause shall not be utilized to evidence financial responsibility of
any Insured under any federal, state, provincial or local law.
D. Non-Owned Location Pollution Liability Coverage
To pay on behalf of the Insured:
Cleanup Costs, Damages and Claims Expenses , in excess of the Deductible,
which the Insured shall become legally obligated to pay because of a Claim for a
Pollution Condition first made against the Insured and reported in writing to the
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Underwriters during the Policy Period , or within the Extended Reporting Period ,
if applicable, provided that such Pollution Condition:
1. first commenced on or after the Retroactive Date stated in Item 6.(c). of
the Declarations and before the end of the Policy Period ; and
2. is on, at, under or migrated from a Non-Owned Location.
E. Crisis and Reputation Management Expenses Coverage
To pay the Named Insured Crisis Management Expenses and/or Reputation
Management Expenses in excess of the Deductible because of a Pollution
Condition that is on, at, under or migrat ed from a Covered Location that:
1. is the subject of material adverse regional or national news media
coverage for the Name d Insured ;
2. results in Cleanup Costs and/or Damages for a Pollution Condition
that is reported to the Underwriters and cover ed under Insuring Clause
I.A or I.B of the Policy; and
3. the Crisis Management Expenses and/or Reputation Management
Expen ses are reported, in writing, to the Underwriters during the Policy
Period and within seventy-two (72) hours after the Named Insured
incurs or assumes Reputation Management Expenses and/or Crisis
Management Expenses during the Policy Period.
In the event that Crisis Management Expenses and/or Reputation
Management Expenses are caused by a Pollution Condition and some other
cause(s), the Underwriters shall only provide coverage for that portion of Crisis
Management Expenses and/or Reputation Management Expe nses caused
solely by the Pollution Condition.
F. Business Interruption Costs Coverage
To pay the Named Insured Business Interruption Costs caused directly by a
Pollution Condition on, at or under a Covered Location, provided that:
1. such Pollution Condition results in Cleanup Costs cover ed under
Insuring Clause I.A or I.B of this Policy; and
2. the Business Interruption Costs are reported, in writing, to the
Underwriters during the Policy Period .
In the event that Business Interruption Costs are caused by a Pollution
Condition and some other cause(s), the Underwriters shall only provide
coverage for that portion of Business Interruption Costs caused solely by the
Pollution Condition .
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II. SUPPLEMENTARY PAYMENTS
Supplementary Payments made under this Cla use are not subject to the Deductible set
forth in Item 4. of the Declarations and are payable by the Underwriters in addition to the
Limits of Liability as set forth in Clause VII.
Defendants Reimbursement
Upon the Underwriters’ request, the Insured shall attend mediation meetings, arbitration
proceedings, hearings, depositions and trials relative to the defense of a Claim.
Beginning on the fourth day of attendance , the Underwriters shall reimburse the
Insured , upon written request, for actual loss of earnings and reasonable expenses that
result from such attendance. The maximum aggregate amount that the Underwriters
shall reimburse is $500 total per day for all Insureds, subject to a maximum aggregate
amount of $10,000 for each Claim.
III. DEFINITIONS
Wherever used in this Policy in bold face type, the following definitions shall apply.
A. “Application” means all signed applications, including all attachments and other
materials submitted therewith or incorporated therein, and any other such
documents submitted prior to the date the Policy, or as applicable, a post binding
Covered Location, was bound, in connection with the underwriting of this Policy,
including any endorsement or other part thereof, or any other policy issued by the
Underwriters, of which this Policy is a renewal, replacement or which it succeeds
in time.
B. “Bodily Injury” means physical injury, sickness or disease, including death
resulting therefrom, and any accompanying mental anguish, emotional distress
or shock sustained by an y person.
C. “Business Interruption Costs ” means the sum of the following:
1. the Named Insured’s net income, which is calculated as net profit, if any, that
would have been earned before taxes (or if there is a net loss before taxes,
the net loss is dedu cted);
2. the Named Insured ’s continuing normal operating expenses incurred
excluding payroll not deducted in 1. above;
3. Extra Expense ; and
4. Rental Value
due to the reasonable and necessary suspension of the Named Insured ’s
business operations dur ing the Period of Restoration at a Covered Location .
These sums will be reduced to the extent that the Named Insured can resume
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business operations, in whole or in part, at the Covered Location, or by making
use of other location(s).
Business Interruptio n Costs shall not include any costs associated with : 1)
costs incurred as a result of unfavorable business conditions , 2) loss of market or
any other consequential loss , 3) costs associated with crisis management or
reputational damage, 4) revoked or modified licenses, permits or, similar types of
authorizations from a governmental agency , 5) legal costs or legal expenses , or
6) any costs associated with preventing any Pollution Condition .
D. “Cargo ” means waste, materials, goods or products transported b y automobile,
aircraft, watercraft or rolling stock for delivery by a Named Insured , or a third
party carrier on the Named Insured’s behalf, provided that the Named Insured
or third party carrier is properly licensed to transport such waste, materials,
goods or products.
E. “Claim” means:
1. a written demand received by an Insured for money or services or
alleging liability or responsibility , including , but not limited to, the service of
suit or institution of arbitration proceedings; or
2. a court or gove rnment agency order or government or regulatory action
filed against the Insured .
F. “Claims Expenses ” means:
1. reasonable and necessary fees charged by an attorney designated or
consented to by the Underwriters, such consent not to be unreasonably
wi thheld or delayed;
2. all other fees, costs and expenses resulting from the investigation,
adjustment, defense and appeal of a Claim arising in connection
therewith, if incurred by the Underwriters, or by the Insured with the prior
written consent of the Underwriters, such consent not to be unreasonably
withheld or delayed; and
3. premiums for appeal bonds for judgments or bonds to release property
used to secure a legal obligation, if required for a Claim against any
Insured for a Pollution Condition to which this Insurance applies,
provided, however, that the Underwriters shall have no obligation to
appeal the underlying judgment or to obtain such bonds.
Except as set forth in Clause II., Claims Expenses do not include any goods
supplied or services pe rformed by the staff or salaried employees of the Insured
in connection with the investigation, adjustment, defense or appeal of a Claim
noticed under this Insurance or in connection with the investigation or
remediation of a Pollution Condition.
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G. “Cleanup Costs” means:
1. reasonable and necessary costs, charges and expenses incurred (if by an
Insured , then only with the prior written consent of the Underwriters , such
consent not to be unreasonably withheld or delayed ) in the investigation,
assessment, removal, disposal, containment, treatment, remediation
(including the associated testing and monitoring) or neutralization of a
Pollution Condition , to the extent required by Environmental Laws ,
required by a Licensed Site Professional or required to satisfy the
Insured’s obligations under a federal or state voluntary cleanup program , or
with respect to Microbial Matter , methamphetamines or other chemicals
associated with methamphetamine laboratories, and legionella pneumophilia,
reasonable and necessary costs , charges and expenses required by Indoor
Air Quality Clean -Up Standards;
2. payments for civil fines, civil penalties, punitive damages, exemplary
damages or any damages which are a multipl e of compensatory damages , to
the extent insurable by law, but only in connection with a Claim for Cleanup
Costs covered under subparagraph 1. above;
3. reasonable and necessary fees charged by an attorney designated or
consented to by the Underwriters, such consent not to be unreasonably
withheld or delayed , incurred in con nection with any such Cleanup Costs;
4. reasonable and necessary Restoration Costs ; and
5. reasonable and necessary expenses incurred to respond to an imminent and
substantial endangerment to the public health or welfare or to the
environment because of a Pollution Condition ; provided that, the Named
Insured shall forward written notice to the Underwriters of any action taken
and expense incurred pursuant to this section as soon as practicable, but in
no event later than seventy -two (72) hours after any such Cleanup Costs
have been incurred or assumed.
H. “Covered Location ” means any location specified in Item 9. of the Declarations
or in a Covered Location Endorsement attached to this Policy.
I. “Crisis Management Expenses ” means the following reasonable fee s, costs,
charges and expenses of a qualified and licensed crisis management firm
incurred by the Named Insured during a Period of Crisis for:
1. medical expenses;
2. funeral expenses;
3. psychological counseling;
4. travel expenses;
5. temporary living expenses; and
6. security expenses;
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Crisis Management Expenses do not include Reputation Management
Expenses, Damages, Cleanup Costs, Business Interruption Costs or any
Claims Expenses.
J. “Damages ” means a monetary judgment, award or settlement of compensatory
damages, including any pre -judgment and/or post -judgment interest thereon,
incurred for Property Damage and/or Bodily Injury, including any required
medical monitoring when accompanied by such Bodily Injury.
