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GENERAL PROPERTY COVERAGE

GENERAL PROPERTY COVERAGE

FOR THE

PURMS JOINT SELF-INSURANCE AGREEMENT

Amended and Restated as of November 21, 2002

TABLE OF CONTENTS

Definitions for the General Property Coverage. 4

Interest and Property Insured. 13

Coverage A:  Property Owned or Held by Member 13

Coverage B:  Property-in-Transit 14

Coverage C:  Property-Under-Construction. 14

Coverage D:  Extra Expense. 14

Coverage E:  Expediting Expenses. 15

Schedule of Values. 15

Administrator Shall Maintain Schedule of Values of Insured Property. 15

Schedule of Values Establishes Identity of Insured Property for Coverage Purposes. 15

Schedule of Values Establishes Insured Values of Insured Property for Assessment Purposes. 16

Property Coverage Limit 16

Property Coverage Limit and Board Modification of the Same. 17

Maximum Property Retention and Board Modification of the Same. 17

Extended Property Coverage When Applicable Excess Property Insurance Retention Exceeds the Property Coverage Limit and Creates a Gap in Coverage. 18

Coverage Territory. 19

Perils Insured Against 19

Deductibles. 19

Assigned Deductibles. 19

Mandatory Deductibles. 20

Property Deductible Credits. 21

Property Excluded. 22

Perils Excluded. 23

General Perils Exclusions. 23

Additional Exclusions Applicable to Electronic Data Equipment and Media. 26

Additional Exclusions Applicable to Property-in-Transit 26

Exclusion re Losses to Partially Exempt Insured Property. 27

Valuation of Property Loss. 27

Coverages A and B only ("Property Owned or Held by Member" and "Property-in-Transit 27

Coverage B: "Property-in-Transit.\ 29

Coverage C: "Property-under-Construction\ 29

Limitations. 29

Coverage Conditions. 29

Conditions Applicable to Coverage A Only: "Property Owned or Held by Member" (Regarding Newly Acquired Property, Leased Property and Assumed Liability) 29

Conditions Applicable to Coverage B Only:  "Property-in-Transit.\ 30

Conditions Applicable to Coverage C Only:  "Property-Under-Construction.\ 31

Conditions Applicable to Coverage D Only:  "Extra Expense.\ 31

Conditions Applicable to Coverage E Only:  "Expediting Expenses.\ 32

Order of Coverage Payments. 33

Appraisals to Establish Insured Values. 33

Permission Clauses. 34

Determination of Number of Property Losses. 34

Debris Removal Expense. 35

Other Insurance. 35

Inspection of Insured Property and Member's Operations. 36

Pair, Set or Parts. 36

Duties of the Member in the Event of a Property Loss. 36

Fund's Right of Subrogation. 37

Impairment of Subrogation Rights. 38

Salvage and Third-Party Recoveries. 38

Claims Against Third Parties. 38

Protection of Property. 38

No Benefit to Bailee. 38

Fund's Coverage Options. 39

Fund's Privilege to Adjust With Owner 39

Examination of Records. 39

Fund's Right of Inspection. 39

Suspension of Coverage for Unreasonable Risks or Violations of Risk Management Program.. 39

Coverage for Insured Property Subject to Warranties. 39

 


 

GENERAL PROPERTY COVERAGE

FOR THE

PURMS JOINT SELF INSURANCE AGREEMENT

Amended and Restated as of November 21, 2002

Overview of Coverages for PURMS Risk Pools

The Coverages Sections of the SIA set forth the Insuring Agreements, Exclusions, and other terms and conditions which comprise the Coverages provided by the Fund for the Members of its Risk Pools and, as applicable, their Employees under the SIA. 

The current Liability Coverage provided by the Fund for Members of the Liability Pool includes:  Commercial General Liability (SIA § III, “CGL”); Public Officials & Entity Liability (SIA § IV, “PO&E”); Automobile Liability (SIA § V); and Pollution Liability (§ VI). The CGL Coverage was originally adopted on December 20, 1976, has been amended from time to time, and was unanimously re-adopted by the Members on December 7, 2001. The PO&E, Automobile and Pollution Liability Coverages were first adopted effective March 30, 1995. The PO&E Coverage was unanimously re-adopted by the Members on December 7, 2001.

The current Property Coverage provided by the Fund for Members of the Property Pool includes:  General Property Coverage (SIA § X) and Auto Physical Damage Coverage (SIA § XI). Both of these Property Coverages were originally adopted effective February 27, 1997.

Members of the Property Pool may participate in either or both Property Coverages (SIA § X and/or § XI).  Members of the Liability Pool must participate in all Liability Coverages provided by the Fund (SIA § III - VI).

The current Health & Welfare Coverage provided by the Fund for the Members of the H&W Pool is set forth in § XIV. The H&W Coverage was originally adopted on March 16, 2000, effective April 1, 2000, and was amended and restated and unanimously re-adopted by the Members as of December 7, 2001.

These Coverages, as amended from time to time pursuant to § I, ¶ 5.2, are specifically incorporated into the Interlocal Agreement and shall be deemed a part of that Agreement as if fully set forth therein.

Unless specified or necessarily implied by the terms of the Auto Physical Damage Coverage Section to the contrary, the terms, conditions, limitations, exceptions, provisions and stipulations of this General Property Coverage Section shall also apply to the Auto Physical Damage Coverage.

GENERAL PROPERTY COVERAGE

1.               Definitions for the General Property Coverage.  The Definitions set forth in the "Definitions" Section of the SIA (see, § II) apply to the interpretation of the Coverage provided by this General Property Coverage Section, except as may be modified specifically or by necessary implication by the Definitions set forth below which are specific to the General Property Coverage contained in this § X).

1.1.          Actual Cash Value -- shall mean Replacement Cost less depreciation (see § X, ¶ 10, "Valuation of Property Loss").

1.2.          Actual Property Pool Balance -- shall mean the cash, investments, and any other assets held by the Fund for and on behalf of the Property Pool at any particular point in time for the payment of Coverage Payments, Property Claim Costs, Direct Administrative Expenses and the Property Pool's allocation of Shared Administrative Expenses, but excluding any cash or other assets allocated to any Special Purpose Accounts for the Property Pool (see § I, ¶ 13.1.2).

1.3.          Annual Appraisal -- shall mean the Detailed Appraisal or the Updated Appraisal obtained by the Fund on behalf of the Property Pool on an annual basis to establish the Insured Values of Members' Insured Property for purposes of applying the Property Assessment Formulas (see § X, ¶ 14).

1.4.          Assigned Deductible -- shall mean the Deductible a Member chooses to assign to an Item of Insured Property as reflected in the Schedule of Values maintained by the Administrator (see § X, ¶ 7.1), or the Deductible otherwise established for the Member's Insured Property pursuant to § X, ¶ 7.2.

1.5.          Assumed Liability - shall mean property owned by a Third Party, excluding property owned by an Employee, for which the Member has agreed to be legally responsible by contract, which is not listed in the Schedule of Values at the time a Property Assessment is issued, but with respect to which Property Coverage is provided pursuant to § X, ¶ 3.2.1 and 12.1.1 and this Property Coverage Section.

1.6.          Auto Physical Damage Coverage -- shall mean the Auto Physical Damage Coverage which is offered to Members of the Property Pool for Direct Physical Loss or Damage to a Covered Auto arising from an Accident as part of the Fund's Property Coverage Program, as set forth in § XI. 

1.7.          Automatic Extended Property Coverage – shall mean the automatic extension of Property Coverage beyond the Property Coverage Limit up to the amount of the Maximum Full Extended Property Coverage of $750,000 for a particular Property Loss, as provided in § X, ¶ 4.3.1.

1.8.          Automatic Mandatory Deductible – shall mean a Mandatory Deductible automatically established by the Excess Property Policy and imposed upon certain Categories of Insured Property or Categories of Perils under § X, ¶ 7.2.1 of the General Property Coverage.

1.9.          Category of Insured Property – depending upon the context, shall mean the grouping of Insured Property that is subject to a particular Specific Risk Based Rate, or the grouping of Insured Property that is subject to a particular Excess Property Insurance Retention that exceeds the Property Coverage Limit.

1.10.       Category of Risk – depending upon the context, shall mean or refer to the Peril(s) associated with a particular Specific Risk Based Rate, or the Perils associated with a particular Excess Property Insurance Retention that exceeds the Property Coverage Limit.

1.11.       Cost of Substitute Service -- shall mean the difference between the cost to the Member of acquiring the raw material that is the subject of its services (i.e., electricity, water, gas or sewer) under Normal operations and the cost to the Member of acquiring such material from alternative sources in order to continue its operations as the result of a Property Loss (see § X, ¶ 2.4).

1.12.       Covered Auto Physical Damage Claim -- shall mean a Property Claim filed with the Administrator by a Member, on behalf of the Member or one or more of its Employees, arising out of an Accident causing Direct Physical Loss or Damage to a Covered Auto, which occurred at a time when the Member requesting Auto Physical Damage Coverage for the Property Claim was a Member of the Property Pool, and for which Auto Physical Damage Coverage is provided by the Fund pursuant to the terms of the Auto Physical Damage Coverage Section (see § XI).

1.13.       Covered Property Claim -- shall mean a Property Claim filed with the Administrator by a Member, on behalf of the Member or one or more of its Employees, arising out of a Property Loss that occurred while the Member was a Member of the Property Pool, and for which Property Coverage is provided by the Fund pursuant to the terms of the Property Coverage Section (§ X).

1.14.       Debris Removal Expense - shall mean the Property Coverage the Fund provides for removal of debris caused by a Property Loss to Insured Property, as provided in § X, ¶ 17 of the Property Coverage Section.

1.15.       Detailed Appraisal -- shall mean the comprehensive Annual Appraisal obtained by the Fund on behalf of the Property Pool in the first calendar year of the Property Pool's operation, and in every third calendar year thereafter, as provided in § X, ¶14, "Appraisals to Establish Insured Values."

1.16.       Designated Property Pool Balance -- shall mean be the amount equal to two (2) times the currently applicable Maximum Property Retention, as established by the Board from time to time pursuant to § I, ¶ 13.1.1 (see also § X, ¶4).

