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Home My WebLink AboutRural Electric Rural Electric Utilities MARSH Underwriting Managers" RURAL • a ELECTRIC UTILITY PROGRAM Truckee Donner Public Utility District Renewal 2003-2004 12/1/02 Ed. • 1 • 0 r Rural Electric Utilities Underwriting Managers, St. Paul Fire and Marine Insurance Company and Hartford Steam Boiler Inspection and Insurance Company, and Virginia Surety have joined together to provide a comprehensive property and casualty insurance program specifically de- signed for the Rural Electric Cooperatives. We're committed to servicing the needs of the Rural Electric Cooperatives now and into the fu- ture. Our combined years of experience have given us the technical expertise to design a com- plete insurance program to include an effective loss control program and a knowledgeable claims department. Rural Electric Utilities Underwriting Managers and its affiliated agents have been associated with the Rural Electric Cooperatives for over twenty years. During this time we have pioneered many program improvements that have provided enhanced protection for the rural electric utili- ties from their unique risks. Each representative broker is knowledgeable in program design and coverage, service-oriented, and dedicated to meeting the specific needs of cooperatives across the country. Our claims adjusters take a reasonable, common-sense approach to the resolution of claims and we base our claim decisions on timely and factual information. Our approach to claims handling encompasses the best use of our people, our technology and our experience. We guarantee that all claims will be handled fairly. The Loss Control and Risk Management staff are loss control specialists that help you control and prevent loss exposures. These designated and certified safety professionals have the training and experience to work specifically with rural electric utilities. CHARTER PLA�'I1' VAI POISED €?I THEFUTURE MEMBERS OF THE 1V R ECA I As your industry changes through deregulation, As part of our long-term commitment to serving € you can rely on us to help you through the tran- the Rural Utilities, the St. Paul and Rural Elec- sition. Rural Electric Utilities Underwriting tric Utilities Underwriting Managers are proud Managers and St. Paul Fire and Marine Insur- to be Charter Platinum Associate Members of ance Company are experienced in handling the the NRECA. In addition, we receive first-hand insurance coverage's for diverse industries that information on important business trends — j 1 have undergone significant transformations. We particularly as they relate to changes in will stand by our Rural Utility customers and j insurance exposures, coverage's, and costs. s. provide you with the assistance that you need to l meet any challenges the future holds. i i The quality provided by The Rural Electric Utility Program is made possible by the teamwork of three outstanding companies. April 16,2003 iCOMMERCIAL PACKAGE POLICY PROPERTY COVERED PROPFR Y U.Nii IS of LIABILITY Real&Personal Property, Substations, Mobile Substations $15,515,?66 Contractors Equipment(insured to value) $1,042,805 Computer Equipment-Hardware, Media&Extra Expense $1,257,910 Tanks—Excluding Contents $4,250.000 Wells $2,250,000 Water Facility Equipment $2,370,000 Motor Cargo $25,000 Miscellaneous Tool Floater $49,540 Snosvinobiles $T,9.18 Extra Expense $1,000,000 Perils Insured: Against Risks of Direct Physical Loss or Damage(Excluding Flood and Earthquake)subject to the Policy Terms, Conditions and Exclusions Coinsurance: Waived—(100%Insurance Values applicable) Valuation: Replacement Cost except Contractors Equipment that is older than five (5)years, actual cash value will apply. Deductible: $5t000 per occurrence. A. ADDITIONAL POLICY BENEFITS COVERAGE LIN11T PRovII)rD Newly Acquired Buildings.................................................................................... $ 1,000,000 Newly Acquired Personal Property.......---—..................................................... $ 500,000 PropertyIn Transit.....—.......................................................................................... $ 500,000 Builders Risk/Course of Construction................................................................... $ 500,000 (must be reported within 6 months of construction) Property Away From Premises...................----...................................—.............. $ 250,000 Blanket Earnings And Extra Expense............................—.................................-- $ 100,000 Accounts Receivable Coverage..................................