OREGON MUTUAL INSURANCE COMPANY DIVISION FIVE FIRE AND ALLIED LINES EXCEPTION PAGES

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1 RULES 9. ADDITIONAL PREMIUM CHANGES Paragraph A.2.b. is amended to read: b. Locations which are added after policy inception (including all coverages, options and causes of loss at that location) use the rates and rules in effect as of the anniversary date. Paragraph A.2.c. is amended to read: c. Any changes made to a location which was added after policy inception, use the rates and rules in effect as of the anniversary date. Under A. Calculation Of Premium, the last Paragraph is amended to read: The additional premium developed is not in addition to any applicable policy writing minimum premium. Paragraph B. Waiver of Premium is replaced by the following: No additional premiums will be waived. 10. RETURN PREMIUM CHANGES Paragraph B.1. Waiver of Premium is replaced by the following: No return premiums will be waived. 11. POLICY CANCELLATIONS Paragraph A.4. does not apply. Paragraphs B.1., B.2., and B.3. are replaced with the following: B.1. Continuous And Annual Premium Payment Policies Compute the return premium pro rata of the unearned premium for the one year or annual installment period and round to the next higher whole dollar. B.2. Prepaid Policies If cancelled during the first year, compute the return premium pro rata of the unearned premium for the first year, plus the full annual premium for the subsequent years and round to the next higher whole dollar. B.3. Policies With A Term Less Than One Year Compute the return premium pro rata of the unearned premium and round to the next higher whole dollar. 31. PERSONAL PROPERTY Rule C.9. Valuable Papers And Records Other Than Electronic Data does not apply. 35. ADDITIONAL LOCATIONS SPECIAL COINSURANCE PROVISIONS FORM The following is added to Paragraph F.2.d. (5): The Multiple Location Premium Dispersion Credit Plan may be used. Refer to Commercial Lines Manual Rating Plans Rule 4. Calculation of Premium and Dispersion Credit. 36. VALUE REPORTING FORM Paragraph G.2.b. (3) is amended to read: For renewal accounts, calculate per Paragraph (2) above. The following is added to Paragraph G.3.b. (4)(d): The Multiple Location Premium Dispersion Credit Plan may be used. Refer to Commercial Lines Manual Rating Plans Rule 4. Calculation of Premium and Dispersion Credit. 38. BUILDING AND PERSONAL PROPERTY BUILDING OPTIONS Rule 38.E. Pollutant Clean Up And Removal Additional Aggregate Limit Of Insurance does not apply. Rule 38.K. Newly Acquired Property Increased Limit does not apply. Under Rule 38.T. Spoilage Coverage, Table 38.T.4.a. Other Types is not available. Rule 38.W. Limited International Coverage Property Endorsements does not apply. April 2010 Countrywide CF-E-1

2 DIVISION FIVE FIRE AND ALLIED LINES 41. BUILDERS RISK COVERAGE OPTIONS E. Theft of Building Materials, Fixtures, Machinery, Equipment Paragraph E.4.b. is amended to read: (b) Multiply the result of Paragraph a. by the Limit of Insurance (in hundreds) for Endorsement CP If the deductible is in excess of $1,000 refer to Table 41.E.4.b. Total Amount Of Insurance Deductible Credit Deductible At Each Location Factors $100,000 or Less $2, $250,000 or Less $5, $250,000 or Less $10, Table 41.E.4.b. Factors for Deductible Coverage (c) Package Modification Factor Multiply the premium developed in Paragraph (b) by the factor as shown in Table 3. Package (d) Individual Risk Premium Modification Multiply the premium developed in Paragraph (c) by any credit or debit resulting from the application of the Individual Risk Premium Modification Plan. (e) Fixed Expense Credit Multiply the premium developed in Paragraph (d) by the factor from Table 1. Fixed Expense Credit, Additional Oregon Mutual Rules 1. in the State Exception Pages. except for the application of this credit. F. Building Materials and Supplies of Others Paragraph F.3. is replaced with the following: 3. Rate Modification Develop the additional premium as follows: (a) Multiply the Builders Risk Basic Group I rate by.25. (b) Multiply the result of Paragraph (a). by the Limit of Insurance (in hundreds) in excess of $5,000 per premises. (c) If the deductible is in excess of $1,000 refer to Table 41.E.4.b. (d) Package Modification Factor Multiply the premium developed in Paragraph (c) by the factor as shown in Table 3. Package (e) Individual Risk Premium Modification Multiply the premium developed in Paragraph (d) by any credit or debit resulting from the (f) Fixed Expense Credit Multiply the premium developed in Paragraph (e) by the factor from Table 1. Fixed Expense Credit, Additional Oregon Mutual Rules 1. in the State Exception Pages. CF-E-2 Countrywide April 2010