1.17.       Direct Administrative Expenses -- shall mean those Administrative Expenses the Fund incurs as a direct result of the operations of a particular Risk Pool, which shall be allocated in total to the financial responsibility of that Risk Pool (see § I, ¶ 13.1.5)

1.18.       Direct Physical Loss or Damage -- shall mean the physical destruction of or damage to Insured Property as a result of an Insured Peril(s) (see, Definition of "Property Loss", § X, ¶ 1.60, and terms of Property Coverage set forth in § X, ¶ 4).

1.19.       Discretionary Extended Property Coverage – shall mean the extension, at the discretion of the Board pursuant to § X, ¶ 4.3.2, of Property Coverage beyond the Property Coverage Limit up to a maximum of $250,000 of additional Coverage for the Claim, including Property Claim Costs.

1.20.       Discretionary Mandatory Deductible – shall mean a Mandatory Deductible, in addition to any Automatic Mandatory Deductibles in effect under § X, ¶ 7.2.1, imposed by the Property Pool upon certain Insured Property or with respect to certain Insured Perils, in a specified amount, established in accordance with the procedures in § X, ¶ 7.22.

1.21.       Dollar Percentage-of-Completion -- for purposes of determining the Insured Value of Property-Under-Construction, shall mean the dollar value of the construction work in place, measured by the total dollar obligation the Member has incurred under the construction contract as reflected by the construction progress payment schedule at the time the Property Assessment was issued.

1.22.       Employee's Property -- shall mean property owned by the Employee which is covered under this General Property Coverage Section under the circumstances set forth in § X, ¶ 2.1.5, but excluding "Employee's Autos", which may be covered under the Auto Physical Damage Coverage Section under the circumstances set forth in § XI, ¶ 1.8.3.

1.23.       Expediting Expenses -- shall mean those expenses a Member incurs to expedite repair or replacement of the damaged Insured Property, as provided in § X, ¶ 2.5; provided that such expenses are approved by the Administrator in advance, as required by § X, ¶ 12.5.

1.24.       Excess Insurance Attachment Points –shall mean the level of expenditures by the Fund on behalf of a Risk Pool for a Covered Claim, for Coverage Payments, and Defense Costs and/or Property Claim Costs, at which the Risk Pool's obligation to provide Coverage is exhausted and the Risk Pool's Primary Excess Coverage attaches and begins to provide coverage for the Covered Claim.

1.25.       Excess Property Insurance Retention – shall mean the amount of the self-insured retention or deductible imposed under the Excess Property Policy for a Property Loss to a particular Category of Insured Property, or from a Peril in a particular Category of Risk, before the Excess Property Insurance attaches and begins to provide Excess Property Coverage for such Loss. (See § XII, ¶ 2.2.1.)

1.26.       Excess Property Policy – shall mean the insurance policy that reflects the Excess Property Coverage for Members of the Property Pool.

1.27.       Extended Property Coverage – shall mean either Automatic Extended Property Coverage (see § X, ¶ 4.3.1) or Discretionary Extended Property Coverage (see § X, ¶4.3.2). Under these paragraphs, the amount of the Property Coverage may be increased beyond the Property Coverage Limit on a Property-Loss-by-Property-Loss basis, under the circumstances stated therein.

1.28.       Extra Expense -- shall mean the excess of the total cost to the Member during the Period of Restoration of the damaged Insured Property chargeable to the operation of the Member's Public Utility Operations over and above the total cost the Member would have incurred to conduct its Normal operations during the same period of time had no Property Loss occurred (see § X, ¶ 2.4).

1.29.       Fair Market Value -- shall mean the amount a third-party purchaser, who is not under compulsion, would pay for the Insured Property at the time and place of the Property Loss if the Property had not been damaged; provided that the Fair Market Value shall never exceed the Actual Cash Value thereof.

1.30.       Follow-Up Assessment -- shall mean a Property Assessment for Newly Acquired Property, Leased Property, Assumed Liability or Property-Under-Construction, issued retroactively to one or more Members of the Property Pool under the circumstances set forth in § X, ¶ 12.1.2 and 12.2.2.

1.31.       Gap in Coverage – shall mean and refer to the dollar difference between the amount of the Property Coverage Limit and the amount of the Excess Property Insurance Retention applicable to a particular Property Loss that exceeds the Property Coverage Limit. (See § X, ¶ 4.3.1.)

1.32.       General Property Coverage -- shall mean the Coverage provided to a Member of the Property Pool as part of the Fund's Property Coverage Program for Direct Physical Loss or Damage to Insured Property under the General Property Coverage Section (§ X).

1.33.       Insured Perils -- shall mean all perils covered under the all-risk General Property Coverage Section, except for the perils that are Excluded (see, § X, ¶ 8).

1.34.       Insured Premises -- shall mean the buildings, structures and improvements on real property thereon identified to the Member as Insured Property in the Schedule of Values maintained by the Administrator.

1.35.       Insured Property -- shall mean property identified to the Member in the Schedule of Values maintained by the Administrator or property subject to one of the exceptions thereto set forth in § X, ¶ 3.2.1 and 12.1.1 or in ¶ 3.2.2, and shall include all Autos identified for Coverage under § XI. In the context of the Excess Property Insurance, “Insured Property” shall mean the property of a Member that is insured under the Excess Property Policy.

1.36.       Insured Value -- shall mean the value assigned to an Item of Insured Property listed in the Schedule of Values established pursuant to an Annual Appraisal (see § X, ¶ 3.1), or the value(s) otherwise assigned to the property by the Administrator in accordance with § X, ¶ 3.3, which shall be used for purposes of determining Members' Assessment Shares under the Property General Assessment and Premium Assessment Formulas.

1.37.       Item of Insured Property – shall mean and refer to each separate listing of Insured Property on the Schedule of Values which is subject to an Assigned Insured Value, whether such listing reflects a single piece of Insured Property or multiple pieces of like-kind property.

1.38.       Leased Property -- shall mean property owned by a Third Party which a Member, or an Employee at the direction of the Employee's Supervisor, borrows or leases for use in the Member's Public Utility Operations, which is not listed in the Schedule of Values at the time a Property Assessment is issued, but with respect to which Property Coverage is provided pursuant to § X, ¶ 3.2.1 and 12.1.1 and this Property Coverage Section.

1.39.       Mandatory Deductible – shall mean the Automatic Mandatory Deductible applied to those Categories of Risk for which the Excess Property Carrier has established Excess Property Insurance Retentions that do or, under certain circumstances, could exceed the amount of the Property Coverage Limit, as provided in § X, ¶ 7.2.1, or a Discretionary Mandatory Deductible established pursuant to the procedures in § X, ¶ 7.2.2.

1.40.       Maximum Full Extended Property Coverage  -- shall mean the maximum amount the Property Pool will pay in Property Coverage Payments and Property Claim Costs at one hundred (100%) percent Coverage (after the applicable Deductible), for a Property Loss, subject to a Gap in Coverage, that exceeds the Property Coverage Limit, under the circumstances set forth in § X, ¶ 4.3.1(b).

1.41.       Maximum Partial Extended Property Coverage  -- shall mean the maximum amount the Property Pool will pay in Property Coverage Payments and Property Claim Costs at fifty (50%) percent Coverage for a Property Loss, subject to a Gap in Coverage, that exceeds the Maximum Full Extended Property Coverage, under the circumstances set forth in § X, ¶ 4.3.1(c).

1.42.       Maximum Property Retention -- shall mean the amount established by the Board by Super-Majority Vote which sets the ceiling for any increases the Board can make in the Property Coverage Limit from time-to-time by Majority Vote (see § I, ¶ 13.1.1 and § X, ¶ 4). 

1.43.       Month -- shall mean thirty (30) consecutive days.

1.44.       Mothballed Equipment – shall mean machinery or equipment that a Member has inactivated or taken out of service for a period of time: (a) which constitutes Partially Exempt Insured Property, as provided in § XII, ¶ 2.3.5; (b) with respect to which the Member is exempted from Assessment under the 70% “Risk Based” Component of the Property General Assessment Formula for the Specific Risk Based Rate(s) associated with the Exempt Categor(ies) of Risk, as provided in § XII, ¶ 2.3.3(a); and (c) which is excluded from General Property Coverage for Loss resulting from the Peril(s) within the associated Exempt Category of Risk, as provided in § X, ¶ 9.4.

1.45.       Normal -- shall mean the condition that would have existed had no Property Loss occurred.

1.46.       Newly Acquired Property -- shall mean property acquired by a Member which is not listed in the Schedule of Values at the time a Property Assessment is issued, but with respect to which Property Coverage is provided pursuant to § X, ¶ 3.2.1 and 12.1.1 and this Property Coverage Section. 

1.47.       Operational Costs -- shall mean the expenses the Fund incurs with respect to a particular Risk Pool, including without limitation, Coverage Payments, Defense Costs or Property Claim Costs, Direct Administrative Expenses and the Risk Pool's allocation of Shared Administrative Expenses (see § I, ¶ 13.1.5).

1.48.       Other Insurance – with respect to the Property Coverage, shall mean any insurance issued by any insurance carrier that provides any coverage for a Property Loss, as defined in § X, ¶ 18 of the General Property Coverage Section.

1.49.       Partially Exempt Insured Property – shall mean Insured Property that has been established as “Partially Exempt Insured Property” pursuant to written notice to the Administrator, as provided in § XII, ¶ 2.5.3(a), which is exempted from Assessment under the 70% “Risk Based” Component of the Property General Assessment Formula for the Specific Risk Based Rate(s) associated with the applicable Exempt Category of Insured Property or Exempt Category of Risk, as provided in § XII, ¶ 2.5.3(b) and 2.3.3(a), and which is excluded from General Property Coverage for Loss resulting to Property in the Exempt Category of Property and/or from the Peril(s) within the associated Exempt Category of Risk, as provided in § XII, ¶ 2.5.3(c) and § X, ¶ 9.4.

1.50.       Perils – shall mean any of the types of acts or events that can result in Direct Physical Loss or Damage to Insured Property. “Perils” generally shall mean “Insured Perils” (unless such Peril(s) are Excluded because they relate to an Exempt Category of Risk or are otherwise Excluded).

1.51.       Period of Restoration -- shall refer to Insured Property that has suffered a Property Loss and is being rebuilt, repaired or replaced, and for purposes of Extra Expense Coverage, such property shall be considered within the "Period of Restoration" for the length of time required for the Member, with the exercise of due diligence and dispatch, to rebuild, repair or replace the damaged property. (See § X, ¶ 2.4.)

