SECTION 1 - MATERIAL LOSS OR DAMAGE

Transcription

1 備查文號 : (104 企字第 號免費申訴電話 : SECTION 1 - MATERIAL LOSS OR DAMAGE The Indemnity In the event of any direct, sudden and unforeseen physical loss, destruction or damage (hereinafter in Section1 referred to as Damage with Damaged having a corresponding meaning not otherwise excluded happening at the Situation to the Property Insured, the Insurer(s will (subject to the Conditions, Exclusions, the terms, Memoranda and provisions of this Policy including the limitation on the Insurer(s liability indemnify the Insured in accordance with the applicable Basis of Settlement. Subject to the liability of the Insurer(s not being increased beyond the Limit of Liability stated in the Schedule, the Insurer(s will also indemnify the Insured for:- (a architects, surveyors, consulting engineers, legal and other fees and clerks of works salaries for estimates, plans, specifications, quantities, tenders, reports, and consultations, consequent upon Damage to property hereby insured including such costs, fees and salary for preparing any claim hereunder. (b any fee, contribution or other impost or other payable to any government, local government or other statutory or competent authority; where payment of such fee, contribution, impost or other sum is a Condition precedent to the obtaining of consent to reinstate any building(s insured hereunder; provided that the Insurer(s shall not be liable for payment of any fines and/or penalties imposed upon the Insured by any such Authorities. (c costs and expenses necessarily and reasonably incurred for the purpose of extinguishing fire at or in the vicinity of Property Insured or threatening to involve such property or for the purpose of preventing or diminishing imminent Damage to Property Insured by any other peril insured against by Section 1 of this Policy, including Damage to gain access and the cost of replenishment of fire fighting appliances and charges incurred for the purpose of shutting off the supply of water or other substance following accidental discharge from any fire protective equipment or otherwise escaping from intended confines and all other post fire extinguishment costs not otherwise covered by this Policy. (d the cost of replacing any fire protective equipment with a different type of equipment, which has similar capabilities to the equipment being replaced, as a consequence of the discharge of substance therefrom (such discharge being either accidental or malicious or for the purpose of extinguishing fire and where replacement with such different type of equipment is required by law. (e costs and expenses necessarily and reasonably incurred for the temporary protection and safety of property hereby insured pending repair or replacement consequent upon Damage recoverable hereunder. (f costs of replacing locks and/or keys and/or combinations where if as a result of burglary, theft or any attempt thereat the keys and/or combinations are stolen or if there are reasonable grounds to believe the keys may have been duplicated also the cost of opening safes and/or strongrooms as a result of theft of keys and/or combinations. (g costs and expenses reasonably incurred in respect of clearing Debris and the removal and the disposal of property whether Damaged or undamaged, including but not limited to: (i (ii removal, storage and/or disposal of Debris of whatever kind; shoring up, propping and underpinning of Property Insured and the property of others; (iii clearance and cleaning up of drains, gutters, sewers and all other property of whatever kind; 1

2 (iv erecting and maintaining hoardings deemed required by the Insured during demolition; (v the demolition, dismantling and removal of any property belonging to the Insured or for which the Insured is responsible, provided that: (1 such property is no longer useful for the purpose for which it was intended; or (2 such demolition and removal is necessary for the purpose of the reinstatement or replacement of Property Insured; or (3 such demolition and removal is ordered by any Government, Local Government or other Statutory or competent authority; consequent upon Damage to the Property Insured by a peril or event not hereby excluded by this Policy. Notwithstanding anything contained to the contrary elsewhere in the Policy, in relation to premises, roadways, services, railways or waterways of others, cover is extended to include costs and expenses reasonably incurred in respect of the Insured's legal liability for removal, storage and/or disposal of Debris consequent upon Damage to the Property Insured by a peril not hereby excluded by this Policy, for such costs together with the cost of cleaning and decontamination. Provided that no cover is given to the extent such liability was assumed by the Insured under an agreement entered into after the date of the Damage unless liability would have attached in the absence of such agreement. For clarity, this Policy does not extend to any liability that the Insured may incur as a consequence of Contamination or Pollution of any kind unless caused by or resulting from a peril or event not excluded by this Policy. (h Damage to clothing and tools of trade belonging to directors and employees of the Insured whilst on the Premises. (i (j costs and expenses necessarily and reasonably incurred for the purpose of expediting Reinstatement, replacement or repair of any Damaged Property Insured, including but not limited to: penalty rates for wages during overtime, shift, night, Sunday or holiday working; the hire of additional labour, equipment or resources, payment for carriage by express passenger, fast goods or other rail or road transport, or carriage by air freight via licensed airline(s operating regular scheduled services but not by aircraft chartered for such carriage unless agreed in writing with the Insurer(s. the cost of locating and repairing burst or leaking water tanks, apparatus or pipes where a claim has been substantiated for Damage to the Property Insured arising therefrom, including the cost of restoring the Premises. (k costs and expenses incurred by the Insured in taking inventory (including unpacking, re-packing and re-stocking to identify, quantify and value any property which has been Damaged consequent upon the occurrence of any event insured against by Section 1 of this Policy, including examination of property not belonging to but in the care, custody or control of the Insured. (l The Insured s liability for customs, excise and other duties which the Insured may become liable to pay in the event of Damage to Property Insured and/or the Insured s liability to compensate others who may become liable for such customs, excise or other duties. (m Damage to landscaping, which term shall include but not be limited to trees, shrubs, lawns, gardens, rockwork, paving, and ornamentation pertaining thereto, ornamental and other plants. Provided that Property Exclusions 6 and 7 shall not apply to this clause(m. The Insured s declaration of values does not include any allowance for the costs and expenses in items (a to (m above. 2