—.......................................... $ 100,000 Valuable Papers Coverage.....----.................................... —................................. $ 100,000 Building Codes Coverage........................................................................................ $ 100,000 Computer Coverage;Hardware And Media (If Not Scheduled Above).................. $ 50,000 (Includes any office files/documents converted to CD ROM) Contractors Equipment—Rented or Leased(short term/3 months or less).......... $ 50,000 Computer Equipment—Used in the field(owned, rented or leased)..................... $ 50,000 Pollution Clean Up And Removal(due to a covered loss at your location) ........... $ 25,000 Water Damage Due To Back—Up, Sewers And Drains........................................... $ 25,000 Fire Department Service Charge................................--................................_..... $ 25,000 FineArts Coverage.....................—........—.............................................................. $ 25,000 Tools owned by Employees(Any one tool$500/$5,000 any one loss).................. $ 5,000 Ba BLANKET CRIME Blanket Employee Dishonesty * $500,000 Forgery or Alteration Protection $500,000 Money and Securities Protection Loss Inside Your Building $500,000 Loss Outside Your Building $500,000 Computer Fraud Protection $500,000 Depositor's Forgery Protection $500,000 * Coverage extends to collection agents. April 16, 2003 BOILER MACHINERY a ELECTRICAL APPARATUS AS.S71MF"TION CL AUSE MECHANICAL RREAKDfJ6T N CLOvr ze )P€ OPFRT V Liam Scheduled Locations and Substations Co- $ 4,750,000 Generation Facilities Excluded Perils Insured. Provides sudden and accidental breakdown coverage to scheduled properties. Comprehensive Coverage: Including transformers, switchgear and electrical distribution equip- ment, as well as emergency generators,pumps, motors, boilers and air conditioning equipment Sublimits: Expediting Expenses: $ 100,000 per accident Extra Expense: $ 50,000 per accident Pollution Clean up&Ammonia Contamination: $ 100,000 per accident Spoilage: $ 100,000 peraccident Water Damage: COVERED UNDER PROPERTY SECTION Newly Acquired Locations: $ 100,000 Business Income: NOT COVERED Deductible: Your rledurtibl£e ,,hown in the Prope tr Protection Cover g Surazmu*r applieuble to property damage, business income or blanket earnb,gs and expense applies t:i less under Equipment Breakdown Coverage unlc ss a speeafe deductible is shown below: Combiyieal All Cm,era es S i.>00 Except Transformers S 2.50 pe Kva S 10,000 Minimum Exeepi IC EIGenerator Guts S 30,00 per llor vepower S 10,000 Minimum Except I leerrical Substation Locations S i0,000 Other Conditions: Replacement Cost Except loss or damage to Electrical Transformers=>25 years old and which have not been rewound will be valued ACV. Engineering Services- The following engineering services are available: Transfm•tner Oil Gas AnaIrsis(TOGA)for both oil screen lxrfrared Thermograph Surveys of main transformers testing and dissolved gas analysis tests of selected oil cooled I and electrical distribution equipment at selected substa- transformers 2,500 KVA and larger. The appropriate sub- : tions. Facilities selected will be determined in coopera- stations will be selected with the cooperation of the insured. tion with the insured. Information describing these tests 3. Information describing these tests and their benefits will be and their benefits may be supplied upon request. 3 supplied upon request. Available on a per at bands All engineering services are performed by Hartford Steam Boiler Inspection and Insurance Company without additional cost. Please contact your REUprogram representative for more information regarding these services or to request an inspection. Electrical equipment inspection services-Electrical equipment requires expert inspection to ensure smooth operation. The services and underwriting for this aspect of the Rural Electric Program are provided by Hartford Steam Boiler— the world's premier inspector and insurer of industrial machinery and electrical equipment.As part of the REU Program /St.Paul team,HSB utilizes its experienced engineering and loss control services to help ensure your substations operate safely. Should a loss occur, we are committed to helping you get your system back up as soon as possible. Through HSB's National Supplier Referral Service, we can recommend reliable, qualified firms that can supply and install any electrical equipment you may need April 16, 2003 _. I COVERAGECOMMERCIAL GENERAL LIABILITY COMPREtIFNSivE 'GFNE AL LIABILITY LimIT oFLIABILITY Bodily Injury, Property Damage' $ 2,000,000 per occurrence $ 6,000,000 annual aggregate