The term Damages shall not include or mean:
1. taxes or loss of tax benefits;
2. criminal fines, sanctions or criminal penalties assessed against the
Insured ;
3. civil fines, civil penalties punitive damages, exemplary damages or any
damages which are a multiple of compensatory damages assessed
against the Insured , unless insurable by law and assessed in connection
with a Claim for Property Damage and/or Bodily Injury;
4. liquidated damages ;
5. any amounts for which the Insured is not liable, or for which there is no
legal recourse against the Insured;
6. matters deemed uninsurable under the law pursuant to which this Policy
is construed ; or
7. goods supplied or services performed by the staff or salaried employees
of the Insured in connection with the investigation, adjustment, defense
or appeal of any Claim noticed under this Insurance or in connection with
the investigation or remediation of a Pollution Condition , without the
prior written consent of the Underwriters and in accordance with Clause
II.
K. “Engineering Controls” means physical modifications to a Covered Location to
reduce or eliminate the potential for exposure to Pollution Conditions.
L. “Environmental Laws ” means any federal, state, provincial or local laws,
including but not limited to statutes, rules, regulations, ordinances, gu idance
documents, and governmental, judicial or administrative orders and directives
that are applicable to Pollution Conditions to which this Insurance applies.
M. “Extra Expense ” means the reasonable and necessary expenses incurred by the
Named Insured , over and above the Named Insured ’s continuing normal
operating expenses, during the Period of Restoration, that the Named Insured
would not have incurred had there been no suspension of business operations,
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provided that the expenses are incurred to avoid or minimize the suspension of
business and to continue business operations:
1. at the Covered Location, or
2. at replacement or temporary location(s), including:
i. relocation expenses; and
ii. cost to equip and operate the replacement or temporary locati on(s).
Extra Expense shall be reduced by any salvage value of property obtained for
temporary use during the Period of Restoration that remains after resumption of
normal business operations. Extra Expense shall not include any amounts
associated with: 1) costs, fees or expenses incurred as a result of unfavorable
business conditions, 2) loss of market or any other consequential loss , 3) crisis
management or reputational damage, 4) revoked or modified licenses, permits or,
similar types of authorizations from a governmental agency , 5) legal and
accounting costs, fees or expenses, including but not limited to any such amounts
incurred in connection with defending or pursuing any litigation or in preparation
for any litigation , 6) interest, including but not limited to the interest on money
borrowed to finance any construction; 7) taxes, including but not limited to realty
taxes and other, similar assessments; 8) advertising and promotional costs, fees
or expenses; and 9) commissions and any other costs, fees or expenses resulting
from the renegotiation of leases; 10) costs arising from any delay, lost
opportunity, or additional over head incurred by the contractor, 11) architect,
engineering, design and cons ultant costs, fees and expenses and/or 12)
preventing any Pollution Condition . Subject to the terms and conditions of this
Policy, the Underwriters will pay no more for Extra Expense than the percentage
shown below multiplied by the Limit of Liability stated in Item 3(a) of the
Declarations. If the Period of Restoration is:
1. 30 days or less, the percentage applied to the Limit of Liability shall be
40%.
2. 31-60 days, the percentage applied to the Limit of Liability shall be 80%.
3. 61 days or more, the percentage applied to the Limit of Liability shall be
100%.
N. “First Named Insured ” means the person or entity specified in Item 1. of the
Declarations.
O. “Indoor Air Quality Clean-Up Standards ” means standards for the investigation
and remediation of Microbial Matter , methamphetamines or other chemic als
associated with methamphetamine laboratories, and legionella pneumophilia ,
imposed by a federal, state, local or provincial governmental authority pursuant to
a law or regulation governing the investigation and remediation of Microbial
Matter , methamph etamines or other chemicals associated with
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methamphetamine laboratories and/or legionella pneumophilia . If no standards
have been imposed by such authority, then the standards for investigation and
remediation shall be those necessary to protect human hea lth at the Covered
Location which shall be determined as follows:
1. With respect to Microbial Matter , methamphetamines or other chemicals
associated with methamphetamine laboratories, by a Certified Industrial
Hygienist, or similarly qualified health and sa fety professional, retained with
the prior written consent of the Underwriters and experienced in performing
investigation and remediation of Microbial Matter , methamphetamines or
other chemicals associated with methamphetamine laboratories.
2. With respect to legionella pneumophilia, to the extent require d in writing by
the Centers for Disease Control or local health department.
The applicable standards shall be those which applied to the use of the Covered
Location identified by the Insured in the statements and information contained
in the Application submitted to the Underwriters prior to the date the Policy is
bound, or prior to adding such locations as a Covered Location specified in Item
9 of the Declarations.
P. “Insured” means:
1. the Named Insured;
2. any other entity added as an additional Insured by Endorsement to the
policy;
3. a present or former director or officer , or, in the case of a limited liability
company, a member or manager of the Named Insured , but only with
respect to the performance of his or her duties as such on behalf of the
Named Insured;
4. a present or former employee of the Named Insured , but only for work done
while acting within the scope of his or her employment and related to the
conduct of the Named Insured’s business;
5. a present or former principal if the Named Insured is a sole proprietorship ,
or a partner if the Named Insured is a partnership, but only with respect to
the performance of his or her duties as such on behalf of the Named
Insured ; and
6. the estate, heirs, execut ors, administrators, assigns and legal
representatives of any Insured in the event of such Insured 's death,
incapacity, insolvency or bankruptcy, but only to the extent that such
Insured would otherwise be entitled to coverage under this Insurance.
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Q. “Institutional Controls ” means legal and administrative restrictions on the use of
or access to a Covered Location , which are designed to reduce or eliminate the
potential for exposure to Pollution Conditions .
R. “Licensed Site Professional ” means a licensed environmental scientist or
engineer that is in good standing with, and acting under the authority of federal,
state, provincial or local laws for the purpose of addressing Pollution
Conditions at a Covered Location.
S. “Material Change in Use” means any change in use or operations at a Covered
Location from the use or operations identified by the Insured:
1. in the Application submitted to the Underwriters prior to the date the
Policy was bound, or
2. prior to adding such location as a Covered Loca tion specified in Item 9.
of the Declarations
that materially increases the likelihood or severity of a Pollution Condition , or
results in the imposition of more stringent remediation standards than those
applicable to the Covered Location as of the date the Policy was bound or the
date the Covered Location was added to the Policy, whichever is later.
T. “Microbial Matter” means fungi, mold or mildew.
V. “Named Insured” means:
1. the First Named Insured ;
2. any other entity added as a n additional Named Insured by endorsement to
the policy; and
3. any corporations, partnerships, companies or other entities which, at the
Inception Date of the Policy , or for such time during the Policy Period ,
the First Named Insured has at least 50% ownership interes t, but solely
with respect to liability arising out of the ownership, operation,
maintenance or use of a Covered Location.
W. “Natural Resource Damage ” means physical injury to , or destruction of, and the
resulting loss of use and loss of value (and the cost for assessment and
replacement as a result of such injury, destruction or loss required by law to
restore the natural resources to their baseline conditions as they existed
immediately prior to the Pollution Condition ) of land, fish, wildlife, biota, air,
water, groundwater, drinking water supplies, and other such resources belonging
to, managed by, held in trust by, appertaining to, or otherwise controlled by the
United States (including the resources of the fishery conservation zone
established by th e Magnuson-Stevens Fishery Conservation and Management
Act, 16 U.S.C. 1801 et. seq.), any state, local or provincial governmen t, any
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foreign government, any Native American T ribe or if such resources are subject
to a trust restriction on alienation, any me mber of a Native American T ribe.
X. “Non-Owned Location ” means any location in the United States, its territories or
possessions, which is not managed, operated, owned or leased by any Insured
or an affiliate of any Insured and is used by an Insured :
1. for the storage, warehousing or distribution of goods or products owned
by an Insured and which originate from a Covered Location, or
2. for the treatment, storage or disposal of waste or materials generated at a
Covered Location, provided that such location:
a. is properly permitted and/or licensed by the applicable federal,
state, local or provincial authorities to accept such waste or
materials as of the date the waste or materials are treated, stored
or disposed of at such location; and
b. is not listed on a proposed or final Federal National Priorities List
and/or any state or provincial equivalent National Priority List,
Superfund or Hazardous Waste List prior to the treatment, storage
or disposal of the waste or material at such location; and
c. is not owned or operated by a bankrupt or financially insolvent
entity as of the date the waste or materials are treated, stored or
disposed of at such location.
Y. “Period of Restoration” means the period of time that begins after the
Deductible Period set forth in Item 4.(b) of the Declarations and ends with the
earliest of:
1. the date the Named Insured may reasonably resume its normal business
operations at the Covered Location;
2. the date the Named Insured should have resumed its normal business
operations at the Covered Location had it used reasonable skill, speed,
and effort to do so;
3. the date the Named Insured may reasonably resume its normal business
operations at a new location; or
4. when the number of days shown in Item 3.(e) Period of Restoratio n
Sublimit have elapsed.
The Period of Restoration does not include any delay in time caused by the
interference by a Named Insured with restoring the property or with the
resumption or continuation of business operations. The expiration date of this
Policy will not reduce the Period of Restoration , nor shall the Extended
Reporting Period extend it.