3 51. BUSINESS INCOME COVERAGE OPTIONS Rule 51.B.6. Limited International Coverage does not apply. Rule 51.L. Discretionary Payroll Expense does not apply. 53. EXTRA EXPENSE COVERAGE OPTIONS Rule 53.B.5. Limited International Coverage does not apply. 54. COMMON TIME ELEMENT OPTIONS Paragraph B.4.a. is replaced with the following: The rates shown in the multistate rates apply to both Public Utilities and Other Than Public Utilities. Rule 54.E.3. Modification Of One-Mile Radius does not apply. 66. LEGAL LIABILITY COVERAGE FORM Rule F. Newly Acquired Property Increased Limit Option does not apply. Refer to Additional Oregon Mutual Rules, Optional Endorsements 2.A. and 2.B. 67. MORTGAGEHOLDERS ERRORS & OMISSIONS COVERAGE Rule 67. does not apply. 68. TOBACCO IN SALES WAREHOUSES Rule 68. does not apply. 69. STANDARD PROPERTY POLICY Rule 69. does not apply. 75. EARTHQUAKE AND VOLCANIC ERUPTION ENDORSEMENT (SUB-LIMIT FORM) Paragraphs B.1. and B.2. are replaced with the following: 1. Use Commercial Property Coverage Part Declarations M2073P in place of CP DS Use Commercial Property Coverage Part Declarations M2073P with Endorsement CP The following is added to Paragraph 75.C.2.d.: When Earthquake - Volcanic Eruption Coverage is written on a blanket basis using the sublimit form, the following blanket rating procedure will apply to the Earthquake Volcanic Eruption Coverage. The earthquake premium for each Building, Business Personal Property or other rated item will be the earthquake-sublimit value multiplied times the earthquake rate for each location with this cause of loss. To figure the average rate for the earthquake sublimit, sum all earthquake limits separately from other coverages (eg. building, business personal property, business income) and all the earthquake premiums separately. Divide the total earthquake premium by the total earthquake sublimit values (per hundred) to find the average rate for the Earthquake Sublimit Cause of Loss. That earthquake average rate will then be multiplied by each earthquake sublimit for a final premium prior to the application of the Fixed Expense Credit factor from Table 1. Fixed Expense Credit in the State Exception Pages. Application of the Fixed Expense Credit factor will be the final step in the premium calculation. Paragraph 75.C.4.b. is replaced with the following: The deductible percentages to be used with this rule are the deductible percentages applicable under Rule 73.D.2. Enter the applicable deductible percentage(s) in coverage schedule CP DS 06 or in the Declarations. Paragraph 75.C.6. is replaced with the following: The loss costs and Earthquake Territories applicable under Rule 73. apply to the coverage written under this rule. April 2010 Countrywide CF-E-3

4 DIVISION FIVE FIRE AND ALLIED LINES 76. FLOOD COVERAGE ENDORSEMENT Rule 76. does not apply. 77. ELECTRONIC COMMERCE ENDORSEMENT Rule 77. does not apply. 80. INDIVIDUAL RISK PREMIUM MODIFICATION PLAN AND MULTIPLE LOCATION PREMIUM DISPERSION CREDIT PLAN The following is added: Any Individual Risk Premium Modification shall be applied in accordance with the ISO Individual Risk Premium Modification Plan in the ISO Commercial Lines Manual with the following exceptions: 2. Eligibility is amended to read: A. Application Of The Plan This Plan may be applied to: Commercial Property policies or Commercial Property part of a Package Policy which develops an annual company premium of $1,500 or more before application of the Plan, subject to the limitations contained in Paragraph B. B. Limitations This plan may not be applied under: 1. Commercial Property Policies a. To Properties rated under the: (1) Petroleum Properties Schedule. (2) Petrochemical Plants Schedule. (3) Public Utility Natural Gas Pumping Station Properties Schedule. (4) Rating Plan for Highly Protected or Superior Risks. b. To Earthquake Coverage. 4. Special Conditions is amended to read: This Plan shall be applied after the application of all other rating procedures except the application of the Fixed Expense Credit factor which will be the final premium calculation step. The Multiple Location Premium Dispersion Credit Plan may be used. Refer to Commercial Lines Manual Rating Plans Rule 4. Calculation of Premium and Dispersion Credit. The results of the Individual Risk Premium Modification and Multiple Location Dispersion Credit will be multiplied together. CF-E-4 Countrywide April 2010