Personal Injury $ 2,000,000 per occurrence Advertising Injury $ 2,000,000 per occurrence Products and Completed Work $ 2,000,000 per occurrence $ 2,000,000 annual aggregate Fire Legal Liability $ 500,000 per occurrence Premises Medical Payments $ 10,000 per accident Fire Suppression $ 1,000,000 per occurrence Pesticide or Herbicide Application $ 2,000,000 per occurrence Failure to Supply(when loss results from accidental $ 2,000,000 per occurrence loss to tangible property owned/used by the Insured). Weatherization Errors & Omissions Liability $ 2,000,000 per wrongful act $ 2,000,000 annual aggregate Livestock Injury Coverage $ 5,000 per animal $ 20,000 max.per occurrence Employee Benefits Liability- $1,000 Ded. $ 2,000,000 per wrongful act $ 2,000,000 annual aggregate Fire Suppression in accordance with the Federal Land Policy and Management Act of 1976 �> Blanket Contractual 3° Failure to Supply when loss results from accidental damage to utility generating or distribut- ing equipment owned or used by insured. ry� Employees as Named Insureds Fellow Employee Coverage :a Host Liquor Law Liability F Incidental Medical Malpractice Pesticide or Herbicide application Watercraft Liability, respect to watercraft less than 50 feet long and is not being used to carry people or property for a charge. := Non—Owned Watercraft Liability: watercraft less than 75 feet long. Coverage not subject to audit adjustment Defense in addition to limit of liability ,, Contingent Line Movement Expense Reimbursement Non-owned Aircraft Liability(chartered with a crew&pilot, not used to carry persons or property for a charge) EXCLUSIONS :* Pollution Liability Nuclear Energy Liability Care, Custody or Control of Property unless liability is assumed under a sidetrack agreement Uninsured—Underinsured Motorist Liability 1 ld, Bacteria, Asbestos Directors & Officers Liability exclusion April 16,2003 AUTOMOBILE VFHICI,t S CON-F LD: Any owned, rented, leased or borrowed auto. It includes hired, non— owned, newly acquired, replacement and temporary substitute autos, but does not include autos owned by your employees or members of their households, borrowed private passenger type autos, or autos where cov- erage has been reduced or limited on the auto schedule. Bodily Injury and $ 2,000,000 CSL each accident Property Damage Liability Uninsured/Underinsured Motorist Coverage $ 1,000,000 CSL each accident Medical Payments—Private Passenger Only $ 1,000 per person Physical Damage Coverage Comprehensive $ 150 ded per claim 4- Collision $ 500 ded.per claim - Specified Perils— Trailers No Deductible Applicable t DOTT1t NAL POLICY B1;;NVFITS Fleet Automatic applicable a Flat Premium—Policy not subject to audit adjustment Employees as Insureds a Fellow Employee Coverage MCS 90 Motor Carrier Endorsement a» Rental Reimbursement-30 days Expenses incurred to rent substitute equipment because of a loss to a covered automobile Hired Physical Damage �e Non—Owned&Hired Automobile Liability Full Glass Coverage April 16,2003 AUTOMOBILE • r COVERAGE L+`Qtfi Ni LN r— LIMIT OF LIABILITY Rt,N' AL ME TO A COVFRE i) Loss a Bucket Trucks, Digger Units or similar licensed $ 500 per day equipment. 30 day limitation $ 15,000 per accident ¢ Other Vehicles $ 50 per day $ 1,500 peraccident LOSS VAL1'1.T1ON COVERED A17TOS TEN (10) YEARS OLD OR NFYY'F,R For covered autos that are ten(10)years old or newer at the time of the loss,if those covered autos have the following type of mounted equipment: fla bucket trucks power shovels cranes diggers � drills >> generators z� air compressors or similar equipment. We'll pay the cost of repairing or replacing the damaged auto without deduction for depreciation. But we won't pay more than the smallest of the following: % The amount it would cost to replace the damaged auto at the time of the loss with a new auto of simi- lar kind and quality to be used for the same purpose. The actual cash value(ACV)of the damaged or stolen property at the time of the loss, if the damaged property is not repaired or replaced within 365 days of the loss. EEYDR,St4,1C Ftjl 1PYIENT 15 YEARS 01,D OR NEWER For hydraulic equipment that is fifteen(15)years old or newer, and is attached to a covered auto at the time of the loss,we'll pay the cost of repairing or replacing the damaged auto without deduction for de- preciation.But we won't pay more than the smallest of the following: The amount you actually spend in repairing the damage. :t The amount it would cost to replace the damaged property at the time of the loss with new property of similar kind and quality to be used for the same purpose. The actual cash value(ACV)of the damaged or stolen property at