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Z. “Policy Period ” means the period of time between the Inception D ate stated in
Item 2. of the Declarations and earlier of the Expiration Date stated in Item 2. of
the Declarations, or any termination, expiration or cancellation of this Insurance ,
if applicable, and specifically excludes any Extended Reporting Period or any
prior policy period or renewal period.
AA. “Pollution Condition” means the
1. actual or alleged discharge, dispersal, release, escape, migration, seepage ,
or
illicit abandonment on or after the Inception Date shown in Item 2 . of the
Declarations, by a third party without an Insured’s consent,
of any solid, liquid, gaseous or thermal irri tant, contaminant or pollutant,
including but not limited to, smoke, vapors, soot, fumes, acids, alkalis,
chemicals, toxic or hazardous substances, waste materials, including medical
infectious and pathological waste, low-level radioactive waste and material
into or upon land or structures thereupon, the atmosphere or any
watercourse, body of water or groundwater, in concentrations or amounts in
excess of those naturally occurring or present in the environment , which
results in Bodily Injury, Property Damag e or Cleanup Costs to which this
Insurance applies; and
2. presence of legionella pneumophilia, methamphetamines or other chemicals
associated with methamphetamine laboratories , and Microbial Matter on, at
or within any structures or buildings on or at the Covered Location ;
Pollution Condition does not include any exposure to infected humans or
animals, or contact with bodily fluids or infected humans or animals.
BB. “Property Damage” means:
1. physical injury to or destruction of any tangible property, including the loss
of use thereof;
2. loss of use of tangible property that has not been physically injured or
destroyed;
3. diminished value of property owned by third parties, but only where there
is physical injury to or destruction of such tangible pr operty; or
4. Natural Resource Damage .
Property Damage does not include Cleanup Costs.
CC. “Rental Value ” means the loss of any anticipated rental income the Named
Insured would have earned during the Period of Restoration by renting all or a
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portion of the Covered Location(s) to a third party not owned by, affiliated with,
or connected in any way to any Named Insured , less any rental income the
Named Insured actually earned or could have earned during the Period of
Restoration by renting all or a portion of the Covered Location (s) or by making
use of other property. Rental Value does not apply to any loss included in
subparagraphs (1)-(3) of the definition of Business Interruption Costs.
DD. “Reputation Management Expenses” means reasonable fees, costs, charges
and expenses of, or at the direction of, a qualified public relations firm incurred by
the Named Insured during a Period of Crisis to mitigate material adverse
effects upon the Named Insured’s reputation and to maintain and/or restore
public confidence in the Named Insured , including but not limited to amounts for
advising, printing, advertising, mailing of materials, or travel by the Named
Insured’s directors, officers, employees, or agents, or the public relations firm to
the extent incurred at t he direction of the public relations firm. Reputation
Management Expenses do not include Crisis Management Expenses ,
Damages, Cleanup Costs , Business Interruption Costs or any Claim
Expense s.
EE. “Restoration Costs” means costs incurred by an Insured, in order to restore,
repair or replace real or personal property to substantially the same condition it
was in prior to being damaged during the course of investigating, assessing,
removing, disposing, containing, treating, remediating or neutralizing a cover ed
Pollution Condition . Such costs shall not exceed the actual cash value of such
real or personal property immediately prior to such damage, or include costs
associated with improvements or betterments. Actual cash value shall be
calculated by taking the cost to replace such real or personal property,
immediately prior to such damage, minus the accumulated depreciation of the
real or personal property .
FF. Period of Crisis means the period of time that begins on the date that a
Pollution Condition covered under Insuring Clause I.A. or I.B. of this Policy
results in material adverse regional or national news media coverage for the
Name d Insured and ends the earlier of the date: (1) the Underwriters, in their
sole discretion, determine that there is no reas onable basis that the Pollution
Condition has or will continue to result in material adverse regional or national
news media coverage against the Named Insured ; or (2) when the applicable
Sublimits of Liability set forth in Item 3 (d) of the Declarations ha ve been
exhausted.
GG. “Responsible Insured ” means:
1. any director, officer, principal, partner , or, in the case of a limited liability
company, member or manager of the Named Insured;
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2. any manager or supervisor of the Named Insured responsible for
envir onmental health and safety affairs, control or compliance;
3. any insurance manager or any member of the risk management or legal
department of the Named Insured; and/or
4. any manager of a Covered Location.
HH. “Transportation ” means the movement of Cargo to or from (i) a Covered
Location , and/or (ii) any location qualifying as a Non -Owned Location under
Clause III, DEFINITION X.1. only, and includes the loading and unloading of
Cargo onto or from an automobile, aircraft, watercraft or rolling stock provided
that the loading and unloading is performed by or on behalf of the Insured .
Transportation does not include Cargo that has been un loaded from the
automobile, aircraft, watercraft or rolling stock transporting it.
II. “Underground Storage Tank ” means any stationary container or vessel,
including the associated piping and ancillary equipment connected thereto, which
is:
1. ten percent (10%) or more beneath the surface of the ground;
2. constructed primarily of non -earthen materials; and
3. design ated to contain any substance.
IV. DEFENSE, SETTLEMENT AND INVESTIGATION
A. The Underwriters shall have the right and duty to defend, subject to the Limit of
Liability, exclusions and other terms and conditions of this Policy, any Claim
against the Insur ed seeking Cleanup Costs and/or Damages to which this
Insurance applies, even if any of the allegations of the Claim are groundless,
false or fraudulent.
B. The Underwriters shall have the ri ght to make any investigation they deem
necessary, including, wit hout limitation, any investigation with respect to the
Application , statements made in the Application and with respect to coverage.
C. If the Insured refuses to consent to any settlement or compromise of a Claim
recommended by the Underwriters and accept able to the claimant, the
Underwriters’ liability associated with such Claim shall not exceed the amount for
which the Claim could have been settled, less the remaining Deductible, plus the
Claims Expenses incurred up to the time of such refusal, or the ap plicable Limit
of Liability, whichever is less, and the Underwriters shall have the right to
withdraw from the further defense of the Claim by tendering control of the
defense to the Insured .
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D. The Underwriters shall not be obligated to pay any Cleanup Costs , Damages,
Claims Expenses , Business Interruption Costs , Crisis Management
Expenses or Reputation Management Expenses or to undertake or continue
defense of any suit or proceeding after the applicable Limit of Liability has been
exhausted by payment o f Cleanup Costs , Damages, Claims Expenses ,
Business Interruption Costs , Crisis Management Expenses and/or
Reputation Management Expenses .
E. If an Insured and the Underwriters jointly agree to utilize mediation as a means
to resolve a Claim made against the Insured, and if such Claim is resolved as a
direct result of the mediation , the applicable Each Pollution Condition
deductible shall be reduced by 50% subject to a maximum reduction of $5 0,000.
Mediation means a formal alternative dispute resolution pr ocess involving a
neutral third party.
V. TERRITORY
Subject to Clause III.X., this Policy applies to any Claim made and any Pollution
Condition arising anywhere in the world where permitted by applicable law.
VI. EXCLUSIONS
The coverage under this Insurance does not apply to any amounts:
A. Intentional Acts
arising out of or resulting from any actual or alleged Pollution Condition that
results from a Responsible Insured’s intentional disregard of, or wilful,
deliberate, or dishonest non -compliance with, any statute, regulation, ordinance,
administrative complaint, notice of violation, notice letter, order or instruction by
or on behalf of any governmental agency or representative.
B. Prior Knowledge
arising out of or resulting from any actu al or alleged Pollution Condition existing
prior to the Inception Date stated in Item 2. of the Declarations , or the date on
which a post binding Covered Location was added by Endorsement, if
applicable, and known by a Responsible Insured , except to the extent
specifically disclosed in the Application for this Policy or specifically disclosed in
a document listed on a Disclosed Document Endorsement scheduled to this
Policy. Any Pollution Condition disclosed and not otherwise excluded under
this Policy or by endorsement shall be deemed to have been first discovered as
of the date the Covered Location was added to this Policy.
C. Insured Versus Insured
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arising out of or resulting from a Claim made by or on behalf of any Insured
against any other person or en tity who is also an Insured . This exclusion does
not apply to:
1. any Claim involving a Named Insured and any other person or entity who is
also an Insured , in which the underlying action is initiated by a third party
who is not an Insured , such as a n action for contribution or cross claim; or
2. any Claim that arises out of an indemnification given by one Insured to
another Insured as specified in a contract approved by the Underwriters and
identified on a Schedule of Insured Contracts Endorsement attached to this
Policy.
D. Assumption of Contractual Liability of Others
arising out of or resulting from the liability of others assumed by the Insured
under any contract or agreement either oral or written, including any hold
harmless or indemnity agreements, except to the extent:
1. the Insured would have been liable in the absence of such contract or
agreement; or
2. provided under contracts approved by the Underwriters and identified on
a Schedule of Insured Contracts Endorsement attached to this Policy.