1.52.       Pollution -- shall mean any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste.  Waste includes materials to be recycled, reconditioned or reclaimed.

1.53.       Possession -- shall mean a Member's taking care, custody or control of property.

1.54.       Property Assessment -- shall mean an Assessment of the Property Pool Members by the Fund on behalf of the Property Pool under one of the Property Assessment Formulas (see §§ XII and XIII).

1.55.       Property Assessment Formulas -- shall mean either the Property General Assessment Formula (set forth in § XII) or the Property Premium Assessment Formula (set forth in § XIII).

1.56.       Property Claim -- shall mean a claim filed by a Member of the Property Pool, on behalf of the Member or one or more of its Employees, requesting Property Coverage for a Property Loss.  "Property Claim" shall include a claim for Direct Physical Loss or Damage to a Covered Auto under the Auto Physical Damage Coverage Section (see § XI).

1.57.       Property Claim Costs -- shall mean all costs and expenses the Fund incurs in connection with resolving a Covered Property Claim, including without limitation, investigation and expert expenses, witness fees, court costs and attorney's fees, but not including any related Administrative Expenses or Property Coverage Payments, and not including such expenses to the extent that they are incurred by the Property Pool in connection with investigating or pursuing its Subrogation Rights.

1.58.       Property Coverage -- shall mean the Coverage provided to a Member of the Property Pool for Direct Physical Loss or Damage to Insured Property under the General Property Coverage Section (see § X) or to Covered Autos under the Auto Physical Damage Coverage Section (see § XI).

1.59.       Property Coverage Limit – shall mean the maximum amount the Fund may be required to pay, including Property Claim Costs, for all Covered Property Claims filed by one or more Members arising from one Property Loss, as provided in § X, ¶ 4, less applicable Assigned or Mandatory Deductibles, and subject to the provisions of § X, ¶ 4.3.1 which provide for Automatic Extended Property Coverage when the applicable Excess Property Insurance Retention exceeds the amount of the Property Coverage Limit.

1.60.       Property Coverage Payment -- shall mean the payment(s) the Fund makes to or on behalf of a Member for the Property Loss Amount, but not including any related Administrative Expenses or Property Claim Costs.

1.61.       Property Deductible Credits – shall mean the credits a Member is allocated under the Property General Assessment Formula according to rates set forth in the current ISO Commercial Lines Manual or successor manuals (which shall be available for inspection at the Administrator's offices), based upon the levels of Deductibles applicable to a Member's Insured Property determined in accordance with § X, ¶ 7.  . 

1.62.       Property General Assessment -- shall mean a General Assessment under the Property General Assessment Formula (see § XII).

1.63.       Property General Assessment Formula -- shall mean the General Assessment Formula for the Property Pool, set forth in § XII.

1.64.       Property-In-Transit -- shall mean the shipment or movement of Insured Property within the Coverage Territory of this Property Coverage, by any means of conveyance, from the time the Insured Property is moved for the purpose of loading and continuously thereafter while awaiting and during loading and unloading and in temporary storage, including deviation and delay, until delivered to the place of final destination (see § X, ¶ 2.2).

1.65.       Property Loss -- shall mean an act or event constituting an Insured Peril(s) that causes Direct Physical Loss or Damage to Insured Property which occurred at a time when the Member requesting Property Coverage for the Property Claim was a Member of the Property Pool (see § X, ¶ 4).  "Property Loss" shall include Direct Physical Loss or Damage arising from an Accident involving a Covered Auto under the Auto Physical Damage Coverage Section (see § XI).

1.66.       Property Loss Amount -- shall mean the total dollar amount of loss or damage to a Member's Insured Property, including Covered Autos, if any, resulting from a single Property Loss, as determined under § X, ¶ 10, "Valuation of Property Loss", and any additional amounts for which Property Coverage is provided under Coverages D and E ("Extra Expense" and "Expediting Expense").

1.67.       Property Pool Investment -- shall mean the amount of money, without interest, a Member contributed to the Fund on behalf of the Property Pool at any time pursuant to one or more Reserves Assessments (see § I, ¶ 21.5).

1.68.       Property Premium Assessment -- shall mean a Premium Assessment under the  Property Premium Assessment Formula (see § XIII).

1.69.       Property Premium Assessment Formula -- shall mean the Premium Assessment Formula for the Property Pool, set forth in § XIII.

1.70.       Property-Under-Construction - shall mean the renovation or construction of buildings or improvements on real property in which the Member has an interest and which have a value or construction contract price exceeding $25,000, while under the process of construction (see § X,¶ 2.3).

1.71.       Replacement Cost -- shall mean the amount it would take to replace the damaged or destroyed property with property of like kind and quality, determined at the time and place of the Property Loss (see § X, ¶ 10, "Valuation of Property Loss"), including sales tax and reasonable cost of installation. "Replacement Cost" shall include any increased cost imposed by any Governmental Authority in connection with repairing, replacing or rebuilding damaged Insured Property, except as provided in Perils Exclusions, § X, ¶ 9.1.10, 9.1.11 and 9.1.12 regarding asbestos.

1.72.       Reserve Assessment Formula -- shall mean the Assessment Formula used to fund any "Reserves" necessary for the Property Pool, as set forth in § I, ¶ 13.3.3 of the Interlocal Agreement.

1.73.       Reserve Assessments -- shall mean those Assessments of Property Pool Members for the purpose, initially, of establishing the Reserves necessary to commence operation of the Property Pool, and thereafter, as determined by the Board from time to time, to fund the Reserves necessary to support any increases in the Maximum Property Retention or the Designated Property Pool Balance from the level established upon commencement of the Property Pools' operations. 

1.74.       Reserves -- shall mean the minimum amount of liquid assets the Property Pool is required to establish to provide financial support for the Property Coverage Limit in order to commence operations of the Property Pool, and any additional amounts thereafter established by the Board to support any increase in the Property Coverage Limit over its initial level, as determined by Super-Majority Vote effecting an increase in the Maximum Property Retention or the Designated Property Pool Balance.  All Reserves shall be funded by Reserve Assessments (see § I, ¶ 13.3.3)

1.75.       Salvage -- shall mean any payment due or received by a Member for selling damaged Insured Property that is beyond repair, or is determined by the Administrator to be uneconomical to repair.  All salvage payments owed or made to a Member (including an Employee) from a Third Party purchaser of salvage, excluding proceeds from Subrogation, shall reduce the Member's Property Loss Amount accordingly, or shall be paid over to the Fund if the Property Loss Amount has already been paid (see also § X, ¶ 23).

1.76.       Schedule of Values -- shall mean the information maintained by the Administrator regarding Members' Insured Property, Insured Values and Assigned Deductibles, which shall be used by the Fund, among other things, in establishing whether a Member's property is Insured Property, and in determining Members' Assessment Shares under the Property Assessment Formulas (see § X, ¶ 3).

1.77.       Shared Administrative Expenses -- shall mean those Administrative Expenses that do not arise directly from the operations of a particular Risk Pool but relate to the Fund generally, or relate to or benefit two or more Risk Pools, and which are allocated pro rata among the Fund's Risk Pools, as provided in § I, ¶ 13.1.5.

1.78.       Services -- shall mean utility services rendered by Members to their Customers involving the provision or delivery of electricity, water, gas or sewer services.

1.79.       Supervisor -- shall mean an Employee's immediate superior in the chain of command and/or the person to whom the Employee is assigned to report.

1.80.       Updated Appraisal -- shall mean the less comprehensive, off-site, computer-updated Annual Appraisal obtained by the Fund in each of the two calendar years between Detailed Appraisals, as provided in § X, ¶ 14, "Appraisals to Establish Insured Values."

2.               Interest and Property Insured.  The Fund, through the Property Pool, agrees to provide General Property Coverage for Property Losses that occur to the Insured Property of a Member (except for Direct Physical Loss or Damage to "Autos", the coverage for which is governed by the terms of § XI) during the Coverage Period (subject to all the terms, conditions, limitations, exceptions, exclusions, provisions and stipulations of this General Property Coverage Section), as follows:

2.1.          Coverage A:  Property Owned or Held by Member.  Coverage A of this Property Coverage Section shall apply to:

2.1.1.     Real and Personal Property.  All real property and appurtenances thereto and improvements thereon, all contents therein, and all personal property of every description, whether the Member's own or held in trust or on consignment or on commission or held in storage or for repairs or sold but not delivered or removed, provided such property is not Leased Property; 

2.1.2.     Legal Liability.  All property for which the Member may be legally liable, provided such liability is not Assumed Liability or Leased Liability; 

2.1.3.     Assumed Liability.  All property for which the Member has Assumed Liability, subject to the Notice requirements of § X, ¶ 12.1.1; 

2.1.4.     Leased Property.  All Leased Property, provided such property is in the Member's Possession at the time of the Property Loss, and subject to the Notice requirements of § X, ¶ 12.1.1; and

2.1.5.     Employees' Property.  All property owned by an Employee (except for Employee Autos which may be covered under § XI under the circumstances set forth therein) which is used or expected to be used, at the request or with the direct or implied approval of the Employee's Supervisor, in connection with a Member's Public Utility Operations;

        Provided, however, that all such property described above must comprise a part of and/or appertain to the Member's Public Utility Operations; and provided further, that, at the time of the Property Loss, the Property constituted Insured Property under the Schedule of Values, ¶ 3; and provided, further, that the Coverages set forth in ¶ 2.1.3 ("Assumed Liability"), 2.1.4 ("Leased Liability") and 2.1.5 ("Employee's Property") shall be deemed "excess insurance" if and to the extent there is Other Insurance (see ¶ 18).

2.2.          Coverage B:  Property-in-Transit.  Coverage B of this Property Coverage Section shall apply to all Insured Property while in transit at a Member's risk within the Coverage Territory, from the time such property leaves the store, warehouse, factory or other initial point of shipment and continuously thereafter, including while on docks, wharves, piers, bulkheads, depots, stations or platforms, until delivered to its destination.

2.3.          Coverage C:  Property-Under-Construction.  Coverage C of this Property Coverage Section shall apply to Insured Property which is Property-Under-Construction, provided that this Property Coverage shall be deemed "excess insurance" with respect thereto, and is subject to ¶ 18 regarding "Other Insurance" if any applicable Other Insurance exists; and provided further, that the Member has timely complied with the Notice provisions of § X, ¶ 12.1.1.