5 ADDITIONAL OREGON MUTUAL RULES 1. ADDITIONAL RULE FIXED EXPENSE CREDIT A fixed expense credit will be applied to all coverages except Earthquake, Equipment Breakdown and Terrorism. If there are locations in multiple states, this credit will be applied to the policy in accordance with the rules applicable to the predominant location on the policy. The predominant location is defined as the location that generates the highest premium. Multiply the final policy premium (excluding above coverages) by the applicable Fixed Expense Credit factor from Table 1. Fixed Expense Credit in the State Exception Pages. Application of the Fixed Expense Credit factor will be the final step in the premium calculation. For policies written for a period of less than one year, the Fixed Expense Credit factor applied will be based on the short term policy premium rather than the full annual premium. The Fixed Expense Credit will apply to all minimum premiums except policy writing minimum premiums. The relativity for the policy will be determined at the effective date and not revised until the next effective date regardless of any policy changes. 2. ADDITIONAL RULE OPTIONAL ENDORSEMENTS A. Commercial Property Cluster Endorsement Accounts Receivable $25,000 On Premises $ 2,500 Off Premises Arson Reward $ 2,500 Brands and Labels Business Income Redefined Period of Restoration Electronic Data Processing Media Extra Expense $10,000 Errors and Omissions in Describing a Premises or Location Fine Arts $10,000 Fire Department Service Charge and Replacement of Fire Extinguishing Materials $10,000 Inventory and Appraisal Cost $ 2,500 Mechanical Breakdown of Computer Equipment $10,000 Money and Securities $10,000 On Premises $ 5,000 Off Premises Newly Acquired or Constructed Property Building $1,000,000 or 25% of the Building Limit Your Business Personal Property $500,000 or 10% of the BPP Limit Outdoor Property $10,000 Outdoor Signs $10,000 Personal Effects and Property of Others $10,000 Property Off-premises $10,000 Spoilage of Perishable Stock $15,000 Valuable Papers and Records (Other Than Electronic Data) $25,000 On Premises $ 2,500 Off Premises Electronic Data $10,000 On Premises $ 1,000 Off Premises Vehicle Damage to Leased Property $100,000 Water Backup $ 5,000 April 2010 Countrywide CF-E-5

6 DIVISION FIVE FIRE AND ALLIED LINES 2. Eligibility This endorsement is available for use on Commercial policies which provide Special Form Causes of Loss Property Coverage (CP 10 30). 3. Form M2629P 4. Premium Determination (a) Refer to Table 2.A.4.(a) in the State Exception Pages. The premium applies for each location covered by the policy at which there are covered buildings or buildings containing covered property. (b) Individual Risk Premium Modification Multiply the premium developed in Paragraph (a) by any credit or debit resulting from the (c) Fixed Expense Credit Multiply the premium developed in Paragraph (b) by the factor from Table 1. Fixed Expense Credit, Additional Oregon Mutual Rules 1. in the State Exception Pages. CF-E-6 Countrywide April 2010

7 B. Commercial Property Special Cluster Endorsement Accounts Receivable $25,000 On Premises $ 2,500 Off Premises Arson Reward $2,500 Brands and Labels Business Income Redefined Period of Restoration Electronic Data Processing Media Extra Expense $10,000 Errors and Omissions in Describing a Premises or Location Fine Arts $10,000 Fire Department Service Charge and Replacement of Fire Extinguishing Materials $10,000 Inventory and Appraisal Cost $ 2,500 Mechanical Breakdown of Computer Equipment $10,000 Money and Securities $10,000 On Premises $ 5,000 Off Premises Newly Acquired or Constructed Property Building $1,000,000 or 25% of the Building Limit Your Business Personal Property $ 500,000 or 10% of the BPP Limit Ordinance or Law $250,000 or 10% of the Building Limit Outdoor Property $10,000 Outdoor Signs $10,000 Personal Effects and Property of Others $10,000 Property Off-premises $10,000 Spoilage of Perishable Stock $15,000 Valuable Papers and Records (Other Than Electronic Data) $25,000 On Premises $ 2,500 Off Premises Electronic Data $10,000 On Premises $ 1,000 Off Premises Vehicle Damage to Leased Property $100,000 Water Backup $ 5, Eligibility This endorsement is available for use on Commercial policies which provide Special Form Causes of Loss Property Coverage (CP 10 30). This coverage is not available as new business on buildings which are over forty years old unless the plumbing, wiring and heating have been completely replaced within that time frame. 3. Form M2623P April 2010 Countrywide CF-E-7