E. Asb estos / Lead
arising out of or resulting from asbestos or lead; provided, that this exclusion
does not apply to:
1. any Claim for Damages , except for Natural Resource Damages , and
Claims Expenses arising therefrom, under Insuring Clause I.A. or I.B. of
this Policy;
2. Insuring Clause I.A. or I.B. of this Policy to the extent of asbestos or lead,
or any materials containing asbestos or lead, in soil or in any surface
water or in groundwater ; or
3. Insuring Clause I.C. or I.D. of this Policy.
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F. Employers Liability and Workers Compensation
arising out of or resulting from:
1. Bodily Injury to any employee of any Insured arising out of and in the
course of:
a. employment by an Insured ; or
b. performing duties related to the conduct of an Insured’s business;
or
2. Bodily Injury to any spouse (or person living together as spouse), child,
parent, brother, sister or dependent of the employee as a consequence of
1. above; or
3. any Insured’s employment obligations, decisions, practices or policies as
an employer; or
4. any obligation for which the Insured or its insurance carrier (s) may be
liable under any workers compensation, unemployment compensation or
disability benefits law or similar law.
G. Products Liability
arising out of or resulting from any goods or products designed, manufactured,
sold, handled, distributed, installed, altered or repaired, including any container
thereof, any failure to warn, or any reliance upon a representation or warranty
made at any time with respect thereto, by (i) the Insured , (ii) others trading under
the Insured’s name; or (iii) a person or organization whose business or assets
an Insured has acquired.
This exclusion only applies to the extent the Pollution Condition took place
away from a Covered Location and after physical possession of such goods or
products has been relinquished by the Insured to others.
This exclusion shall not apply to Non -Owned Locations under subparagraph
X.1. provided that the Insured has retained uninterrupted ownership of such
goods or products, or to Insuring Clause I.C. of this Policy.
H. Property Damage to an Insured’s Property
arising out of or resulting from, any Property Damage to any property owned,
leased or operated by, or in the care, custody or control of an Insured , even if such
Property Damage is incurred to avoid or mitigate Damages , Cleanup Costs ,
Business Interruption Costs , Crisis Management Expenses or Reputation
Management Expenses , to which this Insurance applies.
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I. New Pollution Conditions at Divested Property
arising out of or resulting from a Pollution Condition on, at, under or migrating
from a Covered Location , where such Pollution Condition first commences
after such Covered Location was sold, given away or abandoned by the
Insured or condemned during the Policy Period.
J. Aircraft, Auto or Watercraft
arising out of or resulting from the ownership, operation, maintenance, use ,
loading and unloading, or entrustment to others of any aircraft, automobile or
watercraft beyond the boundaries of a Covered Location .
This exclusion shall not apply to Insuring Clause I.C. of this Policy.
K. Material Change In Use
arising out of or resulting from a Material Change In Use.
L. Failure to Maintain Institutional Controls or Engineering Controls
arising out of or resulting from:
1. the failure to monitor, maintain or enforce the Institutional Controls or
Engineering Controls for a Covered Location; or
2. costs associated with implementing, designing, installing, operating,
monitoring, maintaining or enforcing the existing Institutional Controls or
Engineering Controls in place on or before the Inception Date stated in Item
2. of the Declarations .
M. Underground Storage Tank
arising out of or resulting from the existence of any Underground Storage Tank
at a Covered Location . T his exclusion shall not apply to:
1. an Underground Storage Tank at a Covered Location that is closed,
abandoned in place or removed prior to the Inception Date stated in Item
2. of the Declarations, in accordance with all applicable federal, s tate,
local or provincial regulations in effect at the time of closure,
abandonment or removal;
2. an Underground Storage Tank identified and described in a Schedule of
Underground Storage Tank Endorsement attached to the Policy ;
3. an Underground Storage Tank at a Covered Location , the existence of
which is not known to any Responsible Insured as of the Inception D ate
stated in Item 2. of the Declarations or the date on which a post binding
Covered Location was added by Endorsement, if applicable ;
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4. a flow-through process tank, including oil/water separators and/or septic
tanks at a Covered Location ; or
5. a storage tank situated in a man-made underground area (such as a
basement, cellar, mine shaft or tunnel) at a Covered Location if the
storage tank is situated upon or above the surface of the floor .
VII. LIMIT OF LIABILITY
A. The Each Pollution Condition Limit of Liability stated in Item 3.(a) of the
Declarations is the limit of the Underwriters’ liability for all covered amounts
arising out of any single Pollution Condition, except as set forth in Paragraph F.
below.
B. The Aggregate Limit of Liability for the Policy Period stated in Item 3.(b) of the
Declarations is the Underwriters’ total Limit of Liability for all covered amounts
arising out of all Pollution Conditions covered by this Policy, except as set forth
in Paragraph F . below.
C. The Limit of Liability available to pay Damages , Cleanup Costs, Business
Interruption Costs, Crisis Management Expenses and Reputation
Management Expenses shall be reduced and may be completely exhausted by
payment of Claims Expenses . Cleanup Costs, Damages, Claims Expenses
Business Interruption Costs, Crisis Management Expenses and Reputation
Management Expenses shall be applied against the applicable Deductible.
D. Neither the inclusion of more than one Insured under this Policy, nor the making
of Claims by more than one person or entity shall increase the applicable Limit of
Liability.
E. The Crisis and Reputation Management Expenses Coverage Aggregate
Pollut ion Condition Sublimit stated in Item 3.(d) of the Declarations, if any, is
the limit of the Underwriters’ liability for all Crisis Management Expenses and/or
Reputation Management Expenses under the Policy.
The Sublimit of Liability stated in Item 3.(d) is part of, reduces and is subject to
the Limit of Liability stated in Item 3.(a) and (b) of the Declarations.
If the remaining Limit of Liability stated in Item 3.(a) and (b) is less than the
applicable Sublimit of Liability, the remaining Each Pollution Condition Limit or
Aggregate for the Policy Period Limit is the most that will be available for
payment of coverage provided under the Policy subject to the Sublimit of Liability.
F. The Limit of Liability for the Extended Reporting Period shall be par t of , and not
be in addition to , the Limit of Liability of the Underwriters for the Policy Period.
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G. The Additional Claims Expense s Limit of Liability stated in Item 3.(c) of the
Declarations, if any, is separate and in addition to the Each Pollution Con dition
Limit of Liability.
Payments of Claims Expenses by Underwriters shall first reduce the Additional
Claims Expenses Limit of Liability in Item 3.(c) of the Declarations, if applicable .
If the Additional Claims Expenses Limit of Liability is fully er oded, then any
additional payments of Claims Expenses shall reduce the applicable Each
Pollution Condition and Aggregate Limits of Liabilit y. T he Underwriter’s total
liability for all Pollution Conditions under this Policy, inclusive of Claims
Expenses, shall not exceed the sum of the aggregate limit amounts shown in in
Items 3.(b) and 3 .(c) of the Declarations.
VIII. RELATED POLLUTION CONDITIONS
A. The same, continu ous repeated or related Pollution Conditions shall be
considered a single Pollution Condition, irrespective of the number of
claimants or Insureds involved in the Claim or the number of Claims
made, subject to the Limit of Liability applicable in the Policy Period when
the first such Pollution Condition was reported to the Underwriters.
B. If an Insured:
1. first discovered a Pollution Condition during the policy period of
a policy issued by the Underwriters prior to the Inception Date
stated in Item 2. of the Declarations, and reported it to the
Underwriters in accordance with the terms of t hat prior policy;
and/or
2. reported a Claim to the Underwriters during the policy period of a
policy issued by the Underwriters prior to the Inception Date
stated in Item 2. of the Declarations, in accordance with the terms
of that prior policy,
and this Policy provides coverage on substantially the same basis as
such prior policy, then all of the same, continuous repeated or related
Pollution Conditions , and/or all Claims arising from the same,
continuous, repeated or related Pollution Conditions, shall be subject
only to the applicable Limits of Liability under the first such policy issued
by the Underwriters.
IX. DEDUCTIBLE
A. Except with respect to Insuring Clause I.F., the Deductible stated in Item 4.(a) of
the Declarations applies separately to e ach Pollution Condition and one
Deductible shall apply to all coverage under the Policy arising from the same,
continuous, repeated or related Pollution Conditions.
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The First Named Insured shall satisfy the Deductible by payment of amounts
covered by this Policy to third parties designated by the Underwriters , with
Underwriters’ prior written consent (not to be unreasonably withheld). Payments
of any amounts not covered by th is Policy or without Underwriters’ prior written
consent shall not satisfy the ap plicable Deductible. Payments made by any
Insured in satisfaction of deductible obligations under any other insurance shall
not satisfy the applicable Deductible under this Policy.
B. With respect to Insuring Clause I.F, the Deductible stated in Item 4 . (b) of the
Declarations applies separately to each Pollution Condition with respect to all
Business Interruption Costs covered under the Policy arising from the same,
continuous, repeated or related Pollution Conditions.
C. Full payment of the Deductib le is a condition precedent to the payment by the
Underwriters of any amounts under the Policy . Underwriters shall be liable only
for the amounts in excess of the Deductible , subject to the Underwriters total
liability not exceeding the applicable Limits of Liability. The Deductible amount
does not reduce the Limit of Liability .