the time of the loss, if the damaged property is not repaired or replaced within 365 days of the loss. Except for the state of Louisiana and New York,which are five(5)years for covered autos and ten(10)years for hydraulic equipment. April 16,2003 POLICYF , UMBRELLA This insurance provides liability insurance protection for your business in excess of the below listed pri- mary insurance. LIMIT OF L,IAB1J,FI'V $ 10,000,000 Each Occurrence $ 10,000,000 Annual Aggregate $ 10,000 Self—Insured Retention Commercial General Liability(Bodily Injury, Property $ 2,000,000 Per Occurrence Damage, Personal Injury) S 6,000,000 Annual Aggregate Products, Completed Operations $ 2,000,000 Per Occurrence $ 2,000,000 Annual Aggregate Advertising Injury $ 2,000,000 Per Occurrence Employee Benefit $ 2,000,000 Fire Suppression $ 1,000,000 Weatherization $ 2,000,000 Automobile Liability Bodily Injury and Property Damage $ 2,000,000 Combined Employers Liability Bodily Injury By Accident $ 500,000 Each Accident Bodily Injury By Disease $ 500,000 Policy Limit Bodily Injury By Disease $ 500,000 Each Employee ;Exct. SIONS =� Pollution Liability .� Electra Magnetic Field Liability Nuclear Energy Liability 1^ Care, Custody or Control of Property unless liability is assumed under a Sidetrack Agreement Uninsured—Underinsured Motorist Liability Directors & Officers Liability Exclusion April 16,2003 ILI . PREMIUM SUMMARY - ST . PAUL COVERAGE Property NO2.412 Boiler&Machinery I S12,387 Crime 5',350 General Liability $130,349 Automobile 844,627 Umbrella Liability i $33,818 Program Premium 8284,943 not including optional coverages on following pages (some of svIdeh were cho- senor the current year's program) CIGA Surcharge(2% applies to all coverages S4,806 for the coverages listed above. above erceptjor Automobile) CIGA will also apply to any(if the optional coverages shown on the following pages. Directors & Officers see pages following Se Paul optional quotas Employment Practices Liability lions and St Paul TRIA quotations Difference in Conditions (Quake& Flood) Boiler& A-fachinety Fiduciary Liability This proposal Is not Intended to describe all coverages provided or available or all of their exclusions, conditions or limitations It Is de- signed to give you an outline of your insurance/risk management program, but it does not amend, alter, or extend the coverages af- forded by the policies described herein. April 16,2003 Marsh Risk&InsuranCe SOWCeS Page 10 of 25 RKOYMNSIM, I ! Y 6 f la CRIME Employee Dishonesty Optional Limit 1,000,000 Annual Premium $ 2,2`0 20 ('0NlJ.xRFHf NS1VE GENERAL LlAB11,1l Y A Property Damage Deductible per Occurrence: Reduce General Liability Premium By: $ 1,000 or $ 9,092 $ 2,500 or $ 117,336 $ 5,000 $ 23,3p2 Property Damage Deductible per Occurrence Reduce General Liability Premium By: $ 10,000 or $ 27.279 $25,000 $ 32,474 B Voluntary Property Damage Endorsement Increase General Liability Premium By: $ 500 Per Resident Consumer $ 5,000 Per Occurrence $ 6,l76 Optional Physical Damage Deductibles Automobile Premium Would Be. $500 Comprehensive $500 Collision $ 44,419 $ 1,000 Comprehensive $ 1,000 Collision $ 43,260 April 16,2003 'iELECTRO MAGNETIc FIELD LIABILITY The policy will pay amounts any protected person is legally required to pay as damages for covered bod- ily injury or property damage that: results from any electromagnetic field; happens on or after the retroactive date and before the ending date of this agreement; and is caused by an event. Electromagnetic field devaluation of real estate: The policy will pay amounts any protected person is legally required to pay as damages for covered devaluation of real estate that: results from any electromagnetic field, and happens on or after the retroactive date and before the ending date of this agreement A $10,000 deductible will apply to each real estate sale. Limit of Liability Annual Premium $500,000per Claim IS500,000 Annual Aggregate or $2,470 ❖ $1,000,000 per Cfaim/$1,000,000 Annual Aggregate $&176 April 16, 2003 Marsh Risk&117SUranCe SerWces Page.V of 25 OPIT-IONAL COVERAGE AND DEDUCTIBLE 2. Dmi-rEL) AIIow, £':izouND POLLUTION LIABILITY—CI,.Arm s NlAm Pollution Liability: This policy will pay amounts any protected person is legally required to pay as damages for covered bodily injury or property damage that results from covered pollution incidents. Covered pollution incident means the emission, discharge, release or escape of pollutants from your premises or work- sites. But only if such emission, discharge, release or escape: begins on or after the retroactive date; results from an accident; .