2.4.          Coverage D:  Extra Expense.  Coverage D of this Property Coverage Section shall apply to the necessary Extra Expense incurred by a Member in order to continue as nearly as practicable the Normal operation of the Member's Public Utility Operations following damage to or destruction of real or personal Insured Property by Insured Peril(s) under this Property Coverage Section, including without limitation the Cost of Substitute Service; provided, the damaged Insured Property is or was at the time of the Property Loss on Insured Premises occupied by the Member or used in the Member's Public Utility Operations and listed in the Schedule of Values on file with the Fund's Administrator; provided further, that such Extra Expense Coverage shall be limited to the Period of Restoration and shall cease upon the expiration thereof; provided further, that such Extra Expense Coverage shall not apply unless the Member, with the concurrence of the Fund, elects with due diligence to repair, rebuild or replace the damaged Insured Property.

2.5.          Coverage E:  Expediting Expenses.  Coverage E of this Property Coverage Section shall apply as follows:  To the extent of any Property Coverage remaining under the Property Coverage Limit, after payment of all Property Loss Amounts as may be required under Property Coverages A, B, C and D, and all Property Claim Costs, for the reasonable extra cost of temporary repair, expedited permanent repairs and/or expedited permanent replacement of such damaged Insured Property, including overtime and the extra cost of express or other rapid means of transportation; provided, however, that the Member first obtains approval of the Administrator to incur such "Expediting Expenses" as required by 12.5.

3.               Schedule of Values.

3.1.          Administrator Shall Maintain Schedule of Values of Insured Property.         The Administrator shall maintain a Schedule of Values which reflects for each Member, among other things, the identity of each Item of Insured Property, the Insured Value of such property, the date such Property was acquired by the Member, if applicable, and the Assigned Deductible for such Property.  Except with respect to Newly Acquired Property, Leased Property, Assumed Liability, Property-Under-Construction, and Property inadvertently omitted from the Schedule of Values (see ¶ 3.2.2), the Insured Value of a Member's property shall be the Insured Value identified for the property in the Schedule of Values, as established by Annual Appraisal (see ¶ 14), and such Insured Value shall be adjusted on the Schedule of Values annually by the Administrator based on the results of the Annual Appraisal. 

3.2.          Schedule of Values Establishes Identity of Insured Property for Coverage Purposes.  All property identified in the Schedule of Values shall be deemed Insured Property for which Coverage is provided under this Property Coverage (subject to all the terms, conditions, limitations, exceptions, exclusions, provisions and stipulations of this Property Coverage Section and the Auto Physical Damage Coverage Section); provided, however, that this Property Coverage shall not apply to any property that was not listed in the Schedule of Values at the time a Property Loss to the unlisted property occurred, unless such property falls within one of the exceptions hereto set forth in ¶ 3.2.1 or 3.2.2 below.

3.2.1.     Coverage for Newly Acquired Property, Leased Property, Assumed Liability and Property-Under-Construction Not Listed on Schedule of Values.  Newly Acquired Property, Leased Property, Assumed Liability and Property-Under-Construction shall be deemed Insured Property from the date the Member acquires the Newly Acquired Property, takes possession of the Leased Property, undertakes the Assumed Liability, or begins work on the Property-Under-Construction, even though such property is not listed in the Schedule of Values at the time a Property Loss to the unlisted Property occurs, provided that the Member gives notice and the information identified in ¶ 3.1 herein to the Administrator within the sixty (60) day notice period as required by ¶ 12.1.1 and 12.3.1.

 

3.2.2.     80% Coverage for Property Inadvertently Omitted from Schedule of Values. In the event a Member inadvertently fails to notify the Administrator regarding property to be included in the Schedule of Values, and a Property Loss occurs to the unlisted property, upon written request by the Member and presentation of proof establishing reasonable grounds for such inadvertence, the Administrative Committee, at its discretion, may allow such property to be added to the Schedule of Values retroactively as Insured Property to which this Property Coverage applies; provided however, that this Property Coverage shall only pay 80% of the Property Loss Amount determined in accordance with ¶ 10, "Valuation of Property Loss", subject to the Property Coverage Limit. 

3.3.          Schedule of Values Establishes Insured Values of Insured Property for Assessment Purposes.  The total of the Insured Values of all of a Member's Insured Property listed in the Schedules of Values at the time any Property Assessment is issued, as adjusted per the terms of the applicable Property Assessment Formula, shall be included in calculating such Member's Assessment Share under both the Property General Assessment Formula or the Property Premium Assessment Formula, except as otherwise provided in § I, ¶ 13.5.1 and § X, ¶ 2.4 regarding Property General Assessments for Insured Property with an Assigned Deductible equal to the Property Coverage Limit, or an applicable greater Excess Property Insurance Retention.  The Insured Value for Newly Acquired Property shall be the purchase price of such property, and for Leased Property or Assumed Liability, the Insured Value shall be the value established by the lease or assumption contract, or in the absence thereof, the Actual Cash Value as determined by the Administrator.  The Insured Value for Property-under-Construction shall be the Dollar Percentage-of-Completion of construction at the time the Property Assessment is issued.

4.               Property Coverage Limit. Subject to ¶ 4.1 below regarding the Board’s authority to make modifications in the Property Coverage Limit, and subject to ¶ 4.3 below regarding Extended Property Coverage when the applicable Excess Property Insurance Retention exceeds the Property Coverage Limit, the Fund shall not be obligated to pay an amount in excess of the Property Coverage Limit established by the Board of Directors for one or more Covered Property Claims (including any Covered Auto Claims) arising out of any one Property Loss, irrespective of the number of Members or Employees whose property may be involved in such Property Loss or the total value of their Property Loss Amounts; provided, that all Property Claim Costs incurred in connection with a Covered Property Claim shall be included within the Property Coverage Limit.

4.1.          Property Coverage Limit and Board Modification of the Same.

4.1.1.     Initial Property Coverage Limit. The Fund's initial Property Coverage Limit for a Property Loss shall equal $250,000, less the amount of any applicable Deductible.

4.1.2.     Board Modification of Property Coverage Limit. Notwithstanding the terms of ¶ 4.1.1, the Board may modify the Property Coverage Limit as follows:

4.1.2(a).                  By Super-Majority Vote. The Board may from time to time, prospectively increase or decrease the Property Coverage Limit by Super-Majority Vote; provided, however, that if, by Super-Majority Vote, the Property Coverage Limit is increased to an amount that exceeds the amount of the Maximum Property Retention, the Maximum Property Retention shall be deemed to be automatically increased to be equal to the modified higher Property Coverage Limit, consistent with the requirements of § I, ¶ 13.1.1 and § X, ¶ 4.2, effective as of the effective date of the modification of the Property Coverage Limit.

4.1.2(b).                 By Majority Vote. The Board may from time to time prospectively increase or decrease the Property Coverage Limit by Majority Vote; provided, that   the Property Coverage Limit shall not be increased to an amount that would exceed the amount of the then applicable Maximum Property Retention.

4.1.3.     Documentation and Application of Amended Property Coverage Limit. Any modification to the Property Coverage Limit under this ¶ 4.1 shall thereafter be reflected as provided in § I ¶ 5.7, and § III, ¶ 2.2 of the Operational Rules. Any modification of the amount of the Property Coverage Limit shall not apply to any Property Claim arising from a Property Loss which took place prior to the effective date of the modification, except as permitted in § I, ¶ 5.4.2.2.  

4.1.4.     Coordination of Property Coverage Limit and Excess Insurance Attachment Points. The Board shall attempt to coordinate any changes in the Property Coverage Limit with the Attachment Points of any Excess Property Policy to prevent or minimize any Gaps in Coverage, and where deemed appropriate by the Board, the Board may attempt to acquire Supplemental Excess Property Insurance to fill or minimize any Gaps in Coverage.

4.2.          Maximum Property Retention and Board Modification of the Same. The initial Maximum Property Retention shall equal $250,000.  The Board may also from time to time, by Super Majority Vote, prospectively increase or decrease the Maximum Property Retention, and/or the Designated Property Pool Balance; provided, that the Maximum Property Retention shall never be less than the amount of the Property Coverage Limit.  Any such changes shall thereafter be reflected as provided in § I ¶ 5.7, and § III, ¶ 2.2 of the Operational Rules. 

4.3.          Extended Property Coverage When Applicable Excess Property Insurance Retention Exceeds the Property Coverage Limit and Creates a Gap in Coverage. 

4.3.1.     Automatic Extended Property Coverage. With respect to any Category of Insured Property or Category of Risk that is subject to a stated or defined Excess Property Insurance Retention that exceeds the amount of the then applicable Property Coverage Limit, thereby creating a Gap in Coverage, and which is therefore subject to a Mandatory Deductible as provided in § X, ¶ 7.2.1, the Property Coverage shall automatically be extended as follows:

4.3.1(a).                  Coverage Up to Property Coverage Limit. After the Member suffering the Property Loss pays or absorbs the amount of the applicable Automatic Mandatory Deductible, the Property Pool shall pay for the remainder of the Loss up to the amount of the Property Coverage Limit.

4.3.1(b).                 Maximum Full Extended Property Coverage at 100% for Gap in Coverage for Property Loss Amounts that Exceed the Coverage Limit. If the Property Loss Amount exceeds the Property Coverage Limit, the Property Pool shall continue to provide Property Coverage for the Loss at 100% up to the Maximum Extended Property Coverage amount of $750,000, or the amount of the applicable stated or defined Excess Property Insurance Retention, whichever is less.

4.3.1(c).                  Maximum Partial Extended Property Coverage at 50% for Property Loss Amounts That Exceed the Amount of the Maximum Full Extended Property Coverage. If and to the extent that the amount of the Property Loss exceeds the Maximum Full Extended Property Coverage amount of $750,000, the Property Pool shall continue to provide Property Coverage at fifty (50%) percent of such amount up to the amount of the applicable Excess Property Insurance Retention.

4.3.2.     Discretionary Extended Property Coverage. If Coverage for Property Loss Amount and Property Claim Costs under the applicable Excess Property Policy with respect to a particular Covered Property Claim does not begin at the point the Fund has paid the total amount of its Property Coverage Limit, including Property Claim Costs, and if the Property Loss Amount and the amount of the Property Claim Costs exceed the Property Coverage Limit, then the Board may, for Sufficient Cause, by Super-Majority Vote, increase the Property Coverage Limit for such Claim in an amount within its discretion, up to a maximum of $250,000 of additional Coverage for the Claim, including Property Claim Costs. 