3 Definitions Applicable to Section 1 For the purpose of this Section 1, the following terms shall bear the meanings ascribed to them hereunder. Property Insured All real and personal property of every kind and description (except as hereinafter excluded belonging to the Insured or for which the Insured is responsible, or has assumed responsibility to insure prior to the occurrence of any Damage, including all such property in which the Insured may acquire an insurable, pecuniary or economic interest or for Damage to which the Insured becomes responsible or assumes responsibility to insure during the Period of Insurance. In respect of new property, coverage hereunder will attach from the earliest of the date on which an interest in the property is first acquired provided that such new property is fully completed and commissioned. It is understood and agreed that: (a the term Property Insured shall include: (i (ii any building from the time that it has been constructed and handed over to the Insured prior to the erection and/or installation, testing and commissioning of machinery, plant and equipment therein. each part of each Project Insured which comprises machinery, plant and equipment from the time that it has been erected and/or installed, tested and commissioned and handed over as complete. The handover of Process Tools (as designated by the Insured and equipment shall occur from the time that they have been erected and/or installed, and completed the Acceptance Test. The Acceptance Test consists of testing and commissioning of Process Tools and equipment. The completion date of the testing and commissioning activity shall be determined by issuing of a document officially releasing the Process Tools or equipment from the erection phase. (iii Facilities: the take over or taking into operation by the Insured or others on the Insured s behalf of the facilities shall occur upon the completion of the appropriate testing of the particular facility. (b the term personal property shall include Money (which means current coin, bank notes, currency notes, cheques, travelers cheques, bonds, securities and negotiable instruments, credit card sales and/or discount house vouchers, postal orders, money orders, unused postage and revenue stamps and including the value of stamps contained in franking machines whilst contained in the Situation and whilst in transit to and from the Situation anywhere within Taiwan, Republic of China, including whilst contained in the night safe, safe, strongroom, or any safety deposit box of any bank or financial institution where the Insured transacts business, and in the personal custody of the Insured and/or persons authorized by the Insured whilst contained in their private residences. For the purpose of ascertaining the classification under which any property is insured, the Insurer(s agree to accept the designation assigned to such property by the Insured. 3

4 Premises As defined in the Schedule under the heading Situation and/or Premises. Schedule Means that part of this Policy incorporated under the heading of Schedule or any later Schedule issued on renewal or variation or by way of Endorsement. Event Event means that:- (a with respect to all Damage resulting from a Natural Peril not excluded by this Policy occurring during any one period of 72 consecutive hours commencing during the Period of Insurance shall be deemed to be a single event. Each Event shall be deemed to have commenced on the first happening of any such Damage not within any prior period of 72 consecutive hours. (b with respect to all other insured perils; any loss or series of losses arising from one occurrence. Provided that in respect of a theft, an Event means the sum total of all losses of covered property resulting from one or more concealed acts within a continuous 24 hour period and committed by one or more persons acting in unison. Earthquake Earthquake defined as shock damage resulting directly from seismic activity, including subsequent damage resulting therefrom. Policy Means this document, including the Schedule and any Endorsements. Debris Means the residue from an insured loss whether such residue is contained within the location or site of the loss or not and whether the residue is of Property Insured or not. Natural Peril Means typhoon, hurricane, cyclone, tornado, tsunami, seaquake, earthquake and flood. 4