- happens entirely above ground; �= begins and ends within 72 hours;and results in environmental damage. $1,000,000 Each Event/$1,000,000 Annual Aggregate Pollution Cleanup Costs Endorsement Pollution Cleanup Costs: The policy will pay covered pollution cleanup costs that result from the discharge, dispersal, escape, or release of pollutants at or from your premises which: �^ begins while this agreement is in effect; 9a is caused by a named peril; happens entirely above ground; �= must be reported within 30 days of discovery Pollution cleanup costs means any reasonable and necessary cost or expense incurred by you for pollution work Pollution work means: the testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, or neutralizing of any pollutant; or the responding to, or assessing, in any way the effects of any pollutant. Named peril means: a collision with an aircraft, auto, rolling stock, or other vehicle; explosion; fire; hall,- lighting; malicious mischief or vandalism; riot or civil disturbance; smoke; or windstorm. Limit: $25,000 Each Event/$100,000 Annual Aggregate * Pollution Claims MUST be reported within 30 days of the discovery in order for coverage to apply. Additional Premium: S 3,706 April 16,2003 IMPORTANT NOTICE TO AGENTS OR BROKERS- NOTIFICATION REQUIREMENTS UNDER THE TERRORISM RISK INSURANCE ACT OF 2002 Dear Agent or Broker: In order that The St. Paul may fulfill its requirements under the Terrorism Risk Insurance Act of 2002, and to protect you from any errors or omissions exposure, it is important that the attached "Disclosure Notice — Offer Of Terrorism Insurance Coverage" (D0102 Ed. 11-02) is delivered with the new or re- newal quote for this account. Delivery may be accomplished in a variety of ways, including US Mail, express mail, fax, or in person. We appreciate your cooperation. DISCLOSURE NOTICE - OFFER OF TERRORISM INSURANCE COVERAGE Pursuant to the Terrorism Risk Insurance Act of 2002, a quote for coverage for certified acts of terrorism, as defined by the Act, is shown below. You should know that, effective November 26, 2002, any coverage provided by this policy for losses caused by certified acts of terrorism would be partially reimbursed by the United States under a formula established by federal law. Under this formula, the United States pays 90% of covered terrorism losses exceeding the statutorily established deductible paid by the insurance com- pany providing the coverage. There is a cap on our liability to pay for such losses if the aggregate amount of insured losses under the Terrorism Risk Insurance Act of 2002 exceeds $ 100,000,000,000 during the applicable period for all insureds and all insurers combined. In that case, we will not be liable for the payment of any amount which exceeds that aggregate amount of $100,000,000,000. THE PREMIUM FOR COVERAGE FOR CERTIFIED ACTS OF TERRORISM, AS DEFINED BY THE ACT, IS: $2,064 $678 Property, Inland Marine, & Crime $1,155 Commercial General Liability $0 Commercial Auto $231 Umbrella Excess Liability $ Directors & Officers Liability $ CIGA may apply to the above premiums Important Note: The premium for your terrorism coverage is subject to change if you accept this quote and your policy is subsequently renewed with us. This premium does not include any charges for the portion of loss covered by the Federal Government under the Act. PRIOR TO THE BINDING OF COVERAGE FOR YOUR POLICY OR POLICIES, PLEASE INFORM YOUR AGENT OR BROKER IF YOU WOULD LIKE TO PURCHASE COVERAGE FOR CERTIFIED ACTS OF TERRORISM. Named Insured's or Named Insured's or Applicant's Name Applicant's Address Date Additional Coverages Renewal Quotations & Indications INSURANCE SUMMARY Directors' & Officers' Liability Carrier: Royal I emnit Com an A.M. Best Ratin : A- XIV (as of 4-15-03) Policy Period: May 1, 2003 to May 1, 2004 Policy Number: tbd Premium: S40,500 (indicated estimate)+ SS 10 CI GA Fee Coverage The Insurer will pay on behalf of the Insured Persons or Insured Organization CLAIMS MADE FORM all Loss which such Insured Person or Insured Organization shall become le- gally obligated to pay if during the Policy Period, any Claim or Claims are first made against the Insured Persons and reported in accordance with this policy,jointly or severally, for a Wrongful Act. Limits of Liability: $5,000,000 Aggregate limit of liability each policy period including Defense Expenses Retention: $ 0 each Director or Officer each loss but in no event exceeding $ 0 in the aggregate subject to $25,000 company reimbursement $25,000 each claim under Insuring Clause (C) $35,000 each claim for an Employment Practices Wrongful Act Defense Inside policy limits Exclusions: (including, •Nuclear Energy Liability But not limited