X. NOTICE OF CLAIM AND DISCOVERY OF POLLUTION CONDITION
A. With respect to Insuring Clause s I.A.1., I.B.1., I.C. and I.D., if any Claim is made
against an Insured , the Insure d shall forward written notice as soon as
practicable to the Underwriters but in no event shall such notice be provided after
the expiration of the Policy Period or the time allowed, if applicable, under
Section XI. Notice shall be forwarded via facsimile , email or express or certified
mail to the persons identified in Item 8 .(a) of the Declarations. Such notice
should include a copy of every demand, notice, summons or other process
received by the Insured or the Insured’s representative.
B. With respect to Insuring Clauses I.A.2. and I.B.2., the Insured shall forward
written notice to the Underwriters as soon as practicable after a Responsible
Insured becomes aware of any Pollution Condition, but in no event shall such
notice be provided after the expira tion of the Policy Period or the time allowed, if
applicable, under section XI. Notice shall be forwarded via facsimile, email or
express or certified mail to the persons identified in Item 8.(a ) of the Declarations.
Notice shall include, at a minimum, information sufficient to identify the Insured ,
the Covered Location affected, the names of persons with knowledge of the
Pollution Condition , and all known and reasonably obta inable information
regarding the time, place, cause, nature of and other circumsta nces of the
Pollution Condition , and any resulting injuries or damages and remedial steps
proposed to be undertaken by the Insured.
C. With respect to Insuring Clause I.E., the Named Insured shall forward written
notice to the Underwriters of any action take n and expenses incurred as soon as
practicable, but in no event later than seventy -two (72) hours after the Named
Insured incurs or assumes Reputation Management Expenses and/or Crisis
Management Expenses. The Underwriters reserve the right in their sole
discretion after the first seventy-two (72) hours following the commencement of
F00738
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the Pollution Condition to determine (1) if the Pollution Condition has or will
result in material adverse regional or national news media coverage against the
Named Insured, or (2) the reasonable type and scope of services, and rates and
charges associated with Crisis Management Expenses and/or Reputation
Management Expenses and thereafter the Named Insured shall not incur or
assume any further or additional Crisis Management Expenses and/or
Reputation Management Expenses without the written consent of the
Underwriters.
Written notice of a Pollution Condition that gives rise to Reputation
Management Expenses and/or Crisis Management Expenses shall be
forwarded via facsimile, email or express or certified mail to the persons
identified in Item 8.(a) of the Declarations. Such notice should include:
1. a description of the Pollution Condition ;
2. the Named Insured’s basis for a good faith opinion of material adverse
regional or national news media coverage;
3. reasonably obtainable and available information regarding any Claim or
requests for Cleanup Costs; and
4. a description of any Crisis Management Expenses and/or Reputation
Management Expenses incurred or planned to b e incurred including
identification of service providers.
Any payment under Insuring Clause I.E. shall not determine or waive any of the
Underwriters’ rights or obligations or create a duty to defend any Claim or to pay
any Cleanup Costs under any other p rovision of the Policy; nor shall it waive the
Insured’s obligations to provide notice of Claim and/or discovery of Pollution
Condition under the Policy as set forth in Clause X.A or X.B. of the Policy.
D. With respect to Insuring Clause I.F., the Named Insured shall forward written
notice to the Underwriters as soon as practicable after the Named Insured
becomes aware of any Business Interruption Costs loss but in no event shall
such notice be provided after the expiration of the Policy Period. Notice sh all be
forwarded via facsimile, email or express or certified mail to the persons
identified in Item 8.(a) of the Declarations.
Notice shall include, at a minimum, information sufficient to identify the Named
Insured , the Covered Location affected, the Pollution Condition covered
under Insuring Clause I.A or I.B associated with the Business Interruption
Costs, the type and amount of Business Interruption Costs, and all known and
reasonably obtainable information regarding the time, place, cause, nature and
itemization of and other circumstances of the Business Interruption Costs.
E. A Claim or Pollution Condition shall be considered to be reported to the
Underwriters when written notice is first received by any of the recipients
identified in Item 8 .(a) of the Declarations.
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XI. EXTENDED REPORTING PERIOD
A. Automatic Extended Reporting Period
1. If this Policy is cancelled or non -renewed by the Underwriters or by the
First Named Insured, then the First Named Insured shall have the right
to an Automatic Extended Reporting Period , commencing on the last day
of the Policy Period, with respect to:
a. any Claim first made against any Insured during the Policy
Period and reported in writing to the Underwriters during the
ninety (90) day Automatic Extended Re porting Period , and
otherwise covered by this Policy;
b. any Claim first made against any Insured during the ninety (90)
day Automatic Extended Reporting Period, resulting from a
Pollution Condition first discovered and reported in writing to the
Underwriters during the Policy Period , and otherwise covered by
this Policy;
c. any Pollution Condition first discovered by any Insured during
the Policy Period and reported in writing to the Underwriters
during the Automatic Extended Reporting Period, and otherwise
covered by this Policy.
The above Automatic Extended Reporting Period shall not apply if the Policy is
canceled by the Underwriters due to fraud or non-payment of premium, or if the
Insured has purchased o ther insurance to replace the insurance provided under
this Policy.
B. Optional Extended Reporting Period
1. If this Policy is cancelled or non -renewed by the Underwriters or by the
First Named Insured , then the First Named Insured shall have the
right, upon payment of an additional premium calc ulated at that
percentage shown in Item 7 .(a) of the Declarations of the total premium
for this Policy, to an Optional Extended Reporting Period with respect to
any Claim first made against any Insured and reported during the period
of time set forth in Item 7.(b) of the Declarations following the end of the
Policy Period , but only with respect to any Pollution Condition first
discovered and reported in writing to the Underwriters during the Policy
Period, which is otherwise covered by this Policy .
2. If the Optional Extended Reporting Period is purchased, the ninety (90)
day Automatic Extended Reporting Period referred to in Clause XI.A.
above shall form par t of, and not be in addition to the Optional Extended
Reporting Period.
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3. As a condition preced ent to the right to purchase the Optional Extended
Reporting Period, the total premium for th is Policy must have been paid
and that cancelation by the Underwriters, if applicable, was not due to
fraud . The right to purchase such extension of coverage shall terminate
unless written notice together with full payment of the premium for such
extension of coverage is given to the Underwriters within sixty (60) days
after the effective date of cancellation or non -renewal. If such notice and
premium payment is no t so given to the Underwriters, there shall be no
right to purchase such extension of coverage .
4. In the event of the purchase of the Optional Extended Reporting Period ,
the entire premium for the Optional Extension Period shall be deemed
earned at its commencement.
5. The exercise of the Optional Extended Reporting Period shall not in any
way increase the Limits of Liability set forth in Item 3. of the Declarations.
6. The offer of renewal terms, conditions or premiums different from those in
effect prior to renewal shall not constitute a refusal to renew for purposes
of this Clause XI.
XII. REPRESENTATIONS
By acceptance of this Policy, all Insureds agree that the statements contained in the
Application are their agreements and representations, that such statements shall be
deemed material to the risk assumed by the Underwriters, and that this Policy is issued
in reliance upon the truth thereof.
This entire Policy shall be void if, whether before or after a Claim or Pollution
Condition is first repor ted to the Underwriters, any Insured has concealed or
misrepresented any fact or circumstance material to the granting of coverage under this
Policy.
XIII. OTHER INSURANCE
A. Except as set forth in Clause XIII.C and D. below, this Insurance is primary, and
the Underwriters’ obligations are not affected unless any other insurance is also
primary. In that case, the Underwriters will share with all such other insurance by
the method described in Clause XIII.C. below.
B. When this Insurance is excess, the Underwrite rs will pay only its share of the
amounts covered under the Policy, if any, that exceeds the total amount of such
other insurance.
C. When both this Insurance and other insurance apply to amounts covered under
the Policy on the same basis, whether primary or excess, the Underwriters shall
not be liable under this Policy for a greater proportion of any amounts covered by
this Policy than the amount resulting from the following contribution methods,
whichever is lesser:
F00738
012019 ed. Page 25 of 29
1. contribution by equal shares where eac h insurer contributes equal amounts
until it has paid its applicable limit of insurance or none of the amounts
covered by this Policy remains, whichever occurs first; or
2. contribution by limits where each insurer’s share is based on the ratio of its
applicable limit of insurance to the total applicable limits of insurance of all
insurers.
D. Solely with respect to a Pollution Condition due to Microbial Matter Legionella
pneumophila and/or methamphetamines, this insurance is excess of any other
valid and collectable insurance. The Underwriters will pay only its share of the
amounts covered by this Policy , if any, that exceeds the total amount of such
other valid and collectible insurance. Where other insurance may be available for
amounts covered by this Policy as noted above, the Insured shall promptly, upon
request, provide the Underwriters with copies of all such policies.
XIV. ASSIGNMENT
This Policy may be assigned by the First Named Insured with the prior written consent
of the Underwriters, which shall not be unreasonably withheld or delayed. Assignment of
the Policy shall not be effective until such assignment is endorsed to the Policy.