5 Basis of Settlement (a (1 On buildings, machinery, plant and all other property and contents (other than those specified below; the cost of Reinstatement, replacement or repair in accordance with the provisions of the Reinstatement and Replacement and Extra Cost of Reinstatement Memoranda as set out herein. (2 On building, machinery and plant of Fab 1; the Declared Value for Section 1 set forth in the Schedule under this Policy is regarded as Agreed Value which is accepted by the insurer(s as the true value of insured property and it is the amount that will be paid by the insurer in the event of a total loss of an asset or property. In the case of repairable damage, the cost of restoration to normal working order comprising the value of replacement parts, labour charges at standard rates of wages, transport costs at ordinary rates and customs dues or other imposts if levied. The value of any damaged parts replaced which can be re-used in any way whatsoever may be deducted. This indemnity shall not deduct any depreciation during the period of insurance and regarded as total loss if the indemnity value exceeding the Agreed Value of the damaged property insured. (3 On machinery and plant of Fab 2; the amount of money to allow for reinstatement by similar used equipment that has been fully refurbished by the original equipment vendor and or by an authorized reconditioning agent. Where appropriate, due allowance has been made for freight, insurance, duty, delivery, installation, commissioning, design, engineering costs and the like. In the case of repairable damage, the cost of restoration to normal working order comprising the value of replacement parts, labour charges at standard rates of wages, transport costs at ordinary rates and customs dues or other imposts if levied. The value of any damaged parts replaced which can be re-used in any way whatsoever may be deducted. This indemnity shall not deduct any depreciation during the period of insurance and regarded as total loss if the indemnity value exceeding the Declared Value of the damaged property insured. Provided that if the Insured elects to claim the indemnity value of any Damaged property, the Insurer(s will pay to the Insured the value of such property at the time of the happening of the Damage or at the Insurer(s option reinstate, replace or repair such property or any part thereof. In any event the Insurer(s will pay costs incurred by the Insured in accordance with the provisions of the Extra Cost of Reinstatement Memorandum. (b On raw materials, supplies and other merchandise not manufactured by the Insured; the replacement cost at the time and the place of replacement or, if such property is not replaced, the value thereof at the time and place of the Damage. (c On material in process of manufacture; the replacement value of the raw materials at the time and place of replacement plus the value of labour and other overhead charges expended thereon at the time and the place of the Damage. (d On finished goods; the replacement value of the raw materials at the time and place of replacement plus the value of labour and other overhead charges expended thereon before any allowance for profit calculated at the time and place of the Damage or the cost of re-stocking such goods within a reasonable time, whichever is the lesser; (e On goods sold but not delivered for which the Insured is responsible and with regard to which, 5

6 under the conditions of sale, the sale contract is by reason of the Damage cancelled either wholly or to the extent of the Damage; the contract price or that part of the contract price which shall have been lost to the Insured because of the partial cancellation. (f On computer systems records, including software, documents, manuscripts, securities, deeds, specifications, plans, maps, films, mortgages, abstracts, drawings, designs, business books and other records of every description; the cost of reinstating, replacing, reproducing or restoring same, including information contained therein or thereon but excluding the value to the Insured of the said information; or, if such is not required, the replacement cost of materials as blank stationery at the time and place of the Damage. (g On patterns, models, moulds, dies or casts; the cost of repair or replacement (if actually replaced otherwise the value of such property to the Insured at the time and place of the Damage. (h On glass; the cost of repairing or replacing the broken glass including: temporary shuttering and/or hiring of security service pending replacement of broken glass, sign-writing or ornamentation on glass, replacement burglar alarm tapes or protective films on the glass, removing and refixing of window and show case frames and fittings and heat reflecting material or process on glass. (i (j On empty Premises awaiting demolition; the salvage value of the building materials and/or landlords fixtures and fittings. On any property the subject of a contract to which the Insured is a party; the amount payable by the Insured under such contract to the other party to the contract or, if the property is replaced, the replacement value at the time and place of replacement, whichever is the greater. (k On customers goods for which the Insured is responsible or may be held legally liable in the event of Damage thereto as insured by Section 1 of this Policy; the replacement cost at the time and place of replacement. (l In the event of Damage affecting labels, containers or wrappers the Insurer(s shall not be liable for more than an amount sufficient to pay the cost of new labels, containers or wrappers, and the cost of reconditioning the goods, but in no case shall the Insurer(s be liable for more than the insured value of the Damaged merchandise. For the purpose of ascertaining the classification under which any property is insured the Insurer(s agree to accept the designation applied to such property by the Insured in their records or assets valuation report. However, Machinery and equipment value insured including but not limited to record in the Insured s books of account as having no value after depreciation but which is still in use or as defined in the policy. 6

7 MEMORANDA TO SECTION 1 Except to the extent that Section 1 of this Policy is hereby modified under the following Memoranda the Conditions and Exclusions of this Policy and the terms, Conditions and limitations applicable to Section 1 shall apply. Output Replacement Where any Property Insured consists of equipment, machinery or plant having a measurable function, capability or output and if, by reason of the Basis of Settlement Clause, it is necessary to replace such property with a new item or items which perform a similar function or functions, then the Basis of Settlement for such property shall be as follows: (a (b (c Where any property is to be replaced by an item or items which have the same or a lesser total function, capability or output, then the Basis of Settlement is the new installed cost of such replacement item or items that would give the same total function, capability or output as the property being replaced. Where any property is to be replaced by an item or items (including cost of foundations which have a greater total function, capability or output and the new installed cost of such replacement item or items is no greater than the replacement value of the property being replaced, then the Basis of Settlement is the new installed cost of the replacement item or items. Where any property is to be replaced by an item or items which have a greater total function, capability or output and the new installed cost of such replacement property is greater than the replacement value of the Damaged property, then the Basis of Settlement is the greater of the reinstatement value of the property or that proportion of the new installed cost of the replacement item or items which the output of the Damaged property bears to the output of the replacement item or items. Provided always that where any Damaged property is capable of full and proper repair, the Insurer(s shall pay the cost of restoration of such Damaged property to a condition substantially the same as (but not better or more extensive than its condition when new. Stock Value Reporting & Premium Adjustment Clause The premium in respect of stock is provisional being calculated on 75% of the Declared Values thereon and is subject to adjustment on expiry of each Period of Insurance. In consideration of which:- The Insured shall declare to the Insurer(s in writing the values of the stock at risk on the last day of each calendar month. Such declarations are to be submitted to the Insurer(s within thirty days after the expiry date of each Period of Insurance and be signed by the Insured or by a responsible person authorized to sign on their behalf. On the expiry of each Period of Insurance the premium shall be calculated at the rate agreed on the average amount declared or deemed to have been declared divided by the number of declarations due to have been made. If the resultant premium is greater than the provisional premium the Insured shall pay the difference if it be less the difference shall be repaid to the Insured. If at the time of any loss there be any other subsisting insurance or insurances on the stock whether 7