5.               Coverage Territory.  This General Property Coverage is limited to all Insured Property located within the United States, except for Property-In-Transit, with respect to which this General Property Coverage shall apply worldwide.

6.               Perils Insured Against.  This General Property Coverage covers a Member's Insured Property against all risks of Direct Physical Loss or Damage occurring while the Member is a Member of the Property Pool, except for the Perils Excluded in ¶ 9 hereinafter, and subject to the conditions, limitations, exceptions, provisions and stipulations of this General Property Coverage Section. 

7.               Deductibles. Coverage for all claims by a Member for loss, damage or expense arising out of any one Property Loss to an Item of Insured Property under Coverage A ("Property Owned or Held By Member") shall be adjusted as one Covered Property Claim, and from the amount of Coverage available under the Property Coverage Limit for each such Claim, there shall be deducted the sum of the applicable Deductible, either an Assigned Deductible or a Mandatory Deductible. If a Property Loss is not subject to a Mandatory Deductible under ¶ 7.2 below, it shall be deemed subject to its Assigned Deductible determined in accordance with ¶ 7.1 below; provided, however, that an Assigned Deductible that exceeds the amount of the applicable Mandatory Deductible shall be the Deductible that is applied to the Property Loss. In the event a Property Loss involves Insured Property of a Member that has different Assigned Deductibles per the Schedule of Values, the largest Assigned Deductible will be applied.  If a single Property Loss involves Insured Property of more than one Member, the amount of Coverage available under the Property Coverage Limit shall be reduced by the total of all Members' Deductible amounts. 

7.1            Assigned Deductibles. 

7.1.1       Member Selection of Assigned Deductibles.  A Member may select an Assigned Deductible, which shall be either $250, $500, $1,000, $5,000, $10,000 $25,000, $50,000 or $75,000, or the amount of the Property Coverage Limit, to be applied to an Item of Insured Property, and the Assigned Deductibles selected by the Member for the Member's Insured Property shall be entered by the Administrator in the Schedule of Values. 

7.1.2       Assignment of Deductibles in Absence of Member Selection. If a Property Loss involves damage to Insured Property that is Covered under this Property Coverage for which no Assigned Deductible has been established in the Schedule of Values, the Deductible applicable to such property shall be the Member's Assigned Deductible for its Insured Property listed in the Schedule of Values most closely resembling the damaged property, as determined by the Administrator.

7.2            Mandatory Deductibles. Property Coverage for Categories of Insured Property or Categories of Risk that are subject to Excess Property Insurance Retentions that exceed the Property Coverage Limit shall be subject to an Automatic Mandatory Deductible determined in accordance with ¶ 7.2.1 below. Such Automatic Mandatory Deductible shall supercede any inconsistent Assigned Deductible, unless the amount of the Assigned Deductible exceeds the amount of the applicable Mandatory Deductible, in which event, the Assigned Deductible shall control.

7.2.1       Categories of Insured Property and Categories of Risk Subject to an Automatic Mandatory Deductible and Determination of Amount of Same. In consideration of the Automatic Extended Property Coverage available for Property Losses that exceed the Property Coverage Limit where there is a Gap in Coverage (see ¶ 4.3.1 above), each Property Loss that is subject to an Excess Property Insurance Retention that exceeds the Property Coverage Limit shall be subject to an Automatic Mandatory Deductible in an amount equal to 15% of the amount of the maximum applicable Excess Property Insurance Retention.

           

7.2.2       Discretionary Mandatory Deductibles for Items of Insured Property or Perils That Are Not Subject to an Automatic Mandatory Deductible. In addition to the Automatic Mandatory Deductibles applicable under ¶ 7.2.1 above, from time to time the Executive Committee, upon recommendation of the Administrative Committee, may determine that it is appropriate to establish a Discretionary Mandatory Deductible, in a specified amount, with respect to one or more types of Insured Property or Insured Perils that are not otherwise subject to an Automatic Mandatory Deductible.

7.2.2(a)                   Procedure for Establishing a Discretionary Mandatory Deductible. Any such Discretionary Mandatory Deductible shall be established pursuant to issuance by the Administrative Committee, on behalf of the Executive Committee, of a Procedural Memorandum identifying the Insured Property or Insured Peril(s) subject to the Discretionary Mandatory Deductible, stating the amount of the Mandatory Deductible and the effective date of the same. Thereafter, such Discretionary Mandatory Deductible shall be effective and applicable for all purposes under the SIA, subject to modification or reversal by the Board pursuant to ¶ 7.2.2(b) below.

7.2.2(b)                   Board Modification or Reversal of Discretionary Mandatory Deductible and Effect of the Same. Any Discretionary Mandatory Deductible establish pursuant to ¶ 7.2.2(a) above is subject to modification or reversal, including reversal retroactive to the effective date of the Procedural Memorandum that established such Deductible, by Majority Vote of the Board at any time. In the event that the Board reverses a Discretionary Mandatory Deductible retroactive to the effective date of the Procedural Memorandum that established such Deductible, such Mandatory Deductible shall not be applied to any Property Loss that occurred when such Discretionary Mandatory Deductible was in effect pursuant to the Procedural Memorandum, as if such Mandatory Deductible had never existed; provided, however, that any Property Assessments levied from the effective date of the Procedural Memorandum until the date of any retroactive reversal thereof by the Board, shall not be recalculated to exclude consideration of such Mandatory Deductible. Any Mandatory Deductible established by the Executive Committee pursuant to Procedural Memorandum may also be modified or reversed by the Executive Committee, at the Committee’s discretion, without a Vote of the Board, by issuance of a Procedural Memorandum providing for the same. 

                                               

7.2.3       Changes Re Mandatory Deductibles.

7.2.3(a)                   Automatic Changes Re Categories of Insured Property or Categories of Risk Subject to an Automatic Mandatory Deductible. The Categories of Insured Property and Categories of Risk subject to an Automatic Mandatory Deductible under ¶ 7.2.1 above, shall depend upon, and shall be coextensive from Excess Property Policy Year-to-Policy Year with, the Categories of Insured Property and Categories of Risk in the Excess Property Policy then in effect that are subject to an Excess Property Insurance Retention that exceeds the amount of the Property Coverage Limit.

7.2.3(b)                   Discretionary Changes Re Insured Property or Perils Subject to an Automatic Mandatory Deductible. Notwithstanding the provisions of ¶ 7.2.1 above, by Super-Majority Vote, the Board may prospectively modify or terminate any otherwise applicable Automatic Mandatory Deductible. In event such a Deductible is terminated, the Deductible applicable to such Insured Property or Peril shall be the Deductible assigned thereto within 60 days of the Boards decision by any Member having such Property, and in the absence of such assignment by the Member, the Deductible shall be as determined pursuant to ¶ 7.1.2 above.

                                   

7.3            Property Deductible Credits. Based on the levels of Assigned Deductibles and any Mandatory Deductibles applicable to a Member, that Member will be entitled to certain Property Deductible Credits in accordance with the Property General Assessment Formula (see § XII, ¶ 3), but such Property Deductible Credits shall not apply to Assessments made under the Property Premium Assessment Formula. 

8.               Property Excluded.  This Property Coverage Section excludes Coverage for:

8.1            Currency, money, deeds, title, bills, notes, securities, jewelry, precious or semi-precious stones, gold, silver, platinum and other precious alloys or metals (except platinum in processing vessels), furs, and fine arts;

8.2            Land, land values, land restoration; however, this Exclusion shall not apply to the cost of reclaiming, restoring, or repairing land improvements.  "Land improvements" are defined as any alteration to the natural condition of the land by grading, landscaping, earthen dikes or dams, as well as additions to land such as pavements, roadways, or similar works;

8.3            Aircraft and their contents; satellites and/or spacecraft and their contents;

8.4            Motor vehicles and/or trailers licensed for use on public highways and their contents (except contents on or in such vehicles and/or trailers consigned to or to be shipped by the Member while not under control of a common carrier) (see Auto Physical Damage Coverage, § X, where such vehicles may be Covered);

8.5            Hulls or waterborne vessels of every type, nature and description greater than 26 feet in length, and their contents;

8.6            Railroad or railway rolling stock and their contents (except contents on or in such rolling stock consigned to or to be shipped by the Member while not under the control of a common carrier);

8.7            Reservoir contents; and property that constitutes the subject of Members' Services (e.g., water, electricity, gas and sewer), but this Exclusion shall not apply to the Cost of Substitute Service;

8.8            All property specifically insured elsewhere pursuant to the terms of another insurance policy, except as provided in ¶ 18, "Other Insurance."

8.9            Any refractory lining or catalyst, except from the perils of fire, lightning, windstorm, hail, explosion, riot, strike, civil commotion, aircraft, vehicles, smoke, flood, and earthquake;

8.10         Crude oil, natural gas or other minerals prior to recovery above ground and coal;

8.11         Underground tanks, except for water and sewage tanks;

8.12         Drilling and producing platforms, including rigs, derricks and equipment;

8.13         Property located offshore or beyond the shoreline in Gulf of Mexico, and off Texas and Louisiana, "offshore and beyond the shoreline" is to seaward of the inland edge of the Lease Block of the Plane Coordinate System, as defined on United States Department of the Interior, Bureau of Land Management Offshore Leasing Maps.  Elsewhere, offshore shall mean the sea coasts of United States including Alaska, except that structures and their contents extending from land or shore are not to be considered as offshore;

8.14         Transmission or distribution lines or water or sewer pipes or systems or other similar means of delivering the subject of Members' Services (i.e., electricity, water, gas or sewer) to their Customers, and their supporting structures, distribution transformers, metering equipment, and accessories, other than those on or within 1,000 feet of any Insured Property constituting a structure or fixture on or under real property in which a Member has an interest.