Notwithstanding the foregoing, i f an Insured shall die or be adjudged incompetent, such
insurance shall cover that Insured’s legal representative to the extent that the Insured
would be covered by this Policy.
XV. CANCELLATION
This Insurance may be cancelled by the First Named Insured by surrender of this
Policy to the Underwriters or by mailing to the Underwriters written notice stating when
thereafter cancellation shall be effective.
This Insurance may be cancelled by the Underwriters by mailing the First Named
Insured at the address set forth in Item 1. of the Declarations, a notice stating when
thereafter such ca ncellation shall be effective. The Underwriters may only cancel this
Insurance for the following reasons:
1. fraud on the part of the Named Insured in the Application; or
2. any Insured’s material failure to comply with the terms, conditions or contractual
obligations under this Policy, including the failure to pay any premium or
Deductible when due , however, the Insured shall have the ability, within the first
sixty (60) days (ten (10) days for failure to pay any premium when due) of the
ninety (90) day notice period, to cure such failure to comply with the material
terms, conditions or contractual obligations under this Policy to the satisfaction of
the Underwriters.
The time of surrender or the effective date and hour of cancellation stated in the notice
shall become the end of the Policy Period . Delivery of such written notice either by the
Named Insured or by the Underwriters shall be the equivalent of mailing. Notice of
F00738
012019 ed. Page 26 of 29
pending cancellation will be provided not less than : (a) ninety (90) days prior to the
effective date of cancellation for any Insured’s failure to comply with the terms,
conditions or contractual obligations under this Policy including failure to pay the
Deductible when due; (b) thirty (30) days prior to the effective date of cancellatio n for
fraud; or (c) ten (10) days prior to the effective date of cancellation for non -payment of
premium.
If the Underwriters cancel, subject to any minimum earned premium that may apply, the
return premium will be calculated on a pro rata basis. If the First Named Insured
cancels, subject to any minimum earned premium that may apply, the return premium
will be calculated in accordance with the customary short rate table and procedure .
XVI. ASSISTANCE AND COOPERATION OF THE INSURED
The Insured shall cooperate with the Underwriters and provide all reasonable
assistance in the investigation and defense of any Claim, Pollution Condition , the
Application , Business Interruption Cost , Crisis Management Expense , Reputation
Management Expense , and any other matte rs relating to coverage under this Policy .
The Insured shall execute or cause to be executed all papers and render all assistance
as is reasonably requested by the Underwriters and related to the defense of any Claim,
the cleanup of any Pollution Condition, Business Interruption Cost , Crisis
Management Expense and Reputation Management Expense . The Underwriters
may require that the Insured submit to examination under oath, attend hearings,
depositions and trials and assist in securing and giving evidence and obtaining the
attendance of witnesses in connection with the defense of any Claim, cleanup of
Pollution Condition , Business Interruption Cost , Crisis Management Expense and
Reputation Management Expense . In the course of investigation or defense of a ny
Claim, the Underwriters may require written statements or the Insured’s attendance at
meetings with the Underwriters.
Upon the Underwriters request, the Insured shall assist in making settlements, in the
conduct of suits and in enforcing any right of contribution or indemnity against any
person or organization who may be liable to the Insured because of any Pollution
Condition covered under this Policy.
The Insured shall not admit liability, enter into any settlement, stipulate to any judgment
or award or dispose of any Claim, or, except as provided in Clause I.E. and/or III.G.5,
make any payment, assume any obligations, incur any expense (including, but not
limited to, any Claims Expenses or Cleanup Costs), without the written consent of the
Underwriters, such consent not to be unreasonably withheld or delayed. Except as
provided for in Clause II., expenses incurred by the Insured in assisting and cooperating
with the Underwriters, as described above, do not constitute Claims Expenses and are
not reimbursable under this Policy.
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012019 ed. Page 27 of 29
XVII. ACTION AGAINST THE UNDERWRITERS
No action shall lie against the Underwriters unless the Insured shall have fully complied
with all of the terms of this Policy, nor until the amount of the Insured’s obligation to pay
shall have been fully and finally determined either by judgment against them or by
written agreement between them, the claimant and the Underwriters. Nothing contained
herein shall give any person or organization any right to join the Underwriters as a party
to any Claim against the Insured to determine their liability, nor shall the Underwriters
be impleaded by the Insureds or their legal representative in any Claim.
XVIII. SUBROGATION
In the event of any payment under this Insurance, the Underwriters shall be subrogated
to all the Insureds’ rights of recovery therefore against any person or organization, and
the Insured shall execute and deliver instruments and papers and do whatever else is
necessary to secure such rights. The Insured shall do nothing to p rejudice such rights.
Any recoveries shall be applied first to subrogation expenses, second to the Named
Insured to the extent of any payments in excess of the Limit of Liability, third to amounts
covered by this Policy and paid by the Underwriters, and f ourth to the Deductible. Any
additional amounts recovered shall be paid to the Named Insured .
XIX. ENTIRE AGREEMENT
By acceptance of this Policy, all Insureds agree that this Policy embodies all
agreements existing between them and the Underwriters relat ing to this Insurance.
Notice to any agent or knowledge possessed by any agent or by any other person shall
not effect a waiver or a change in any part of this Policy or estop the Underwriters from
asserting any right under the terms of this Policy; nor s hall the terms of this Policy be
waived or changed, except by written endorsement issued to form a part of this Policy,
signed by the Underwriters.
XX. VALUATION AND CURRENCY
All premiums, limits, deductibles, and any amounts covered by this Policy are expressed
and payable in the currency of the United States. If judgment is rendered, settlement is
denominated , or another element of Damages under this Policy is stated in a currency
other than United States dollars or if any other amounts covered by this Policy are paid
in a currency other than United States dollars, payment under this Policy shall be made
in United States dollars at the rate of exchange published in the Wall Street Journal on
the date on which a relevant final judgment becomes incapable of appeal or payment of
the settlement or other element of Damages is due or the date such other amounts
covered by this Policy are paid.
XXI. BANKRUPTCY
Bankruptcy or insolvency of the Insured shall not relieve the Underwriters of its
obligations nor deprive the Underwriters of its rights or defenses under this Policy.
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012019 ed. Page 28 of 29
XXII. AUTHORIZATION
By acceptance of this Policy, the Insureds agree that the Named Insured will act on
their behalf with respect to the giving and receiving of any notice provided for in t his
Policy, the payment of premiums and the receipt of any return premiums that may
become due under this Policy, and the agreement to and acceptance of endorsements.
XXIII. RIGHT OF ACCESS AND INSPECTION
The Named Insured agrees to provide the Underwrit ers with access to any information
developed or discovered by an Insured concerning a Claim, Pollution Condition ,
Business Interruption Costs , Crisis Management Expenses or Reputation
Management Expenses to which this Insurance applies , whether or not deemed by an
Insured to be relevant and to provide the Underwriters with access to interview any
Insured and review any documents of an Insured . Further, to the extent that an
Insured has such rights, any of the Underwriters representatives shall have the rig ht and
opportunity but not the obligation to inspect at any reasonable time, during the Policy
Period or thereafter, a Covered Location associated with a Claim, Pollution
Condition, Business Interruption Costs , Crisis Management Expenses , Reputation
Management Expenses reported to the Underwriters. Neither the Underwriters nor its
representatives shall assume any responsibility or duty to the Insured or to any other
person or entity, by reason of such right of inspection. Neither the Underwriters right to
make inspections, sample and monitor, nor the actual undertaking thereof nor any report
thereon shall constitute an undertaking on behalf of the Insured or others, to determine
or warrant that the property or operations are safe, healthful or conform to ac ceptable
engineering practices or are in compliance with any law, rule or regulation. The Named
Insured agrees to provide appropriate personnel to assist the Underwriters ’
representatives during any inspection.
XXIV. HEADINGS
The descriptions in the head ings and subheadings of this Policy are solely for
convenience, and form no part of the terms and conditions of coverage.
XXV. SERVICE OF SUIT
It is agreed that in the event of the failure of the Underwriters to pay any amount claimed
to be due under this Insurance, the Underwriters, at the request of the Insured , will
submit to the jurisdiction of any c ourt of competent jurisdiction within the United States.
Nothing in this Clause constitutes or should be understood to constitute a waiver of the
Underwriters’ rights to commence an action in any Court of competent jurisdiction in the
United States, to remove an action to a United States District Court, or to seek a transfer
of a case to another Court as permitted by the laws of the United States or of any State
in the United States. It is further agreed that service of process in such suit may be
made upon Underwriters repre sentative, designated in Item 11 . of the Declarations, and
that in any suit instituted against any one of them upon this contract, Und erwriters will
abide by the final decision of such Court or of any Appellate Court in the event of an
appeal.
F00738
012019 ed. Page 29 of 29
The Underwriters’ representative designated in Item 11 . of the Declarations is authorized
and directed to accept service of process on behalf of Underwriters in any such suit
and/or upon the request of the Insured to give a written undertaking to the Insured that
they will enter a general appearance upon Underwriters behalf in the event such a suit
shall be instituted.