8 effected by the Insured or by any others covering the stocks hereby insured this Policy shall apply only in excess of the other policy or policies. In the event of this Policy being canceled by either the Insured or the Insurer(s during its currency (whether stocks exist or not the premium to be retained by the Insurer(s shall be the appropriate pro rata premium calculated on the average amount insured up to the date of cancellation. Personal Effects Clause Property Insured shall include the personal effects and/or personal property of directors officers, partners, and employees of the Insured and of any visitor to the Insured's premises (other than a visitor contracted to provide services to the Insured whilst such personal effects and/or personal property are at the Insured's premises. Interests of Other Parties The Insurer(s will indemnify, as though they were the named Insured, all parties interested in the Property Insured by this Section 1 by way of loan, mortgage, lease, hire purchase or other financial agreement automatically without notification or specification; the nature and extent of such interests to be disclosed in the event of Damage. The Insurer(s shall waive all rights of subrogation that may otherwise have existed against such parties. At the option of the Insured (a (b (c this Policy extends to indemnify any other party having a pecuniary or economic interest in the Property Insured. It is understood and agreed that the receipts of any such parties for claims settlements under this Policy in relation to their respective interests shall be a full and sufficient discharge to the Insurer(s; Where the insurance covers the interest of more than one party, any act or neglect of an individual party will not prejudice the rights of the remaining party/parties; provided the remaining party/parties shall, immediately on becoming aware of any act or neglect whereby the risk of Damage has increased, give notice in writing to the Insurer(s and on demand pay such reasonable additional Premium as the Insurer(s may require. If at the time of Damage to any part of the Property Insured, the Insured has contracted to sell its interests in the Property Insured, but the sale has not been completed, the purchaser shall, at the option of the Insured, be deemed to have been included as an Insured in this Policy so far as it provides cover for Damage to the Property Insured which is the subject of the sale. Provided that this clause (c shall not apply to the extent other insurance cover will indemnify the loss. The Insurer(s shall waive all rights of subrogation that may otherwise have existed against such parties. Control of Damaged Property and Branded Goods This Policy gives control of physically damaged property consisting of work in progress and finished goods to the Insured. Any salvage of goods and/or merchandise and/or work in progress, whether branded or not, the Insured s own or held by the Insured in trust or on commission, and/or goods sold but not delivered, shall not be disposed of by sale without the consent of the Insured. In the event a salvage sale is 8

9 conducted and the Insured deems that identifying brands or labels are to be removed prior to the sale, the cost of such removal will be at the expense of the Insurer(s. If such salvage is not disposed of by sale then the value of the salvage shall be deemed to be the Market Value of the goods after brands, labels or names have been removed (where applicable. Alternatively the Insured can elect to have any salvaged goods, merchandise or work in progress destroyed under supervision and such goods, merchandise or work in progress will then be deemed to have no salvage value and to have been totally destroyed in circumstances covered by this Policy. Depreciation of Undamaged Stock This Policy extends to include loss sustained by the Insured as a result of depreciation of undamaged stock which cannot be processed promptly due to interruption of or interference with the Business in consequence of Damage to any Property Insured hereunder. The amount payable as indemnity shall be determined in accordance with the appropriate provisions of clauses (b and (c of the Basis of Settlement. Delayed Unpacking When consignments or packages of raw materials, supplies, or merchandise are not opened for inspection on arrival, any concealed damage by any cause not excluded by this Policy discovered when the consignments or packages are unpacked shall be deemed Damage as insured by this Policy. Provided that: (a the damage shall be discovered not later than three (3 months after receipt of the consignment or package by the Insured; (b consignments or packages clearly showing visible signs of damage at the time of their arrival shall be inspected as soon as reasonably practicable and appropriate claims made against the carrier and all such correspondence including replies received from the carrier forwarded to Insurer(s. Immediate Repairs In the event of Damage, the Insured if they so elect, may immediately begin repairs or reconstruction. Provided such work shall at all times be open to supervision by the Insurer(s and in case of dispute as to the cost of repair and/or reconstruction, the loss shall be settled in accordance with the terms of this Policy. Pairs and Sets This Policy covers the reduction in value of Property Insured that is part of pairs, sets, components or lots (sold by size, colour, range or any other classification which result from Damage to other parts of the pair, set, components or lot. Following Damage to one or more parts of the pair, set, components or lot, the Insured has the option of settlement on the basis of a total loss of the entire pair, set, components or lot. If the Insured requires settlement based on either total or constructive total loss the Insured undertakes to surrender the undamaged remaining article or articles of the pair, set, components or lot to the Insurer(s. 9