8.15         Property of a Member rented or leased to Third Parties while away from the premises of the Member.

8.16         Motor vehicles and conveyances constituting Autos under the Auto Physical Damage Coverage Section.

           

9.               Perils Excluded.  This General Property Coverage Section does not provide Coverage against:

9.1            General Perils Exclusions.

9.1.1       Misappropriation, secretion, conversion, embezzlement, infidelity or dishonesty of the Member or any of its Employees; nor loss or damage resulting from the Member voluntarily parting with title or possession of any Insured Property if induced to do so by any fraudulent scheme, trick, device or false pretense; nor any unexplained loss, mysterious disappearance, or loss or shortage disclosed on taking inventory;

9.1.2       Cost of making good faulty or defective material, faulty workmanship, errors or omissions in design, errors in processing or manufacture of the Member's Services or any Products;

9.1.3       Delay, loss of market, gradual deterioration, depletion, inherent vice, latent defect, ordinary wear and tear, dampness or dryness of atmosphere, extremes of temperature, smog, shrinkage, evaporation, loss of weight, rust, corrosion, erosion, wet or dry rot, change in flavor or color or texture or finish; loss or damage caused by or resulting from moth, vermin, termites or other insects;

9.1.4       Loss or damage by normal settling, cracking, shrinkage, bulging or expansion in foundations, walls, floors or ceilings;

9.1.5       Fines or penalties incurred or sustained by or imposed on the Member at the order of any Government Agency, Court or other governmental authority arising from any cause whatsoever;

9.1.6       Pollution or contamination, but this Exclusion shall not apply to the necessary and reasonable expenses actually incurred by the Member to clean-up and remove Pollution from the land or water confined to the Members' Insured Premises if the release, discharge or dispersal of the Pollution is caused by or results in fire, lightening, removal, wind and hail, leakage from fire protective equipment, explosion, smoke, aircraft and vehicles, sonic shock wave, riot, civil commotion and vandalism, molt material, or civil or military authority which occurs during the time the Member was a member of the Property Pool;

9.1.7       Seepage;

9.1.8       Spillage or leakage, including the cost of clean-up operations, unless resulting from an Insured Peril(s) which causes Direct Physical Loss or Damage to the tanks, taps or pipes, provided that the cost of such clean-up operations shall not cover expenses of removal of any property or debris which discharges, releases, or escapes into or upon any watercourse or body of water whether above or below ground, nor expenses of removal of any property or debris located off the premises of the Member;

9.1.9       Asbestos material removal unless the asbestos is itself damaged by fire, lightning, aircraft impact, explosion, riot, civil commotion, smoke, vehicle impact, windstorm or hail, vandalism, malicious mischief, leakage or accidental discharge from automatic fire protective systems, but only for the cost of removing the asbestos that was damaged;

9.1.10    Demolition or increased cost of reconstruction, repair, debris removal or loss of use necessitated by the enforcement of any law or ordinance regulating asbestos material;

9.1.11    Any governmental direction, mandate or request declaring that the asbestos material present in or part of or utilized on any undamaged portion of the Member's property can no longer be used for the purpose for which it was intended or installed and must be removed or modified;

9.1.12    Loss or damage caused directly or indirectly by:

9.1.12(a)                Hostile or warlike action in time of peace or war, including action in hindering, combating or defending against an actual impending or expected attack: (i) by any government or sovereign power (de jure or de facto) or by any authority maintaining or using military, naval or air forces, (ii) by military, naval or air forces, and (iii) by an agent of any such government, power, authority or forces;

9.1.12(b)                Any weapon of war employing atomic fission or radioactive force whether in time of peace or war;

9.1.12(c)                Insurrection, rebellion, revolution, civil war, usurped power, or action taken by governmental authority in hindering, combating or defending against such an occurrence, seizure or destruction under quarantine or Customs regulations, confiscation by order of any government or public authority, or risks of contraband or illegal transportation or trade;

9.1.13    Loss or damage caused directly or indirectly by nuclear reaction or nuclear radiation or radioactive contamination, whether controlled or uncontrolled, and whether such loss be direct or indirect, proximate or remote, or be in whole or in part caused by, contributed to, or aggravated by any Insured Peril(s) in this General Property Coverage Section; however, subject to the foregoing and all provisions and limitations of this General Property Coverage Section, direct loss by fire resulting from nuclear reaction or nuclear radiation or radioactive contamination is Covered by this General Property Coverage Section;

9.1.14    Loss or damage caused by or resulting from freezing of plumbing, heating or fire protection systems in properties owned or leased by Members if such property has not been used in the Member's Public Utility Operations within thirty (30) days prior to the date of loss or damage;

9.1.15    Lack of power, light, heat, steam or refrigeration;

9.1.16    Leakage at any valve, fitting, shaft seal, packing gland, joint or connection;

9.1.17    As respects any boiler, fired or unfired vessel, refrigerating system of piping, the Fund's General Property Coverage shall be deemed "excess insurance", and the Fund shall not be liable for a Property Loss to such property while it is undergoing a hydrostatic, pneumatic or gas pressure test to the extent there is coverage therefor by Other Insurance;

9.1.18    As respects any electrical machine or electrical apparatus, the Fund's General Property Coverage shall be deemed "excess insurance", and the Fund shall not be liable for a Property Loss while said property is undergoing an insulation breakdown test or is being dried out to the extent there is Coverage therefor by Other Insurance;

9.1.19    As respects any Insured Property that constitutes Equipment, the Fund shall not be liable for loss or expense resulting from Direct Physical Loss or Damage to such Property occurring prior to the time such Property has been completely (a) installed, (b) tested and (c) accepted by or is at the risk of the Member, unless otherwise specifically provided in this General Property Coverage Section.

9.1.20    Any cracking of Insured turbines or part thereof unless the cracking at the time of its occurrence immediately prevents continued safe operation of the Insured Property.

9.2            Additional Exclusions Applicable to Electronic Data Equipment and Media.  The Exclusions within this paragraph apply to Coverage A only:  "Property Owned or Held by Member."  This General Property Coverage Section does not provide Coverage against:

9.2.1       Dryness or dampness of atmosphere, extremes of temperature, corrosion, or rust unless directly resulting from Direct Physical Loss or Damage to the electronic equipment system's air conditioning facilities, provided such is Insured Property;

9.2.2       Interruption of power supply, power surge, blackout or brown-out, if the cause of such occurrence took place more than 100 feet from an Insured Premises;

9.2.3       Electrical or magnetic injury, disturbance or erasure of electronic recordings, if the cause of such occurrence took place more than 100 feet from an Insured Premises;

9.2.4       Error or omissions in machine programming or instructions to machine.

9.3            Additional Exclusions Applicable to Property-in-Transit.  The Exclusions in this paragraph apply to Coverage B only:  "Property-In-Transit".  This General Property Coverage Section does not provide Coverage against:

9.3.1       Loss or damage resulting from inadequate packing or improper preparation for shipment or from insecure stowage when not stowed by the carrier;

9.3.2       Loss, damage or expense caused by or resulting from loss of use, or interruption of the Member's Public Utility Operations;

9.3.3       Loss, damage or expense caused by or resulting from strikes, lockouts, labor disturbances, riots, civil commotions, civil disobedience, or the acts of any persons taking part in any such occurrence or disorder occurring away from any Insured Premises;

9.3.4       Import shipments except only after Marine Insurance has ceased to cover, nor export shipments after laden on board export conveyance or under the protection of Marine Insurance, whichever occurs first;

9.3.5       Shipments by mail or parcel post;

9.3.6       Loss caused by neglect of the Member to use all reasonable means to save and preserve the Insured Property at and/or after any disaster constituting an Insured Peril(s).

9.4            Exclusion re Losses to Partially Exempt Insured Property. Any Property Loss to Insured Property that constitutes Partially Exempt Insured Property under the terms of § XII, ¶ 2.3.5 to the extent such Loss occurs to Insured Property in an Exempt Category of Insured Property or results from a Peril in an Exempt Category of Risk.

                                     

10.            Valuation of Property Loss.  The following Valuation of Property Loss provisions shall apply in determining Property Loss Amounts under this General Property Coverage Section (see also, § X, ¶ 28, "Fund's Coverage Options") with respect to all property coverages:

10.1         Coverages A and B only ("Property Owned or Held by Member" and "Property-in-Transit". 

10.1.1    Buildings and Structures.  Buildings and other structures, including Property-Under-Construction (see ¶ 10.3), at Replacement Cost at the time and place of the Property Loss if actually rebuilt or repaired; and such rebuilding or repair commences within six (6) months from the date of the Property Loss; otherwise, unless the Member elects to repair, build or replace the damaged insured property within six (6) months from the date of the Property Loss, the Fund's obligations under this General Property Coverage shall be to pay actual cash value for the damage to the Insured Property on the date of the Property Loss; provided, however, that if the Member subsequently repairs or rebuilds the damaged Property, the Fund will pay the Member the difference between the Actual Cash Value already paid to the Member and the amount of Replacement Cost coverage at the time and place of the Property Loss, regardless of the Member's actual repair or rebuilding cost. 

10.1.2    Leasehold Improvements.  Leasehold improvements and betterments, at Replacement Cost at the time and place of the Property Loss if actually repaired or replaced; if not repaired or replaced, at Actual Cash Value on the date of the Property Loss;

10.1.3    Legal Liability.  Property for which a Member is legally liable, provided such liability was not Assumed Liability or Leased Property, at the amount of the established legal liability or Fair Market Value at the time and place of the Property Loss, whichever is greater;

10.1.4    Assumed Liability or Leased Property.  Assumed Liability or Leased Property (except leased Electronic Equipment, see 10.1.9), at the amount established in the assumption contract or lease, or in the absence thereof, at Fair Market Value at the time and place of the Property Loss, after reduction of the Property Loss Amount by the amount of any available Other Insurance pursuant to ¶ 18;

10.1.5    Employee's Property.  Employee's Property (except for Employee Autos) used in connection with the Member's Public Utility Operations, at Replacement Cost on the date of the Property Loss; provided, however, that this General Property Coverage shall be limited to $5,000 per Property Loss for all Employees' Property (but this limitation shall not apply to Employee Autos);

10.1.6    Machinery, Equipment and Other Insured Property.  Machinery, equipment and any other Insured Property not otherwise specifically provided for herein, at Replacement Cost at the time and place of the Property Loss if actually repaired or replaced; if not repaired or replaced, at Actual Cash Value on the date of the Property Loss;

10.1.7    Electronic Equipment.  The Fund's obligation to provide Coverage under this General Property Coverage Section for a Property Loss to electronic equipment (except for leased electronic equipment, see ¶ 10.1.9) shall not exceed the smallest of the following amounts:

10.1.7(a)                The Actual Cash Value at the time of loss or damage to the Insured Property or the Actual Cash Value of property which is similar in kind to the Insured's Property that was damaged or;

10.1.7(b)                The amount for which the Member could reasonably be expected to have the Insured Property repaired to its condition immediately prior to the Property Loss; or

10.1.7(c)                The amount of the Property Coverage Limit.