8 DIVISION FIVE FIRE AND ALLIED LINES 4. Premium Determination (a) Refer to Table 2.B.4.(a) in the State Exception Pages. The premium applies for each location covered by the policy at which there are covered buildings or buildings containing covered property. (b) Individual Risk Premium Modification Multiply the premium developed in Paragraph (a) by any credit or debit resulting from the (c) Fixed Expense Credit Multiply the premium developed in Paragraph (b) by the factor from Table 1. Additional Oregon Mutual Rules 1. in the State Exception Pages. C. Commercial Property Cluster Amendment Endorsement This endorsement will be used to remove a given coverage from the Cluster when the insured requests higher limits than those provided by the Cluster and separate coverage is purchased. 2. Form M2388P 3. Premium Determination We are not allowing credit for this endorsement. D. Equipment Breakdown 1. Commercial Package Policy Equipment Breakdown Endorsement (a) Description This endorsement adds Additional Coverage Equipment Breakdown to the Causes of Loss Basic Form, Broad Form or Special Form. (b) Form M2475 (c) Premium Determination The premium is 13.55% of the final location premium. 2. Commercial Property Coverage Part Equipment Breakdown Schedule (a) Description Limits for coverages included in the Commercial Package Policy Equipment Breakdown Endorsement (M2475) may be increased with approval from Hartford Steam Boiler. The increased limit amounts are shown on this schedule. (b) Form M2479 (c) Premium Determination The premium is determined by referral to Hartford Steam Boiler. CF-E-8 Countrywide April 2010

9 E. Winery Cluster Extension Wine Leakage This endorsement is available only in conjunction with either a Winery Cluster Endorsement or Winery Special Cluster Endorsement. The Winery Cluster Extension Wine Leakage provides additional limits of coverage for Wine Leakage. 2. Form M2828P 3. Premium Determination (a) Refer to Table 2.E.3.(a) in the State Exception Pages for rate. (b) Package Modification Factor Multiply the premium developed in Paragraph (a) by the factor as shown in Table 3. Package (c) Individual Risk Premium Modification Multiply the premium developed in Paragraph (b) by any credit or debit resulting from the (d) Fixed Expense Credit Multiply the premium developed in Paragraph (c) by the factor from Table 1. Fixed Expense Credit, Additional Oregon Mutual Rules 1. in the State Exception Pages. April 2010 Countrywide CF-E-9

10 DIVISION FIVE FIRE AND ALLIED LINES F. Winery Special Cluster Endorsement Coverage is available for all otherwise acceptable wineries which maintain a backup power supply capable of keeping the air conditioning and refrigeration equipment functioning adequately to prevent spoilage of the insured property for up to 72 hours in the event of an interruption of the primary sources of power. The following coverages are grouped together into a single endorsement for the purpose of simplifying and reducing overall expense of policy issuance. Fire Department Service Charge and Replacement of Fire Extinguishing Materials Money and Securities Wine Leakage Property in Transit Accounts Receivable Valuable Papers and Records (Other Than Electronic Data) Electronic Data Errors and Omissions in Describing a Premises or Location Arson Reward Brands and Labels Mechanical Breakdown of Computer Equipment Outdoor Signs Display Booths and Equipment Consequential Loss 2. Form M2829P 3. Premium Determination (a) For each location covered by the policy at which there are covered buildings containing covered wine, wine manufacturing equipment, or stock, refer to Table 2.F.3.(a). in the State Exception Pages for rate. (b) Package Modification Factor Multiply the premium developed in Paragraph (a) by the factor as shown in Table 3. Package (c) Individual Risk Premium Modification Multiply the premium developed in Paragraph (b) by any credit or debit resulting from the (d) Fixed Expense Credit Multiply the premium developed in Paragraph (c) by the factor from Table 1. Fixed Expense Credit, Additional Oregon Mutual Rules 1. in the State Exception Pages. CF-E-10 Countrywide April 2010