to) •Prior and/or Pending Litigation • Professional Errors and Omissions • Prior Acts and Known Circumstance Insurance Summary Difference In Conditions (Earthquake & Flood Coverage) Coverage Condition SUBJECT TO NO OTHER ROYAL &SUNALLIANCE PARTICIPATION Submission Number: 186913 Renewal of: R2HQ324163 Company: Royal Indemnity Company- Admitted Covera e: Property- Difference In Conditions—Earthquake &Flood Insured: Truckee Donner Public Utility District Truckee, CA Policy Dates: May 1,2003 —May 1, 2004 Property Limits: $5,000,000 Per Occurrence And Annual Aggregates On Quake And Flood $367,500 Sublimit Applies To Extra Expense. Deductible: $25,000 - All Perils Except 5% Of Values At Time And Place Of Loss,With A $25,000 Minimum For Quake And Flood Valuation: Replacement Cost, BI Actual Loss Coverages. Building, Contents, Extra Expense,Fences Perils: Difference in Conditions Including Flood& Earthquake Form: Royal Forms Remarks: Based on PD TIV of 529,187,186 Royal PolicyAttachments: • Exclusion and Limited Additional Coverage for Fungus—IM & Manuscript • Exclusion - Electronic Pro erty and Virus—RSUI 4605 0502 Premium: $35,24 i $ 705 C1GA surchar $35,952 Total TRIA Premium (addi- 530,000 tional) S 600 CIG,�stxrehar<-C $3(1,(00 Total Please read all terms and conditions shown above carefully as they may not conform to specifications shown on your submission. This Quote is valid until 05/O1/2003 Royal offer of Terrorism Coverage for DIC policy In accordance with the. T rrorisr:r Risk insurance Act fat:21002, we are: required to offer the insured cov- erage for losses resulting from an act of terrorism, no, other ise excluded by this policy and as covered by the Terrorism Risk Insurance Act of 2002. All other policy provisions will apply to coverage for such act or terrorism. The insured must choose whether or not to pay the premium described below under DISCLOSURE OF PREMIUM for coverage for acts of terrorism that are certified by the Secretary of the Treasury as covered acts under the Terrorism Risk Insurance Act of 2002, or not to pay the premium, and reject this offer of coverage at the tiYnc of binding, If the prenrium shown in the DISCLOSURE OF PREMIUM is nol collected and the insured does not reject coverage for terroriser this policy will be is- sued excluding acts of terrorism. DISCLOSURE OF PREMIUM If you accept this offer. the premium covering acts of terrorism that are certified by the Secretary of the Tr asury under the Terrorism Risk Insurance Act of 2002 is $30,000.00 + $600 CIGA Surcharge DISCLOSURE OF FEDERAL, PARTICIPATION IN PAYMENT OF TERRORISM LOSSES The United States Government, Department of tire Treasury, will pay a share of terrorism losses insured under the federal program. The federal share equals 90% of that portion of the amount of such insured losses that exceeds the applicable insurer retention. Insurance Summary Boiler & Machinery Named Insured: Truckee Donner Public Utility District Effective Date: May 1, 2003 to May 1, 2004 Premium: $ 12,387 includes CIGA surcharge and l`RIA coverage Insurance Company: Continental Casualty Company Policy Number: tbd overage/Variation Value Line of Business: Boiler&Machinery Policy Form Number& Description BM 003106 95 & BM 0025 0695 Property Damage Limit $7,500,000 PD Deductible each occurrence $10,000 Expediting Expense Sublimit $100,000 Water Damage Sublimit $100,000 Ammonia Contamination Sublimit $100,000 Hazardous Substance Sublimit $100,000 Replacement Cost or ACV Replacement Cost Joint Loss Agreement Yes Comprehensive incl/excl Production Included Machinery Other Object Group Included Describe any other Object Groups Transformers Based on Equipment Values of: $7,762,500 Applicable to 4 distribution centers (underwriter increased expir- ing equipment values by 3.5%) F f { GMA Plaza Chicago It 86683001 Salty S. Narey Deputy Geneoc Counsel Sorter Vice President reteahe-ns 312-822-1314 Facsimile 31M17--3194 November 26, 2062 Internet sany.nareyrxcte com RE: 'Federal Backstop for Terrorism We want to bring you up-to-date about various aspects of the important new Federal backstop for terror- ism legislation that President Bush signed into law Tuesday, November 26. There are implementation requirements that need our mutual immediate response to make sure that as business partners we fulfill our obligations under this important new law. Failure to comply with these mandates can result in significant monetary penalties and eopar6ze participation in the Federal program. Who Is Covered T he law applies to all commercial lines of Property and Casualty insurance, including Excess, Workers' Compensation and Surety, with only a few minor