AUTOMOBILE LIABILITY COVERAGE

AUTOMOBILE LIABILITY COVERAGE

For The

PURMS JOINT SELF-INSURANCE AGREEMENT

Adopted as of March 30, 1995

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.

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AUTOMOBILE LIABILITY COVERAGE

1. Definitions for Automobile Liability Coverage.� The Definitions set forth in the Definitions Section of the SIA (see, � II) are applicable to the interpretation of the Coverage provided by this Automobile Liability Coverage Section, except as may be modified specifically or by implication by the definitions set forth below which are specific to the Automobile Liability Coverage in this � V.�

1.1 Accident -- with respect to this Automobile Liability Coverage Section, shall mean an unusual, unexpected and unforeseen happening, including continuous or repeated exposure to the same conditions, causing Bodily Injury or Property Damage resulting from the ownership, maintenance or use of a Covered Vehicle by an Insured. (see � V, � 2.1).� Multiple Claims arising out of a single Accident, even if asserted against different Members or their Employees, shall be deemed to be a single Covered Liability Claim arising from a Single Accident.

1.2 Auto -- means a land motor vehicle, trailer or semi-trailer designed for travel on public roads, but does not include Mobile Equipment, except for the types of "self-propelled" Mobile Equipment identified in � V, � 1.7(f).

1.3 Covered Vehicle -- shall mean:

(a) Owned Autos -- which are only those Autos owned by a Member including owned private passenger autos and Owned Autos other than private passenger autos, and (including trailers not owned by the Member but attached to power units the Member does own).�

(b) Hired Autos -- which means only those Autos that are leased, hired, rented or borrowed by a Member, or by an Employee for the Member's account or by the Employee personally, in connection with PUD Business.

(c) Nonowned Autos -- which means Autos that are not owned, leased, hired, rented or borrowed by a Member, but that are used in connection with the Member's Public Utility Operations.� "Nonowned Autos" includes Autos owned by the Member's Employees or members of such Employee's households, but only while used in connection with the Member's PUD Business; subject, however, to the Other Insurance provisions in � 2.5.

(d) Other Covered Vehicles -- shall mean:

(1) Trailers --� which have a load capacity of 2,000 lbs. or less designed primarily for travel on public roads.

(2) Mobile Equipment� --� while being carried or towed by a Covered Vehicle.

(3) Substitute Autos� -- which means any Auto a Member does not own, while used with the permission of its owner as a temporary substitute for a Covered Vehicle a Member does own that is out of service because of breakdown, repair, servicing, loss or destruction.

1.4 Insured -- for purposes of the Auto Liability Coverage Section, shall mean any person or organization qualifying as an Insured as follows:

(a) The Member, for any Covered Vehicle;

(b) Any Employee, and members of the Employee's household, while using any Covered Vehicle, other than a Non-Owned Auto, with the Member's express or tacit permission and in connection with PUD Business,� except:

(1) The owner or anyone else from whom the Member hired or borrowed a Covered Vehicle (provided, this exception does not apply if the Covered Vehicle is a "trailer" connected to a "Covered Vehicle" that qualifies as an Owned Auto).

(2) Anyone other than a Member's Employees, partners, a lessee or borrower or any of their employees, while moving property to or from a Covered Vehicle;

(c) An Employee, and members of the Employee's household, if the Covered Vehicle is owned by that Employee or a member of his or her household; provided the Employee is using the Nonowned Auto with the Member's express or tacit permission and such use is in connection with PUD Business;

(d) Any Third Party, while using a Covered Vehicle with the express permission of a Member or Employee, but only if such use is in connection with the Member's Public Utility Operations; and

(e) Anyone liable for the conduct of an Insured described above, but only to the extent of that liability.

1.5 Insured Contract -- shall mean:

(a) A lease of premises;

(b) A sidetrack agreement;

(c) Any easement or license agreement, except in connection with construction or demolition operations on or within 50 ft. of any railroad real property;

(d) An obligation, as required by ordinance, to indemnify a municipality, except in connection with work for a municipality;

(e) That part of any contract or agreement entered into, in connection with a Member's Public Utility Operations pertaining to the rental or lease, by the Member or by any of the Member's Employees, of any Auto;� provided, however, such contract or agreement shall not be considered an Insured Contract to the extent that it obligates the Member or any of its Employees to pay for Property Damage to any Auto rented or leased by the Member or by any of the Member's Employees.

An "Insured Contract" does not include that part of any contract or agreement:

(1) That indemnifies any person or organization for Bodily Injury or Property Damage arising out of construction or demolition operations within 50 ft. of any railroad real property;

(2) That pertains to the loan, lease or rental of an Auto to a Member or to any of a Member's Employees if the Auto is loaned, leased, or rented with a driver; or

(3) That holds a person or organization engaged in the business of transporting property by Auto for hire harmless for a Member's use of a Covered Vehicle over a route or territory that person or organization is authorized to serve by public authority.

1.6 Medical Expenses -- All reasonable expenses reasonably incurred in the treatment of injuries sustained in an Accident for which Uninsured Vehicle Coverage is provided under � 2.4, including all charges for hospitalization, doctors' fees, dental fees, charges by treatment centers or nursing homes, costs of physical therapy, costs of prostheses or other medical devices, and charges for medications, laboratory and diagnostic procedures, or other reasonably necessary medical charges.

1.7 Mobile Equipment -- shall mean any of the following types of land vehicles, including any attached machinery or equipment:

(a) Bulldozers, farm machinery, forklifts, and other vehicles designed for use principally off the public road;

(b) Vehicles maintained for use solely on or next to premises owned or rented by a Member;

(d) Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted:�

(1) Power cranes, shovels, loaders, diggers, or drills; or

(2) Road construction or reservicing equipment such as graders, scrapers or rollers.

(f) Vehicles not described in paragraphs (a) through (d) above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types:

(1) Air compressors, pumps, and generators, including spraying, welding, building, cleaning, geophysical exploration, lighting and well servicing equipment; or

(2) Cherry pickers and similar devices used to raise or lower workers.

(g) Vehicles not described in paragraphs (a) through (d) above maintained primarily for purposes other than the transportation of persons or cargo.� However, self-propelled vehicles with the following types of permanently attached equipment are not "Mobile Equipment" but will be considered "Autos":

(1) Equipment designed primarily for snow removal, road maintenance (but not construction or reservicing), or street cleaning;

(2) Cherry pickers and similar devices mounted on automobile or truck chassis and used to raise or lower workers; and

(3) Air compressors, pumps and generators, including spraying, welding, building, cleaning, geophysical exploration, lighting or well servicing equipment.

1.8 Public Utility Operations -- shall mean the operations of the Member related to, arising from or associated with the production, transmission, delivery or furnishing of electricity, gas, water or sewer service to the public, including the ownership, operation, management or control of any plant or equipment used in connection therewith.

1.9 PUD Business� --� shall, for purposes of the Auto Coverage section, mean all activities falling within the definition of Public Utility Operations which involve the use of a Covered Vehicle, and all business activities related thereto (like attending seminars, conventions, trade association meetings, etc.) involving the use of a Covered Vehicle, so long as the primary purpose for such use is related to such business activities and any use thereof for personal purposes is incidental to such business use.

1.10 PUD Vehicle -- shall mean any Covered Vehicle operated or otherwise being used by an Insured,� regardless of who is actually driving the vehicle, subject, however, to the Other Insurance provisions in � 2.5. (see � 2.4.1).

Adopted as of March 30, 1995