10 Reinstatement or Replacement (Applicable to buildings, machinery, plant and all other property and contents; other than those specified in items (b to (l under Basis of Settlement The basis upon which the amount payable is to be calculated shall be the cost of Reinstatement of the Damaged Property Insured at the time of its Reinstatement; subject to the following Provisions and subject also to General Conditions of this Policy, the terms and Conditions of Section 1 and the Limit or Sub Limits of Liability applicable to this Section 1. For the purpose of the insurance under this Memorandum Reinstatement shall mean:- (a (b Where property is lost or destroyed: in the case of a building, the rebuilding thereof or in the case of property other than a building, the replacement thereof by similar property; in either case in a condition equal to, but not better or more extensive than, its condition when new. Where property is Damaged: the repair of the Damage and the restoration of the Damaged portion of the property to a condition substantially the same as, but not better or more extensive than, its condition when new. Provisions (a The work of rebuilding, replacing, repairing or restoring as the case may be (which may be carried out upon any other site(s and in any manner suitable to the requirements of the Insured, but subject to the liability of the Insurer(s not being thereby increased, must be commenced and carried out with reasonable despatch failing which the Insurer(s shall not be liable to make any payment beyond the amount which would have been payable under this Section 1 if the work of rebuilding, replacing, repairing or restoring had been commenced and carried out with reasonable despatch. (b (c (d (e Where any Property Insured to which this Memorandum applies is Damaged beyond repair, the Insured may (subject to the liability of the Insurer(s not being thereby increased replace that property with similar property which employs current technology. Such replacement property shall not be regarded as better or more extensive than the condition of the Damaged property when new. The work of Reinstatement may be effected as part of an expansion of the Insured s total production or other facilities, in which case the Insurer(s liability shall be limited to the costs that would have been incurred if the total production or other facilities of the Insured at the Situation of the Damage had been restored to the level in existence thereat at the time of the happening of the Damage. When any Property Insured to which this Memorandum applies is Damaged in part only, the liability of the Insurer(s shall not exceed the sum representing the cost which the Insurer(s could have been called upon to pay for Reinstatement if such property had been wholly destroyed. If the Insured elects to reinstate or replace destroyed property with dissimilar property, whether or not to be used for a similar purpose to the destroyed property, the Insurer(s shall pay the lesser of: (i (ii the cost of the dissimilar property, or an amount equal to the replacement cost which would have been payable if the destroyed property had been reinstated or replaced with similar property in a condition equal to but not better or more extensive than its condition when new. 10

11 (f Notwithstanding sub-paragraph (a of the above-mentioned definition of Reinstatement, where any lost or destroyed property is replaced by property which is better or more extensive than its condition when new: (i (ii the Insurer(s shall pay to the Insured the cost which would have been incurred if the lost or destroyed property had been reinstated in accordance with the provisions of clause (a of the definition of Reinstatement, and the Insured shall bear the balance of the cost of such better or more extensive property. (g Notwithstanding anything to the contrary contained in this Memorandum, if the Insured elects to purchase an existing building or buildings (including or excluding machinery, plant and all other contents, other than stock, therein then, such replacement(s shall be deemed to constitute Reinstatement under this Memorandum, subject to the liability of the Insurer(s not being thereby increased. In the event that both the total replacement value and the total volume (measured over the roof and external walls of the building or buildings purchased are less than both the total replacement value and the total volume (measured over the roof and external walls of the building or buildings destroyed, then, the total amount recoverable hereunder shall include (in respect of that portion of the building volume which is not replaced an additional amount equal to but not exceeding the equivalent proportion of the amount which would have been payable under this Section 1 if this provision had not been incorporated herein. If both the total replacement value and the total quantity of machinery, plant and all other contents (other than stock purchased are less than both the total replacement value and the total quantity of machinery, plant and all other contents (other than stock destroyed, then, the total amount recoverable hereunder shall include (in respect of that proportion of the total quantity of machinery, plant and equipment (excluding stocks which is not replaced an additional amount equal to but not exceeding the equivalent proportion of the amount which would have been payable under this Section 1 if this provision had not been incorporated herein. (h Notwithstanding the Output Replacement Clause, where any Damaged property cannot be economically repaired, or due to technological change is incapable of being replaced with the same model or version in a viable format, at the option of the Insured, they may: Replace the Damaged property with property with a greater total function, capability and/or output. Provided the replacement property: (i (ii represents the manufacturers or alternative manufacturers current equivalent or substitute product to the Damaged property; does not exceed in value the Sum Insured or the reasonable pre-loss sum insured for the item Damaged if the value is not individually discernable in the Sum Insured, or the Limit of Liability stated in the Policy Schedule, whichever is the lesser. (iii extends to include the replacement of undamaged property in so far as it is necessary in order to adapt the undamaged property to operate in conjunction with the technological improved repaired or replaced property insured by this Policy. Notwithstanding clause (ii, should the Insured replace the Damaged property with property of greater monetary value than the amount as stated in clause (ii, the Insured shall be regarded as their own insurer for any amount in excess of that stated amount. 11