exceptions. It does not include life or health insurance, reinsurance, medical malpractice insurance or personal lines. it, addition to carriers that ore licensed and admitted in the U.S_ the rasv covers insurers it ho are not licensed but are eligible surplus limes carriers listed on the Quarterly Listing of Alien Insurers nj'the NlIC Availability of Terrorism Coverage Until December 31, 2004, covered insurers must make terrorism coverage available in all commercial Property and Casualty insurance policies. Existing terrorism exclusions may be reinstated only under limited circumstances: • An insurer has received a written statement from the insured that affirmatively authorizes the rein- statement; or • An insured has failed to pay any increased premium charged for terrorism coverage and the in- surer has provided notice at least 30 days prior to reinstatement of (a) the increased premium for the terrorism coverage and (b) the insured's rights with respect to the coverage, including the date the exclusion will be reinstated if no payment is received. Disclosure Pegj�rrernents The law requires that i rstarer t provide clear and c onsisecuous nolov to poflqvholders inform rig there of the ex- istence or ierrorissn insurance coverage, the arncunr of uny pr enrurn charged for acr rorion c drier age, and the Federal,hare of covered losses A For policies issued before November 26. 2002, notice must be pro vided9 within g6 days. CA will complete a mass mailing to the impacted policyholders. 2. Ci'ssclasure Requirements continued • Beginning November 26, 2002 all quotes must contain the notice. c Your agency must provide the notice when you quote via CNA Central. It will be available on the GNA Central home page and via links within the quote process. * Your agency must attach the appropriate notice to any new or renewal policies issued from November 26, 2002 to February 26, 2003 that you distribute lather than Workers' Compensation). CNA will have an automated solution to provide the notice in the policy very shortly. o CNA will provide the notice with the quote for all CNA-generated quotes. • For new and renewal business policies issued March 1, 2003 and beyond, the no- tice must be provided can a separate line in the policy. CNA will ensure that the no- tice is attached. • For other business that is written through a PICtfllvlCA, a separate communication will be provided to the necessary parties. Rates for Terrorism Coverag Although the Federal law does allow premium charges for the coverage, it does not preempt state authority to ultimately approve or not approve the amount charged. Initially, we will not include an additional charge for terrorism coverage on business that previously was written without the terrorism exclusion. This will enable us to provide the notices on a timely basis, and secure additional insight into the expedited filing process and the availability of advisory organization loss costs, Once we have a better understanding of these factors, we will determine what premium is appropriate. For certain other accounts where coverage previously has been excluded or currently charged for New York Workers' Compensation, we anticipate immediately charging (or continuing to charge) a premium for terrorism coverage. The appropriate premium(s) to be charged for these policyholders will be determined in the very near future, if it already established and communicated to all necessary parties. 92en Issues There are still a number of open issues and unanswered questions about implementation of this legislation. We will keep you updated as we learn more. IMPORTANT INFORMATION POLICYHOLDER DISCLOSURE NOTICE OF INSURANCE COVERAGE FOR ACTS OF TERRORISM You are hereby notified that under the Terrorism Risk Insurance Act of2002, effective November 26, 2002, that you are entitled to insurance coverage for losses arising out of acts of terrorism, as d(fined in the Act, subject to all applicable policy provisions. You should know that any covered losses caused by acts of terrorism will be partially reimbursed by the United States under a formula established by federal law. Under this formula, the United States pays 90%of covered terrorist 'Losses exceeding the statutorily established deductible paid by the. insurance company providing the coverage. The premium as of this date that is attributable to coverage for acts of terrorism is S -G +moo April 11,2003 Quotation Worksheet Account: TRUCKEE J()`P#F R PiIBIAC i-T3F 11Y DISTRK F Account Number: 498296 Producer: MARSH USA, NIC fSyFF,SFO) SAN FRAN(ASCO,CA Pudic Entity Fiduciary Liability on FedeaaV insurance Company h`orrr, 14-02-3817(1 1990 edA and CR1000(0 