Further, pursuant to any sta tute of any state, territory or district of the United States
which makes provision therefore, the Underwriters designate the Superintendent,
Commissioner or Director of Insurance or other officer specified for that purpose in the
statute, or his or her su ccessor in office, as their true and lawful attorney upon whom
may be served any lawful process in any action, suit or proceeding instituted by or on
behalf of the Insured or any beneficiary hereunder arising out of this contract of
Insurance, and hereby d esignate the Underwriters repre sentative, designated in Item 11 .
of the Declarations, as the person to whom the said officer is authorized to mail such
process or a true copy thereof.
XXVI. CHOICE OF LAW
Any disputes involving this Policy shall be resolv ed applying the law designated in Item
12. of the Declarations.
XXVII. SOLE AGENT
The First Named Insured shall act on behalf of all Insureds for all purposes, including
but not limited to the payment of Deductible amounts, payment or return of premium,
receipt and acceptance of any endorsement issued to form a part of this Policy, giving
and receiving notice of cancellation or nonrenewal and the exercise of the rights stated
in Clause XI.
XXVIII. SANCTION LIMITATIONS
No (re)insurer shall be deemed to p rovide cover and no (re)insurer shall be liable to pay
any Claim or provide any benefit hereunder to the extent that the provision of such
cover, payment of such Claim or provision of such benefit would expose that (re)insurer
to any sanction, prohibition or restriction under United Nations resolutions or the trade or
economic sanctions, law or regulations of the European Union, United Kingdom or
United States of America.
XXIX. SEVERABILITY OF INTEREST
Except with respect to the Limit of Liability, Clau se XII. and any rights and duties
assigned in this Policy to the First Named Insured , this Insurance applies as if each
Insured were the only Insured and separately to each Insured against whom a Claim
is made.
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June 3, 2019
Bill Nellen
Executive Vice President
Alliant Insurance Services, Inc.
RE: Oyster Point South
Beazley ECLIPSE
ENVIRO COVERED LOCATION INSURANCE POLICY (SITE ENVIRONMENTAL)
Covered Location Pollution Liability Quotation
Dear Bill:
In accordance with your request for a proposal and based on the information submitted, we are pleased
to offer the following Quotation of insurance for the above captioned account. Please note that the
terms and conditions outlined below are not necessarily in compliance with the specifications requested
in your submission. The Underwriters are not obligated to provide coverage not addressed in this
proposal. Coverage would be provided on a surplus lines basis and is subject to receipt, review and
written acceptance of the following information prior to binding unless noted otherwise (terms,
conditions and pricing subject to change):
CONDITIONS
1. Completed, signed and dated Beazley Application, prior to binding.
2. Signed and dated TRIA acknowledgement form, prior to policy issuance.
Please note: If we do not have record of the license required to bind this risk and receive an order to bind, license information
must be provided in order to proceed. Additional information regarding state license requirements can be found under Broker
Access / FAQ at Beazley.com or State License Requirements.
Please ensure that the Insured’s address appearing on the attached document is correct and consistent with where
premium/surplus lines taxes will be filed and paid. If taxes will be paid in a different state, please notify your Underwriter.
CARRIER
We are a specialist insurer with three decades of experience in providing clients with the highest
standards of underwriting and claims service worldwide. All our insurance businesses are rated A
(Excellent) by A.M. Best.
Insurer: Lloyd’s Syndicates 623/2623 – A.M. Best’s Rating A (Excellent), Class XV
Form: Beazley ECLIPSE F00370 022015 ed.
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Coverage Highlights (see TERMS below for actual coverage offered under this proposal):
New and Existing Pollution Conditions (BI/PD, cleanup costs, NRD and claim expenses with 1st-party discovery)
Transportation Pollution Liability (3rd-party and insured as carrier, includes coverage for in-bound/out-bound materials)
Non-Owned Disposal Site Pollution Liability (blanket locations, both onsite and offsite coverage)
Coverage for known pollution conditions disclosed in the application
Coverage for pass-through contamination migrating to and/or through a covered location from an offsite source
Defendants’ Reimbursement Extension – up to $500 per day, subject to a maximum of $10,000 per claim
Reputation Management Reimbursement – up to 50% of $100,000 (manage reputational risk after loss)
Definition of bodily injury includes mental anguish and emotional distress
Definition of damages includes medical monitoring
Definition of cleanup costs includes restoration costs and allows for participation in voluntary cleanup programs
Civil fines and penalties, punitive and exemplary damages where insurable by law
Broad definition of pollution condition (includes Legionella and microbial matter)
Definition of property damage includes diminished value and natural resource damage
Coverage for asbestos and lead-based paint in any soil, watercourse/body of water or in groundwater
Coverage for divested locations
Automatic 90-day extended reporting period (ERP) and right to purchase additional ERP
Primary coverage
90-day notice of cancellation
Option for choice of law
Pre-claims assistance
Proactive claims management through experienced professionals
Beazley 24/7 Emergency Response Hotline
TERMS
Named Insured: City of South San Francisco
Address: 400 Grand Avenue
South San Francisco, CA
Policy Period: Effective: TBD
Both dates at 12:01AM local time at the Insured’s Address
Optional ERP: Not available
Commission: 15%
Coverage Coverage
Provided Sub-Limit Separate
Deductible/SIR
I.A.1. New Pollution Conditions – (BI/PD and Cleanup) YES N/A N/A
I.A.2. New Pollution Conditions – 1st Party Discovery YES N/A N/A
I.B.1. Existing Pollution Conditions – (BI/PD and Cleanup) YES N/A N/A
I.B.2. Existing Pollution Conditions – 1st Party Discovery NO N/A N/A
I.C. Transportation YES N/A N/A
I.D. Non-Owned Disposal Site YES N/A N/A
See below for amendments to coverage outlined above, if any.
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Limit Option
Each Pollution Condition
Limit Option
Aggregate for the Policy Period
Deductible Options
Each Pollution Condition
10-Year existing,
5 years new
$10,000,000 $10,000,000 $100,000 $248,146
$10,000,000 $10,000,000 $250,000 $193,846
$10,000,000 $10,000,000 $500,000 $163,881
Acts of Terrorism Coverage (Disclosure Notice Attached Below): This optional coverage may be elected or rejected at the time
of binding. If this coverage is elected, an additional premium of 1% will be charged and an endorsement providing this
coverage will be added to the policy. If this coverage is rejected an endorsement rejecting this coverage will be added to the
policy.
Retroactive Date - I.B.: None
Retroactive Date - I.C.: None
This quotation provides coverage for the following scheduled Covered Location(s):
Address Use
Project Phases IC, ID and IIC
(legal property description to be scheduled)
South San Francisco, CA
Development on former landfill
DISCLOSED DOCUMENTS AND POLLUTION CONDITIONS
N/A
No disclosures made by Insured(s) or its agent(s).
Disclosed documents and pollution conditions outlined below:
Disclosed Documents
N/A
SPECIAL PROVISIONS / ENDORSEMENTS (subject to CONDITIONS above)
Coverage:
1. SCHEDULE2019 Lloyd’s Security Schedule
2. NMA1256 Nuclear Incident Exclusion Clause-Liability-Direct (BROAD) (U.S.A.)
3. NMA1477 Radioactive Contamination Exclusion Clause-Liability-Direct (U.S.A.)
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4. NMA2918 War and Terrorism Exclusion Endorsement
5. E06671012015 Policyholder Disclosure Notice of Terrorism Insurance Coverage
6. E06693012015 U.S. Terrorism Risk Insurance Act of 2002 as Amended, New and
Renewal Business Endorsement (if TRIA is accepted)
7. E06694012015 U.S. Terrorism Risk Insurance Act of 2002 as Amended, Not Purchased
Clause (if TRIA is rejected)
8. E05734042014 Minimum Earned Premium Endorsement
100%
9. E11774072018 Business Interruption and Extra Expense
Policy Limit
Coverages I.A. and I.B.
3 day deductible
10. E05791042014 Insured Endorsement
Scheduling Redevelopment Agency of the City of South San
Francisco
11. E05734042014 Minimum Earned Premium Endorsement
100%
12. E05781042014 Insuring Clauses - Different Policy Periods Endorsement
10 years existing and 5 years new conditions
13. E08477052016 Microbial Matter and Methamphetamines Endorsement
14. E11891082018 Microbial Matter Exclusion Prior to Certificate of Occupancy
15. MNSCPT Landfill and Development Exclusions
16. E05789042014 Specified Coverage and Contamination Exclusion
Excluding Cleanup Costs and NRD for PFOAs and related
compounds
CHOICE OF LAW
Choice of Law: New York
NOTICE
This quotation is through a surplus lines carrier on whose behalf we are authorized to act. Compliance
with applicable laws including filings and payment of taxes and fees is the responsibility of the insured,
the insurance agent or insurance broker. If coverage is bound, please advise the license number of the
producer making the filing.