10.1.8    Electronic Equipment Lease Agreements.  The Member agrees to give to the Administrator a copy of any lease agreement or change in any agreement pertaining to the Electronic Equipment leased to the Member within thirty (30) days after accepting such agreement or change of agreement.  The Member also agrees to give the Fund Administrator thirty (30) days notice of any alteration, cancellation or termination of any lease agreement pertaining to the lessor's liability.

10.1.9    Payment of Difference in Coverages for Rented Electronic Equipment.  If Electronic Equipment is leased to the Member, this General Property Coverage shall be for the difference between the amount of the protection afforded by the lessor under any hold harmless provisions of the rental agreement or any applicable Other Insurance and the Coverage provided under this General Property Coverage Section.  In any event, the Fund shall only be obligated to pay an amount for damaged leased electronic equipment equal to the Fair Market Value thereof, or the amount provided therefor in the equipment lease, whichever is greater.

10.1.10Electronic Media.  The Property Loss Amount shall not exceed the actual reproduction cost of the Insured Property; if not replaced or reproduced, then the blank value of such media; all subject to the Property Coverage Limit.  The term "Media" shall include all forms of converted data and/or programs and/or instruction tapes used in the Member's Public Utility Operations.

10.2         Coverage B: "Property-in-Transit."  The Insured Property shall be valued at actual invoice cost, including prepaid or advanced freight, if any, together with such costs and charges (including the commission of the Member as selling agent, if any, but excluding duty or tariff), as may have accrued and become legally due thereon.  In the event of there being no invoice, the valuation of the merchandise Covered under this General Property Coverage shall be the Replacement Cost of the Insured Property at point of destination on the date of the Property Loss.

10.3         Coverage C: "Property-under-Construction".  The Insured Property shall be valued at Replacement Cost at the time and place of the Property Loss if actually repaired or replaced, if not repaired or replaced, then based on the Dollar Percentage-of-Completion at the time and place of the Property Loss.

11.            Limitations.  [Reserved]

12.            Coverage Conditions. 

12.1         Conditions Applicable to Coverage A Only: "Property Owned or Held by Member" (Regarding Newly Acquired Property, Leased Property and Assumed Liability).

12.1.1    Coverage Conditions/Notice.  This General Property Coverage applies to Newly Acquired Property, Leased Property, and any Assumed Liability with respect to Insured Property at any location within the Coverage Territory provided that the Member notifies the Administrator, and provides the information identified in ¶ 3.1, as follows:  (a) for Newly Acquired Property with a value in excess of $10,000, within sixty (60) days of the date of acquisition; (b) for Leased Property with a value in excess of $10,000, within sixty (60) days of the date the Member takes Possession of such Leased Property; and (c) for Assumed Liability for property with a value in excess of $10,000, within sixty (60) days of such assumption.  So long as such Notice is provided to the Administrator within the 60-day Notice period, even if a Property Loss has occurred to such property in that time period, the property shall be deemed to have been Insured Property, and this General Property Coverage shall be deemed to have attached, retroactive to the date of such acquisition, Possession or assumption.  In addition, with respect to Leased Property and Assumed Liability for property with a value of $10,000 or greater, at the time of providing such Notice to the Administrator, the Member will also provide the Administrator with a copy of the relevant lease or assumption agreement.  If such Notice is provided after the 60-day Notice period, the Newly Acquired Property, Leased Property and/or Assumed Liability shall not be Covered under this General Property Coverage Section until 12:01 a.m. on the day after such Notice and information is in fact provided to the Administrator.

12.1.2    Follow-Up Assessment for Insured Property Not Listed in the Schedule of Values at the Time of a Property Assessment.  In the event a Property General Assessment is issued within sixty (60) days after the date a Member has acquired Newly Acquired Property, taken Possession of Leased Property or contracted for the Assumed Liability, and such property is not listed in the Schedule of Values at the time the Assessment is issued, and provided the Member has given the Administrator Notice thereof as required in ¶ 12.1.1 within the sixty (60) days Notice period but after such Assessment has issued, after the 60th day following such Property Assessment, the Administrator shall issue a Follow-Up Assessment to such Member(s) based on the Insured Value(s) of such property determined in accordance with ¶ 3.3 calculated on the Member's Formula Components under the Property General Assessment Formula in effect on the date the initial Property General Assessment was issued.

12.2         Conditions Applicable to Coverage B Only:  "Property-in-Transit."

12.2.1    Claim Against Common Carrier.  In the event of any loss or damage to the goods and/or merchandise that is Insured Property-in-Transit, the Member shall immediately make claim in writing against the common carrier or carriers involved.

12.2.2    Impairment of Fund's Recovery Rights.  The Fund shall not be obligated to provide General Property Coverage for any loss or damage to Insured Property which, without its written consent, has been settled or compromised by the Member.  Any act or agreement by the Member before or after the Property Loss whereby any right of the Member to recover in whole or in part for loss or damage to the Insured Property-in-Transit against any carrier, bailee or other party liable therefor, is released, impaired or lost, shall release the Fund's obligations under this General Property Coverage Section to the extent the Fund has been prejudiced thereby.  It shall, however, be permissible for the Member, without prejudice to its Property Coverage hereunder, to accept the ordinary Bills of Lading or Shipping Receipts issued by carriers limiting their liability to less than the actual value of the Insured Property, subject to ¶ 18, "Other Insurance."

12.3         Conditions Applicable to Coverage C Only:  "Property-Under-Construction."

12.3.1    Coverage Conditions/Notices.  This General Property Coverage Section shall apply to Property-Under-Construction at any location within the Coverage Territory; provided that, except for Property-Under-Construction for a contract price of less than $25,000, the Member notifies the Administrator and provides the information identified in ¶ 3.1 within sixty (60) days of the date construction was commenced.  So long as such Notice is provided to the Administrator within the 60-day Notice period, even if a Property Loss has occurred to such property in that time period, the Property-Under-Construction shall be deemed to have been Insured Property, and this General Property Coverage shall be deemed to have attached, retroactive to the date of commencement of construction.  If Notice is provided after the sixty (60) day Notice period, the Property-Under-Construction shall not be covered under this General Property Coverage Section until 12:01 a.m. on the day after such Notice and information is in fact provided to the Administrator.

12.3.2    Follow-Up Assessment for Insured Property-Under-Construction Not Listed in the Schedule of Values at the Time of a Property Assessment.  Property-Under-Construction with a value or contract price of $25,000 or greater shall be subject to a Follow-Up Assessment under the circumstances and determined according to ¶ 12.1.2 regarding "Newly Acquired Property," etc.

12.4         Conditions Applicable to Coverage D Only:  "Extra Expense."

12.4.1    Description of Coverage.  This General Property Coverage Section covers the necessary Extra Expense incurred by a Member in order to continue as nearly as practicable the Normal operation of the Member's Public Utility Operations following damage to or destruction of real or personal Insured Property by an Insured Peril(s) under this General Property Coverage Section, provided such Insured Property is on Insured Premises occupied by the Member.

12.4.2    Required Physical Damage to Insured Property.  No Property Claim shall be sustained with respect to Extra Expense unless it arises out of Direct Physical Loss or Damage to Insured Property. 

12.4.3    Period of Restoration.  In the event of such a Property Loss, the Fund shall be obligated to provide General Property Coverage for such necessary Extra Expense for the time during the Period of Restoration,  commencing with the date of the Property Loss and ceasing with the Member's Resumption of Operations (see ¶ 12.4.4).  Such Extra Expense Coverage shall not be forfeited solely because the Member sustaining the Property Loss has withdrawn from Membership in the Property Pool since the Property Loss occurred.

12.4.4    Resumption of Operations.  It is a condition of this General Property Coverage Section that as soon as practicable, the Member shall resume its Normal Public Utility Operations and shall dispense with such Extra Expense Coverage.  "Resumption of Operations" shall be deemed to have occurred when the Member, acting with due diligence and dispatch, should have completed the repairs, rebuild or replacement and resumed Normal Public Utility Operations.

12.4.5    Interruption by Civil Authority.  This General Property Coverage Section includes the actual loss sustained by a Member, resulting directly from an interruption of the Member's Public Utility Operations as Covered hereunder, during the length of time, not exceeding two (2) consecutive weeks, when, as a direct result of damage to or destruction of property adjacent to any of the Insured Premises by any Insured Peril(s), access to the Insured Premises is specifically prohibited by order of civil authority.

12.4.6    Special Exclusions and Limitations.  The Fund shall not be obligated to provide General Property Coverage for any Extra Expense resulting from:

12.4.6(a)                Enforcement of any local or state ordinance or law regulating the construction, repair or demolition of buildings or structures, or interference at the Insured Premises, by strikers or other persons, with rebuilding, repairing or replacing the Insured Property or with the resumption of Normal Public Utility Operations;

12.4.6(b)                Nor shall the Fund by obligated to provide General Property Coverage for:  (i) loss of income (except this Exclusion shall not be construed to apply to the Cost of Substitute Service); or (ii) the cost of repairing or replacing any of the real or personal Insured Property herein described, or the cost of research or other expense necessary to replace or restore damaged or destroyed books of account, abstracts, drawings, card index systems or other records (including film, tape, disc, drum, cell and other magnetic recording or storage or storage media for electronic data processing or storage media for electronic data processing), that have been damaged or destroyed by an Insured Peril(s) except cost in excess of the normal cost of such repair, replacement or restoration necessarily incurred for the purpose of reducing the Property Loss Amount under this General Property Coverage Section.  In no event shall such excess cost exceed the amount by which the total Extra Expense Coverage otherwise payable under this General Property Coverage Section is thereby reduced; or (iii) any other consequential or remote loss.