1995 od.) COVERAGE FORM(S)FORMING LIMIT OF DEDUCTIBLE NO. PART OF THIS POLICY INSURANCE AMOUNT Fiduciary Co4era4e x i fii?,i 00 0 Defense Coctrage S1,000.000 SO TOTALANNUAF.:I'&2P:M1UM: SI,870+-S377,40CIGA An adshurmi d 2.000°i«CA surcharge is applicable(shown above) ENDORSENI EYTS fThe titres and headings are Tor con=rcurses"ends. Pleas' refer to the policy and endorsements for a description of coverage): I4-02-1249 WAIVER OF RECOURSE PREMIUM BILL(192ed.) l : 02-1350 CALIFORNIA Pla"MIUM ENDOiRSEMEN I t 1 its ed.) I4 02-6846 ADDITIONAL 7 RE�STiS)ENDORSEMF`v 1 (b 02 ed)Truckee Drum Pudic Utdoy District Defined Benefit Pen- sion Plan C ONTINC FNC iES Tito above uucte is expressly corquigion upon recelpc r<ev§ew And acazptebCC of the,uhtc ttvnice Hated befoe, We must recei%c +11 of the items identified below on or before the:iuooation Expiration date shower to rv,v. If all of these;cans are not received and approved by as on or before this date,this quote"ill autornatic lic extrue anhour£urtner action or notice, L Completed Application Sig=tied and Dated by the President or(J-O 2_ Plan financials OTHER: Quotation Expiration: 30 Days i2e€oreguing quotation for c,overagc is subject t modification or withdr ta€by the C ompar=al before the proposed ed meepoon date,any new,corrected or updated in£o-rionion becomes known wbic4 relates to any proposed Insured's clau.ts history or risk exposure or skli ch could othermse change the undervrrnng evaluation o€any proposed in€ured,and the Company, fn its sate discretian,detemunes that the rims y icg isro are no longer appropriate. Chubb & Son,div,of Federal Insurance Cotngsanv as manager of the member insurers of the Chubb Group of Insurance Companies OFFEREE DISCLOSURE NOTICE OF TERRORISM INSURANCE COVERAGE (new policies and renewals with no terrorism exclusion or subfinift and 110 premium charge) You are hereby notified that, under the Terroristo Risk insurance Act of 2002 (the "Act") effective November 26, 2002, we are makino available to YOU insurance for losses arising out of certain acts i of international terrorism. Tire policy YOU are purchasing already includes insurance for such acts. Terrorism is defined as any act certified be the secretary of the Treasury, in concurrence with the Secretary of State and the Attorney General of the United States, to be an act of terrorism; to be a violent act or an act that is dangerous to human life, property or infrastructure; to have resulted in damage Within the United States, or outside the United States in the case of an air carrier or vessel or the premises of a United States Mission; and to have been committed by an individual or indi- viduals acting on behalf of any foreign person or foreign interest, as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of'the United States Government by coercion. You should know, that the insurance provided by your Police for losses caused by acts of terrorism, is partially reimbursed by the United States under the formulit set forth in the Act. Under this for- mula, the United States pays 9d% of covered terrorism losses that, exceed the statutorily established deductible to be paid by the insurance company providing the coverage. The portion of the offered policy's I ,�s annual preranin' 'hat is attributable to insurance for acts of terrorism is: S ®0 if you have any questions about this notice, please contact your agent or broker, .............. s X v NI S @"''.f2CL yak q� (y ¢�;yy� y S Q S62.412 Property s Boiler&Machinery 12,3n7 1,3JCt � Crime � ( General AutomobileLiability b13 `349 s $$4.(a2i $33.818 Umbrella Liability $284,9d3 not including optional coverages Program Premium j (St9me of which Were chosen fir the current j year's program) CIG Surcfsarge(2°lo applies to aZf eouerages 6 for the co�� verages listed above---but above except for Automobile) not inctndiaag �ICrA on optionut coverages. Directors & Officers/ ��•90G iaa€�rcated estimated preminm $ �1(1 C`Itr f Surcharge � Employment Practices Liability � � Difference fn Conditions (Quake&Flood) C 1( i n�Lharge 10 010 TRIA Prcmftm t ()t)tt C'i{s l 5urc harve Boiler&Machinery hl' 38 including t' C;rP and T Zlii (( K? irlf.crratyLiahili?r 138 (`It>4 St�rchari;e _— i TOTAL -will be more or less depending on final �S381,306 � optional coverages chosen, optional deductible lev els, TRIA choices and final premiums from 7hxs premrum total does azr t include TRIA underwriters where indications are shown � coverage kept where t is¢ncluded at no � ( charge and does not include optional cover-- ages such as LML`Damage, Pollution Liability and Voluntary Property Damage that were chosen last year. -------------------------------