This quotation is strictly conditioned upon no material change in risk occurring between the date of this
letter and the inception date of the proposed policy (including any claim or notice or circumstances
which may reasonably be expected to give rise to a claim under any policy of which the policy being
proposed by this letter is a renewal or replacement). In the event of such change of risk, the Insurer
may in its sole discretion, whether or not this offer has already been accepted by the Insured, modify
and/or withdraw this offer.
In order to complete the underwriting process, we require that you send us any additional information
requested above. We are not required to bind prior to our receipt and underwriting approval of the
above information. However, if we do bind coverage prior to such approval, the terms and conditions
as indicated above could be amended until such receipt and acceptance.
This quotation is valid for 30 days or until the Effective Date noted above, whichever is earlier. Please
be advised that if coverage is bound, premium must be remitted within 30 days of binding.
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Thank you for the opportunity.
Best Regards,
Nathaniel Martin
Specialty Lines - Environmental
Beazley Group
Lloyd's of London Syndicates 623 and 2623
Beazley Insurance Services
t: +1 (917) 344-3315
m: +1 (203) 216 9891
a: Rockefeller Center, 1270 Avenue of the Americas, 12th Floor, New York, NY 10020
e: [email protected]
w: www.beazley.com
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Effective date of this Endorsement: <Effective Date>
This Endorsement is attached to and forms a part of Policy Number: <Policy Number>
<Insurer>referred to in this endorsement as either the “Insurer” or the “Underwriters”
LANDFILL AND DEVELOPMENT EXCLUSIONS
This endorsement modifies insurance provided under the following:
BEAZLEY “ECLIPSE”
In consideration of the premium charged for the Policy, it is hereby understood and agreed that:
1. Solely with respect to any Cleanup Costs, and Claims Expenses resulting therefrom, the following are
added to Clause VI. EXCLUSIONS:
Landfill Material
arising out of or resulting from (1) any Landfill Materials or any waste material which has been intentionally
deposited on, at or under any Covered Location, and/or (2) the removal, transportation or disposal of any
material located below grade on, at or under any Covered Location. However, this exclusion shall not apply
to Cleanup Costs or Claims Expenses incurred exclusively for remediation of Pollution Conditions that
are beyond the boundaries of the Covered Location.
Operation and Maintenance (O&M) of Control Costs
arising out of or resulting from any installation, implementation, improvement, operation, maintenance,
modification, replacement, repair or upgrade of any preventive measure or pollution, institutional or
engineering controls, including but not limited to capping system, liners or leachate collection systems, that is
on, at, under or migrating from a Covered Location, regardless of cause.
Groundwater and Surface Water Monitoring Costs
arising out of or resulting from any groundwater or surface water monitoring conducted at any Covered
Location unless such monitoring is implemented, in its entirety, for the physical removal, remediation or
investigation associated with physical removal or remediation of a Pollution Condition to which this Policy
otherwise responds.
Closure Plan or Post-Closure Plan Costs
arising out of or resulting from the installation, implementation, improvement, operation, maintenance,
modification, replacement, repair, upgrade or requirements of any Closure Plan or Post-Closure Plan,
including, but not limited to, grading, capping, on-going or long-term groundwater or gas monitoring, or
leachate collection, treatment or disposal.
Dewatering
Dewatering activities, transportation or disposal of water or soil generated during dewatering activities.
However, this exclusion shall not apply to Cleanup Costs or Claims Expenses incurred exclusively for
remediation of Pollution Conditions that are beyond the boundaries of the Covered Location.
Demolition Costs
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The removal, transportation or disposal of building materials including but not limited to building pads/slabs,
foundations, piping, sumps, pits and vaults that may exist from previous structures, generated as part of
planned development or in preparation for site development, site grading, the razing or construction of any
structures all of which would not have been necessary in the absence of development or construction
activities. However, this exclusion shall not apply to Cleanup Costs or Claims Expenses incurred
exclusively for remediation of Pollution Conditions that are beyond the boundaries of the Covered
Location.
Vapor Mitigation
arising out of or resulting from the purchase installation, monitoring, operation, or maintenance of any type of
active or passive vapor mitigation system, vapor barrier, or other sub-slab depressurization system, on, at,
under, or beyond the boundaries of the Covered Location. However, this exclusion shall not apply to
Cleanup Costs or Claims Expenses incurred exclusively for remediation of Pollution Conditions that are
beyond the boundaries of the Covered Location.
2. Clause III. DEFINITIONS is amended by addition of the following:
“Closure Plan or Post-Closure Plan” means the written documents required by the Code of Federal
Regulations, 40 CFR Parts 260 – 299, including any amendments, or by similar state laws and
regulations, which require the partial or final closure or post-closure of a unit, cell, facility or location.
“Landfill Material” means any Pollution Condition, object, substance, or material, including any
associated or related breakdown products or degradation compounds or related component, that has
been deposited, disposed of, placed, or stored in any landfill cell, waste management unit, impoundment,
pond, pit sump or pile at a Covered Location.
3. The following Clause is added to the Policy:
Vapor Mitigation
By acceptance of this policy the Named Insured agrees that it is a condition precedent to any coverage
under this Policy due to or associated with indoor air quality due to or arising from the intrusion of any
vapor(s) into any structure upon a Covered Location that the Named Insured install, operate, monitor
and maintain a vapor mitigation system designed and installed pursuant to accepted industry standards.
All other terms and conditions of this Policy remain unchanged.
______________________________________
Authorized Representative
City of South San Francisco
Legislation Text
P.O. Box 711 (City Hall, 400
Grand Avenue)
South San Francisco, CA
File #:18-900 Agenda Date:7/10/2019
Version:1 Item #:1a.
Resolution authorizing the City Manager/Executive Director to approve a Pollution Legal Liability policy with
Beazley Group for the former landfill located at Oyster Point in an amount not to exceed $256,087 and
approving Budget Amendment No. 20.008.
WHEREAS,the Development and Disposition Agreement (“DDA”)between the City of South San Francisco,
the former redevelopment agency for the City of South San Francisco and Kilroy Realty TRS,Inc.includes
provisions that require the developer to replace the clay cap on the city landfill located at Oyster Point; and
WHERAS,the developer secured a Contractor’s Pollution Liability policy for the project,which covers a 10-
year period after the clay cap repair has been completed,but only covers the completed work
product/operations, and excludes claims resulting from pre-existing pollution conditions; and
WHEREAS,staff worked with Alliant Insurance,the City’s insurance broker,to seek out insurance carriers that
would provide the City with a pollution legal liability policy to cover third party claims against the City for
existing landfill conditions; and
WHEREAS, the City received quotes from Beazley and Ironshore; and
WHERAS,after discussion and review by staff and the City Attorney’s Office,staff identified Beazley as the
preferred carrier, as their quote and coverage most closely met with the City’s principal policy parameters; and
WHERAS,Beazley is a syndicate of Lloyd’s of London,was established in 1986,managed $2.7 billion in gross
premiums in 2016, has an A.M. Best rating of A/XV, and has $2 billion in reserves; and
WHEREAS,a copy of the proposed insurance policy and relevant endorsements are attached to the associated
staff report; and
WHERAS,the policy covers the City and the Successor Agency to the former Redevelopment Agency for
claims related to pollution liabilities associated with Phases IC,ID,and IIC as agreed upon within the Kilroy
Realty TRS, Inc. DDA that are not otherwise excluded by the Landfill and Development Cost Exclusion; and
WHEREAS,the cost of the proposed pollution legal liability policy of $256,087 from Beazley includes the
policy premium of $248,146 and Surplus Lines Taxes/Fees of 3.2 percent,or $7,941 and the policy would cover
a 10 year claims filing term,have a coverage amount of $10 million for each pollution condition,and have a
$100,000 deductible; and
WHEREAS,based on the Fourth Amendment of the Franchise Agreement between the City of South San
Francisco and the South San Francisco Scavenger Company (Scavenger)in 2013 added Section 4.3,which
provides a Source Reduction and Recycling Element (SRRE)franchise fee,the pollution liability policy
premium would be an appropriate use of the equity within the City’s Solid Waste Fund; and
WHEREAS,Budget Amendment No.19.005 appropriates $256,087 in funds from the Solid Waste FundCity of South San Francisco Printed on 7/11/2019Page 1 of 2
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File #:18-900 Agenda Date:7/10/2019
Version:1 Item #:1a.
WHEREAS,Budget Amendment No.19.005 appropriates $256,087 in funds from the Solid Waste Fund
resulting a projected Fiscal Year 2018-19 year-end remaining balance of $145,432.
NOW,THEREFORE,BE IT RESOLVED that the City Council of the City of South San Francisco and the
South San Francisco Successor Agency to the former Redevelopment Agency does hereby:
1.Authorize the City Manager and Executive Director to purchase a Pollution Legal Liability policy with
Beazley Group for the former landfill located at Oyster Point in an amount not to exceed $256,087; and
2.Approve Budget Amendment No. 20.008.
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City of South San Francisco Printed on 7/11/2019Page 2 of 2
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