12 Extra Cost of Reinstatement (Applicable to buildings, machinery, plant and all other property and contents; other than those specified in items (b to (l under Basis of Settlement This Section 1 extends to include the extra cost of Reinstatement (including demolition, dismantling, decommissioning, re-commissioning and maintenance of Damaged and/or undamaged property necessarily incurred to comply with the requirements of any Act of Parliament or Regulation made thereunder or any By-Law or Regulation of any Municipal or other Statutory or Competent Authority; subject to the following Provisions and subject also to the General Conditions of this Policy, the terms and Conditions of Section 1 and the Limit or Sub Limit(s of Liability applicable to this Section 1. Provisions (a (b The work of Reinstatement (which may be carried out wholly or partially upon any other site(s, if the requirements of the aforesaid Act, Regulation or By-Law so necessitate, subject to the liability of the Insurer(s not being thereby increased, must be commenced and carried out with reasonable despatch given the prevailing circumstances, failing which the Insurer(s shall not be liable to make any payment beyond the amount which would have been payable under this Section 1 if the work of rebuilding, replacing, repairing or restoring had been commenced and carried out with reasonable despatch. The amount recoverable shall not include the additional cost incurred in complying with any such Act, Regulation, By-Law or requirement with which the Insured had been required to comply prior to the happening of the Damage. Floor Space Ratio Index (Plot Ratio Subject to the General Conditions of this Policy, the terms and Conditions of Section 1 and the Limit(s or Sub Limit(s of Liability applicable to this Section 1, in the event of any building(s being Damaged and the cost of reinstatement is more than fifty percent (50% of the cost of reinstatement if the building(s had been totally destroyed and, as a result of the exercise of Statutory powers and/or authority by any Government Departments, Local Government or any other Statutory Authority, reinstatement is only permissible subject to a reduced floor space ratio index: The Insurer(s agree to pay, in addition to any amount payable on reinstatement of such building(s, the difference between:- (a (b the actual cost of reinstatement incurred in accordance with the reduced floor space ratio index and the cost of reinstatement which would have been incurred had a reduced floor space ratio index not been applicable. In arriving at the amount payable under (a and (b above any payments made by the Insurer(s shall include the extra cost of reinstatement, including demolition or dismantling of the insured property, necessarily incurred to comply with the requirements of any Act of Parliament or Regulation made thereunder or any By-Law or Regulation of any Municipal or other Statutory Authority. Any payment made for the difference between (a and (b above shall be made as soon as the said difference is ascertained upon completion of the rebuilding works and certified by the architect acting on behalf of the Insured in the reinstatement of the building(s. 12

13 Constructive Total Loss Where, following agreement between the Insured and the Insurer(s, any Property Insured hereunder, or any part thereof, is reasonably abandoned: (a (b (c on account of its actual total loss or destruction appearing to be unavoidable; or because it could not be preserved from actual total loss or destruction without the Insured incurring an expenditure which would exceed its repaired and/or recovered value; or due to compliance with the requirements of any Act, Regulation, By-law or Ruling by a competent Authority such property shall be regarded as lost or destroyed and the amount payable as indemnity shall be determined in accordance with the applicable Basis of Settlement Clause(s of this Section 1. The words actual total loss mean Damage and not just physical loss or damage Existing Property Undergoing Internal Removal, Installation or Dismantling This Policy covers Damage to Property Insured during the process of internal removal (including associated dismantling and reinstallation, installation or dismantling within any of the insured Premises. Undamaged Foundations Where any Property Insured hereunder is Damaged but the foundations thereof are not destroyed and (due to the exercising of any statutory powers and/or delegated legislation and/or authority by any Government Department, Local Government or other Statutory or Competent Authority reinstatement of the Damaged property has to be carried out upon any other site or sites, then the abandoned foundations will be considered as being destroyed. Provided that if the presence of such abandoned foundations increases the sale value of the original building site, then such increase in sale value shall be regarded as salvage and the amount thereof shall be payable to the Insurer(s by the Insured upon completion of the sale of the site or shall be deducted from the final amount of any moneys payable by the Insurer(s, whichever shall occur later. All differences relating to the amount of such increase in site value shall forthwith be referred to the decision of two registered valuers, one to be appointed by each of the parties to this contract of insurance. In the event that the two registered valuers do not agree, such differences shall be referred to the decision of a third valuer, appointed by the Institute of Valuers or its equivalent in Taiwan, Republic of China, whose determination shall be final and binding upon the parties. Undamaged Buildings Where any building(s insured hereunder is or are Damaged and (due to the exercising of any statutory powers and/or delegated legislation and/or authority by any Government Department, Local Government or other Statutory or Competent Authority reinstatement of such building or buildings has to be carried out upon any other site or sites, then the abandoned undamaged portion(s of such building or buildings will be considered as being destroyed. Provided that if the presence of such abandoned undamaged portion(s of the building or buildings increases the sale value of the original building site, then such increase in sale value shall be regarded as salvage and the amount thereof shall be payable to the Insurer(s by the Insured upon completion of the sale of the site or shall be deducted from the final amount of any moneys payable 13