11 G. Winery Cluster Endorsement Coverage is available for all otherwise acceptable wineries. This endorsement contains the same coverage provisions as the Winery Special Cluster Endorsement except that it does not provide Consequential Loss coverage. 2. Form M2830P 3. Premium Determination (a) For each location covered by the policy at which there are covered buildings containing covered wine, wine manufacturing equipment, or stock, refer to Table 2.G.3.(a). in State Exception Pages for rate. (b) Package Modification Factor Multiply the premium developed in Paragraph (a) by the factor as shown in Table 3. Package (c) Individual Risk Premium Modification Multiply the premium developed in Paragraph (b) by any credit or debit resulting from the (d) Fixed Expense Credit Multiply the premium developed in Paragraph (c) by the factor from Table 1. Fixed Expense Credit, Additional Oregon Mutual Rules 1. in the State Exception Pages. H. Winery Stock Valuation Endorsement This endorsement is used on all policies covering wineries. It provides specific conditions for valuing Finished Stock, Irreplaceable Wines and Stock in Process designed especially for winery exposures. 2. Form M Premium Determination There is no premium charge for this endorsement. I. Winery Cluster Extension Unexpected Wine Contamination This endorsement provides coverage for Unexpected Wine Contamination. Enter the limit of insurance in the declarations. 2. Eligibility This endorsement is available only in conjunction with either a Winery Cluster Endorsement or Winery Special Cluster Endorsement 3. Form M2841P 4. Premium Determination (a) Refer to Table 2.I.4.(a). in the State Exception Pages for rate. (b) Package Modification Factor Multiply the premium developed in Paragraph (a) by the factor as shown in Table 3. Package April 2010 Countrywide CF-E-11

12 DIVISION FIVE FIRE AND ALLIED LINES (c) Individual Risk Premium Modification Multiply the premium developed in Paragraph (b) by any credit or debit resulting from the (d) Fixed Expense Credit Multiply the premium developed in Paragraph (c) by the factor from Table 1. Fixed Expense Credit, Additional Oregon Mutual Rules 1. in the State Exception Pages. J. Winery Cluster Extension Unexpected Wine Oxidation This endorsement provides coverage for Unexpected Wine Oxidation. Enter the limit of insurance in the declarations. 2. Eligibility This endorsement is available only in conjunction with either a Winery Cluster Endorsement or Winery Special Cluster Endorsement 3. Form M2842P 4. Premium Determination (a) Refer to Table 2.J.4.(a). in the State Exception Pages for rate. (b) Package Modification Factor Multiply the premium developed in Paragraph (a) by the factor as shown in Table 3. Package (c) Individual Risk Premium Modification Multiply the premium developed in Paragraph (b) by any credit or debit resulting from the (d) Fixed Expense Credit Multiply the premium developed in Paragraph (c) by the factor from Table 1. Fixed Expense Credit, Additional Oregon Mutual Rules 1. in the State Exception Pages. CF-E-12 Countrywide April 2010

13 3. ADDITIONAL RULE PACKAGE MODIFICATION FACTORS Package modification factors will be applied in accordance with Division Nine Multiple Line Commercial Package Policy rules with the following exceptions: A. Rule 1.C. Eligibility of APPLICATION OF THIS DIVISION is replaced with the following: A Commercial Package Policy must include two or more Coverage Parts or for auto only, a Businessowners Policy must be written. B. Rule 7.A.1. Eligibility of PACKAGE MODIFICATION FACTORS is replaced with the following: Any Coverage Form in the Commercial Property Coverage Part that at least provides Building or Business Personal Property Coverage. Such coverage must be written with the 80% or higher coinsurance clause (90% for blanket insurance). The Physicians And Surgeons Equipment Coverage Form in the Commercial Inland Marine Coverage Part may be substituted for this requirement. When the Physicians And Surgeons Equipment Coverage Form is used, coverage must not be limited to cover only equipment and instruments usually carried by the insured. C. The following is added to Rule 7.B.1. Application of PACKAGE MODIFICATION FACTORS: e. Liquor Liability D. Rule 8.A.2. General of PREMIUM DEVELOPMENT is replaced with the following: If eligible (see Rules 7.A. and 7.B.), apply the appropriate Package Modification Factor(s) to individual Coverage Part rates or charges to develop the premiums for the exposures covered. Package Modification Factors are shown in Table 3. Package Modification Factors, Additional Oregon Mutual Rules 3. in the State Exception Pages. E. Rule 8.C. Commercial General Liability Coverage Part of PREMIUM DEVELOPMENT is replaced with the following: Apply applicable Package Modification Factor to those exposures which are necessary, incidental or usual to the business operations conducted from the premises insured under direct damage forms in the Commercial Property Coverage Part Section of the policy or the Physicians And Surgeons Equipment Coverage Form. April 2010 Countrywide CF-E-13