12.5         Conditions Applicable to Coverage E Only:  "Expediting Expenses."  The Fund shall not be obligated to provide Property Coverage for any "Expediting Expenses" unless the Member first obtained the approval of the Administrator for the Member to incur such expenses; provided, however, that such expenses are not subject to this prior approval requirement to the extent they are incurred in an "emergency."  For purposes of this paragraph, "emergency" shall mean circumstances under which it is impractical or prejudicial to the Member to obtain such prior approval before incurring the Expediting Expense, as determined by the Administrative Committee.  The Administrator shall have the authority to refuse to approve any Expediting Expenses where, in the opinion of the Administrator, such expediting measures will not reduce the Property Loss Amount the Member will otherwise sustain

13.            Order of Coverage Payments.  Coverage Payments within the Property Coverage Limit for any single Property Loss shall be determined in the fixed order of descending priority set forth below, and the portion of the Property Coverage Limit applicable to each Coverage of this General Property Coverage Section shall be to the extent of any balance remaining under the Property Coverage Limit after payment of all loss or damage as may be required under all preceding Property Coverages.  For purposes of this paragraph, Property Losses to Covered Autos under the Auto Physical Damage Coverage Section (§ XI) shall be paid under Coverage A.  If multiple Members are involved in a Property Loss, each Member shall be paid in full for the portion of its Property Loss Amount allocable to Coverage A before any Member is paid its share of its Property Loss Amount allocable to Coverage B, and so on.  If the balance remaining under the Property Coverage Limit at any particular Coverage level is not sufficient to pay the total of all Member's Property Loss Amounts allocable to that Coverage level, then each Member shall share in the remaining balance under the Property Coverage Limit in the ratio that each Member's Property Loss Amount allocated to that Coverage level bears to the total of all Members at that Coverage level.  This process will continue until Coverage for the Property Loss under the Property Coverage Limit is exhausted or all Coverage Payments are made, whichever first occurs.

13.1         Coverage A - Property Owned or Held By Member;

13.2         Coverage B - Property-in-Transit;

13.3         Coverage C - Property-Under-Construction;

13.4         Coverage D - Extra Expense;

13.5         Coverage E - Expediting Expenses.

14.            Appraisals to Establish Insured Values.  The current Insured Values of each Member's Insured Property shall be established by Annual Appraisals obtained by the Fund and paid for by the Property Pool.  For the year in which the Property Pool is first established, and at the beginning of every third calendar year thereafter, the Fund shall obtain a Detailed Appraisal of the property identified by each Member to be insured under the Fund's Property Coverage.  For the two intervening years, at the beginning of each such calendar year, the Fund shall obtain an Updated Appraisal of each Member's property listed in the Schedule of Values at the time the Updated Appraisal occurs

15.            Permission Clauses.  Permission is hereby granted for a Member to do all things deemed necessary to pursue its Public Utility Operations, including but not limited to:

15.1         For other insurance;

15.2         To do such work and to make such changes in the use or occupancy of the Insured    Premises as is usual and/or incidental to the Public Utility Operations of the Member;

15.3         To make alterations, additions, improvements and repairs to Insured Property;

15.4         To work at any and all times;

15.5         To shutdown or cease operations and for individual buildings to remain vacant or unoccupied without limit of time, but an entire plant cannot cease operations, be vacant, or unoccupied for a period exceeding thirty (30) days at any one time;

15.6         When not in violation of any law, statute or municipal restriction, to do such work and to keep and use in the Insured Premises in unlimited quantities all such articles, materials, supplies and apparatus as may be necessary in Member's Public Utility Operations;

15.7         For motor vehicles to enter the Insured Premises for loading and other purposes.

16.            Determination of Number of Property Losses

16.1         Multiple Perils.  All loss or damage to Members' Insured Property arising from the same Insured Peril shall be deemed a single "Property Loss" (see § X, ¶4).  All Property Loss from an Insured Peril constituting a natural disaster also shall be a single Property Loss hereunder; provided that, if additional, continued or new Property Loss resulting from the initial or a similar Insured Peril occurs within a continuous period of seventy-two (72) hours after the initial Property Loss, the Property Losses from all such Insured Peril(s) shall be deemed to be a single Property Loss, regardless of the number of Members suffering such Losses.  A single Property Loss shall not be deemed more than one Property Loss solely because the Insured Property of more than one Member and/or Employee is involved in the Property Loss.  The Fund shall not be liable for any Property Loss caused by any Insured Perils occurring before the date a Member becomes a Member of the Property Pool, or any Property Loss occurring after the effective date of a Member's Withdrawal from the Property Pool.

16.2         Board's Authority to Establish the Number of Property Losses Involved in a Covered Property Claim.  The Board shall have the authority, by Super-Majority Vote, to establish the number of Property Losses involved in connection with any Covered Property Claim and such determination shall be binding on all Members involved in the Property Claim; provided, however, that in making its decision the Board shall consider the advice of General Counsel regarding the applicable loss; and provided further, that the Board's failure to affirmatively establish the number of Property Losses with respect to a Covered Property Claim shall result in the Claim being treated as a single Property Loss by the Fund; and provided further, that any Dispute with the result of the Board's Vote may be submitted to Arbitration pursuant to § I, ¶ 24.4 and the Arbitrator's shall affirm the Board's decision unless it is contrary to clearly established Washington law.

17.            Debris Removal Expense.  This paragraph only applies to Coverages hereunder for Direct Physical Loss or Damage to Insured Property. This General Property Coverage Section covers expenses incurred in the removal of all debris from the Insured Premises, which may be occasioned by Property Loss caused by any of the Insured Perils.  However, the Fund's total liability under this General Property Coverage Section for both loss to Insured Property and removal of debris shall not exceed the Property Coverage Limit.  The Fund shall not be liable for more than the proportion of such Debris Removal Expense as the amount available to the Member under the Property Coverage Limit bears to the total amount of Other Insurance on the property covered hereunder, whether or not all such Other Insurance includes this clause.  The Fund shall not be liable for Debris Removal Expense occasioned by the enforcement of any federal, state or municipal laws or ordinances which necessitate the demolition of any portion of the Insured Premises which has or has not suffered damage by any of the Insured Perils.  The Fund also will not pay the expense to:

17.1         Extract contaminants or Pollution from the debris, land, water, or atmosphere;

17.2         Remove, restore or replace contaminated or polluted land or water;

17.3         Remove or transport any property or debris to a site for storage or decontamination, required because the property or debris is affected by Pollution or contaminants, whether or not such removal, transport, decontamination is required by law or regulation.

It is a condition precedent to General Property Coverage for Debris Removal Expense that the Fund shall have paid or agreed to pay for the Direct Physical Loss or Damage causing the Property Loss and that the Member shall give notice to the Fund of its intent to submit a Property Claim for the cost of debris removal or cost of clean up no later than twelve months (12) after the date such Direct Physical Loss or Damage occurred.

18.            Other Insurance.  In the event of a Property Loss, if there is Other Insurance in force covering any designated portion of the Insured Property against any or all the Insured Perils, or if any Other Insurance covers more specifically any Insured Perils which occasioned such Loss, or which would cover the same in the case of any of the foregoing but for the existence of this General Property Coverage, the Fund's General Property Coverage shall be further limited to the excess, if any, beyond the amount which is or would have been payable under such Other Insurance had this General Property Coverage Section not been  in effect, but in no event exceeding the Property Coverage Limit applicable under this General Property Coverage Section.  It is the intention of this General Property Coverage to be construed as the initial surplus or excess insurance where any specific Other Insurance exists on any or all of the Insured Property involved in the Property Loss, and this General Property Coverage shall not apply or contribute until the amount collectible from such specific Other Insurance shall be exhausted, at which point, this General Property Coverage shall apply, if there is otherwise Coverage hereunder, to pay the unreimbursed balance of the Property Loss Amount up to the Property Coverage Limit.  Further, surplus or excess insurance beyond the limits expressed in this General Property Coverage Section is permitted, it being understood that any such excess or surplus insurance shall not be considered or held as contributing insurance in any clause under this General Property Coverage Section.  This General Property Coverage Section does not in any way affect the Funds' right of Subrogation in ¶ 22 herein.

19.            Inspection of Insured Property and Member's Operations.  The Fund shall be permitted but not obligated to inspect, at any reasonable time, any Insured Property of any Member of the Property Pool.  Neither the Fund's right to make inspection nor the making thereof nor any report thereon shall constitute an undertaking, on behalf of or for the benefit of the Member or others, to determine or warrant that the Insured Property inspected is safe or secure from risk of harm.

20.            Pair, Set or Parts.  In the event of Property Loss to:  (a) any article or articles which are a part of a pair or set requiring replacement of the entire pair or set, the measure of the Property Loss Amount with respect to such article or articles shall be a reasonable and fair proportion of the total value of the pair or set, giving consideration to the importance of said article or articles, but in no event shall such Property Loss Amount be construed to mean total loss of the pair or set; or (b) any part of Insured Property consisting, when completed for use, of several parts, the Fund shall be liable for the value of the part lost or damaged.

21.            Duties of the Member in the Event of a Property Loss.  The Member must ensure that the following are done in the event of Property Loss to Insured Property:

21.1         Notice to Police.  Notify the police if a law may have been broken.

21.2         Notice to Administrator.  Give the Fund's Administrator prompt notice of the Property Loss, including a description of the Insured Property involved.

21.3         Provide Loss Information to Administrator.  As soon as possible, give the Fund's Administrator a description of how, when and where the Property Loss occurred.

21.4         Take Reasonable Measures to Protect Property.  Take all reasonable steps to protect the Insured Property from further damage from Insured Perils for which there is Coverage under this General Property Coverage Section.  If feasible, the Member should set the damaged property aside and in the best possible order for examination.  The Member should also keep a record of its expenses for emergency and temporary repairs, for consideration in the settlement of the Member's Property Claim.  The Member's performance of these obligations will not increase the Property Coverage Limit or the amount of General Property Coverage otherwise applicable to the Property Loss.

21.5         Inventory of Damaged Property.  At the Fund's request, the Member shall provide the Administrator complete inventories of the damaged Insured Property, including quantities, costs, values and the Property Loss Amount claimed.

21.6         Fund's Right to Inspect Damaged Property.  The Member shall permit the Administrator to inspect the damaged Insured Property and any records proving the Property Loss.  The Member shall also permit the Administrator to take samples of damaged Insured Property for inspection, testing and analysis.  The Member also must notify the Administrator of the nature and extent of the interest of the Member and of all others in the damaged Insured Property.