14 by the Insurer(s, whichever shall occur later. All differences relating to the amount of such increase in site value shall forthwith be referred to the decision of two registered valuers, one to be appointed by each of the parties to this contract of insurance. In the event that the two registered valuers do not agree, such differences shall be referred to the decision of a third valuer, appointed by the Institute of Valuers, or its equivalent in Taiwan, Republic of China, whose determination shall be final and binding upon the parties. Undamaged Ancillary and/or Peripheral Equipment Where any machinery, plant or equipment is destroyed but ancillary and/or peripheral equipment, utilised in conjunction therewith, is not destroyed but is nevertheless rendered superfluous or unusable upon replacement of the destroyed property, then such ancillary and/or peripheral equipment will be considered as being destroyed. Provided that if such ancillary and/or peripheral equipment is saleable as salvage, then such property shall be sold and the amount realised from the salvage sale shall be payable by the Insured to the Insurer(s. Third Party Property in the Custody of Insured This Policy extends to cover goods belonging to the Insured s customers indemnified herein whilst at the Insured Premises described herein. Data Processing/Media Failure Breakdown or Malfunction of the Insured s Processing System This Section 1 extends to cover: (a (b electronic data processing system(s including peripheral equipment and media against any Damage whilst such property is within the precincts of the Situation and/or Premises and working or at rest or being dismantled, moved, reassembled or reinstalled for the purpose of cleaning, adjustment inspection, repair, overhaul or relocation but only after successful commissioning at the Situation and/or Premises. costs and expenses reasonably and necessarily incurred in re-compiling data from other records or in the re-recording of data on any media. For the purpose of this extension, the Perils Exclusions (c(i(1, (c(i(2 and (c(i(3 applicable to Section 1 of this Policy shall be deemed inoperative. Changes in Temperature Controlled Environment This Policy covers Damage to stock caused by or arising from changes in any temperature controlled environment, where such change arises out of mechanical, hydraulic, electrical or electronic breakdown of the temperature controlling equipment, for a period of not less that twelve (12 hours, following which the Machinery Breakdown Deductible shown in the Policy Schedule will be applied to the full loss. 14

15 Reinstatement of Damage by the Insured In the event of any claim hereunder the Insured may reinstate Damaged Property Insured and the Insurer(s shall pay the cost of such reinstatement, (including the value of labour and other overhead charges expended thereon together with a reasonable margin for the profit. Provided always that the liability of the Insurer(s shall not exceed the amount which would otherwise have been payable had such reinstatement been carried out by independent contractors. Destruction of Undamaged Property In the event that it is or may become necessary to dismantle or demolish or damage or destroy any undamaged property in order to effect the reinstatement, replacement or repair of Property Insured which has been Damaged by any cause or event insured against hereunder:- The Insurer(s will indemnify the Insured for: (a (b the cost of dismantling, demolishing, damaging or destroying such sound property, together with the cost of removing, storing and/or disposing of any debris arising therefrom, and the cost of reinstating or replacing or repairing such property, in accordance with the applicable Basis of Settlement Clause(s of this Section 1. Mortgagee Clause Loss of or damage to the property insured under this policy if any, should be payable firstly to the mortgage to the extent of their insurable interest at time of loss. Loss of Land Value Notwithstanding the provisions of Property Exclusions (g applicable to Section 1, and subject to the Limit of Liability applicable to Section 1: (a (b In the event of the absolute refusal by any Government or Local or other Statutory or Competent Authority to allow the reinstatement of any insured Premises following Damage or destruction insured against by this Section 1, the Insurer(s will indemnify the Insured for the difference between the Land Value before and after such Damage or destruction. In the event of such Government or Local or other Statutory or Competent Authority allowing only partial reinstatement of such Premises after such Damage or destruction, the Insurer(s will indemnify the Insured for the difference between the Land Value after such partial reinstatement and the Land Value immediately before the Damage or destruction. In the case of the circumstances described in clause (a or (b above there shall be deducted, from the settlement payable by the Insurer(s, the amount of any compensation paid by such Authority arising from the action referred to in clause (a or (b above. For the purpose of this Section 1, Land Value shall mean the sum certified by the Institute of Valuers, or its equivalent in Taiwan Republic of China as being the value of the land so described in this Section 1 after due allowance has been made for variations in or other circumstances affecting such value, either before or after the Damage or destruction or which would have affected the value had the Damage or destruction not occurred, so that the figures thus adjusted shall represent as nearly as may be reasonably practicable the true Land Value pertaining both before and after the Damage or destruction. 15

16 Settlement of any claim hereunder shall be made following the ruling of the Government or Local or other Statutory or Competent Authority resulting in the loss of Land Value. Should settlement have been made, however, and subsequently the ruling of such Authority be changed prior to completion of the reinstatement, resulting in an increase in the Land Value, that part of the claim paid in excess of such revised Land Value shall be refunded to the Insurer(s by the Insured. All differences relating to the Land Value arising out of this Section 1 shall forthwith be referred to the decision of two registered valuers, one to be appointed by each of the parties to this contract of insurance. In the event that the two registered valuers do not agree, such differences shall be referred to the decision of a third valuer, appointed by the President of the Institute of Valuers, or its equivalent in Taiwan, Republic of China, whose determination shall be final and binding upon the parties. Sue and Labour In the case of actual or imminent Damage it shall be lawful for the Insured, their factors, servants, and assignees to sue, labour and travel for, in and about the defence, safeguard and recovery of the Property Insured hereunder, or any part thereof, without prejudice to this insurance, nor shall acts of the Insured in recovering, saving and preserving the Property Insured following Damage be considered a waiver or an acceptance of abandonment; all expenses incurred are covered by this Section 1. In no event shall the aggregate of such exposure exceed the amount by which the loss, otherwise payable under this Section 1, is hereby reduced. Declared Values The Schedule of Declared Values at each Location (in accordance with the applicable Basis of Settlement attaches to and forms part of this Policy for the purpose of the application of the No Average Clause. It is specifically understood and agreed that, with respect to the declared values of Property Insured in accordance with the Basis of Settlement, such declared values shall not include any allowances for Extra Cost of Reinstatement and any of the costs and expenses referred to under clause (b to (f of The Indemnity in Section 1 of the Policy. Designation For the purpose of ascertaining the classification under which any property is insured the Insurer(s agree to accept the designation applied to such property by the Insured in their records or assets valuation report. Leased Building Where the Insured enters into a lease agreement for occupancy of any building or part of a building and the terms of such lease contain a disclaimer clause in favour of the Lessor, then the insurance provided by the Policy shall not be prejudiced by the Insured agreeing to such terms. 16

17 Loss Mitigation Expenses This Policy also covers costs and expenses incurred for the purpose of extinguishing fire at or in the vicinity of Property Insured or threatening to involve such Property Insured or for the purpose of preventing or diminishing physical loss or destruction of or damage to Property Insured against by this Policy, including loss destruction or damage to gain access or egress and the cost of replenishment or resetting of fire fighting appliance and charges incurred for the purpose of shutting off the supply of water or any other substance following discharge from any fire protection equipment or otherwise escaping from intended confines. Protection and Preservation of Property Clause This Policy extends to include, in case of actual or imminent loss or damage insured herein, the expenses incurred by the Insured in taking all necessary and reasonable actions for the temporary protection and preservation of property insured hereunder shall be added to the total loss or damage otherwise recoverable herein. 17

18 The Indemnity SECTION 2 - BUSINESS INTERRUPTION In the event of any building or any other property or any part thereof used by the Insured at the Premises for the purpose of the Business being physically lost, destroyed or Damaged by any cause or event not hereinafter excluded or for which indemnity is provided under any Memoranda to Section 1 of this Policy (loss, destruction or Damage so caused being hereinafter termed Damage with Damaged having a corresponding meaning and the Business carried on by the Insured being directly in consequence thereof interrupted or interfered with, the Insurer(s will (subject to the Conditions and Exclusions of this Policy and the terms, Memoranda and provisions of Section 2 of this Policy including the limitation on the Insurer(s liability pay to the Insured the amount of loss resulting from such interruption or interference in accordance with the applicable Basis of Settlement. Loss arising from an interruption of or interference with the Business in consequence of Damage to any property belonging to the Insured or for Damage to which the insured is responsible, while such property is at any storage Premises or Situation or where the Insured has work or process carried out by others, shall be deemed to be loss arising from Damage to property used by the Insured at the Premises for the purpose of the Business. Provided that the Insurer(s will not be liable for any loss under this Section 2 unless the Insured s property lost, destroyed or Damaged is insured against such Damage (loss arising out of destruction or Damage occasioned by or arising out of explosion, rupture, collapse, bursting, cracking or overheating of any boiler, economiser or other pressure vessel, including pipes, valves and other apparatus thereof excepted and the Insurer or Insurers by which such property is insured shall have paid for, or admitted liability in respect of, such Damage unless no such payment shall have been made or liability shall not have been admitted therefore solely owing to the operation of a provision in such insurance excluding liability for loss below a specified amount or solely due to property Damaged not being insured by Section 1 of this Policy. Basis of Settlement Item No. 1 on Gross Profit The insurance under this item is limited to loss of Gross Profit due to (a REDUCTION IN TURNOVER and (b INCREASE IN COST OF WORKING and the amount payable as indemnity thereunder shall be: (a IN RESPECT OF REDUCTION IN TURNOVER: The sum produced by applying the Rate of Gross Profit to the amount by which the Turnover during the Indemnity Period shall, in consequence of the Damage, fall short of the Standard Turnover, (b IN RESPECT OF INCREASE IN COST OF WORKING: The additional expenditure necessarily and reasonably incurred for the sole purpose of avoiding or diminishing the reduction in Turnover which, but for that expenditure, would have taken place during the Indemnity Period in consequence of the Damage, but not exceeding the sum produced by applying the Rate of Gross Profit to the amount of the reduction thereby avoided; less any sum saved during the Indemnity Period in respect of such of the charges and expenses of the Business payable out of Gross Profit as may cease or be reduced in consequence of the Damage. 18