Chubb Group of Insurance Companies 15 Mountain View Road, Warren, New Jersey 07059

Transcription

1 Chubb Group of Insurance Companies 15 Mountain View Road, Warren, New Jersey Executive Risk Indemnity Inc Centre Road, Wilmington, Delaware SAFETY NET INTERNET LIABILITY POLICY In consideration of payment of the premium and subject to the Declarations, limitations, conditions, provisions and other terms of this Policy, the Company agrees with the Insured as follows: Insuring Clause 1. The Company shall pay on behalf of each Insured all Loss on account of any Claim first made during the Policy Period arising out of the Insured's Internet Activities which occurred on or after the Retroactive Date set forth in ITEM 7 of the Declarations. Definitions 2. When used herein: (a) Claim means: (i) any written demand for monetary damages or non-pecuniary relief; (ii) any civil proceeding or arbitration commenced by the service of a complaint or similar pleading or notification; or (iii) any written request to toll or waive a statute of limitations relating to a potential Claim, against any Insured for Internet Activities or Related Internet Activities, including any appeal therefrom. A Claim will be deemed to be first made when any of the foregoing is first received by an Insured. (b) Defense Costs means that part of Loss consisting of reasonable costs, charges, fees (including but not limited to attorneys' fees and experts' fees) and expenses (other than regular or overtime wages, salaries or fees of the directors, officers or employees of the Named Insured) incurred in defending Claims, and the premium for appeal, attachment or similar bonds. (c) (d) Employee means any individual whose labor or service is engaged by and directed by the Named Insured. This includes part-time, seasonal, leased and temporary employees as well as volunteers. Employee does not include independent contractors. Insured means any of the following persons or entities: Individual. If the Named Insured shown in the Declarations is an individual, the Named Insured is an Insured, but only for the conduct of a business of which the Named Insured is the sole owner. Corporation. If the Named Insured shown in the Declarations is a corporation or organization other than a partnership or joint venture, the Named Insured is an Insured. The Named Insured's directors and officers are Insureds, but only with respect to their duties in the operation of the Named Insured's business. Partnerships or Joint Ventures. If the Named Insured shown in the Declarations is a partnership or joint venture, the Named Insured is an Insured. The Named Insured's partners are also Insureds, but only for the conduct of the Named Insured's business. However, no person or organization is covered for the conduct of any current or past partnership or joint venture not named in the Declarations. Form C30846 (7/2000 ed.) 1 Catalog No. SNp-I

2 Limited Liability Organizations. If the Named Insured shown in the Declarations is a limited liability company or limited liability partnership, the Named Insured is an Insured. The Named Insured's members, partners or managers are also Insureds, but only for the conduct of the Named Insured's business. However, no person or organization is covered for the conduct of any current or past limited liability organization not named in the Declarations. Employees. Employees of the Named Insured are Insureds, but only for the conduct of the Named Insured's business within the scope of their employment. Subsidiaries. Each Subsidiary of the Named Insured is an Insured. Such Subsidiary's directors, officers and Employees are Insureds, but only with respect to their duties in the operation of such Subsidiary's business. Notwithstanding the foregoing, any Subsidiary and any director, officer or Employee who is an Insured by virtue of his or her affiliation with a Subsidiary, is an Insured only with respect to Claims based solely on Internet Activities occurring during the time that the Subsidiary is a Subsidiary. Estates and Legal Representatives. Subject to the limitations, conditions, provisions and other terms of this Policy, coverage shall extend to Claims for the Internet Activities of Insured Persons made against the estates, heirs, legal representatives or assigns of such Insured Persons who are deceased, incompetent, insolvent or bankrupt. (e) (f) Insured Person means any individual who is an Insured. Internet Activities means: (i) display or other use of Matter on an Internet Site; (ii) transmission of Matter via an Internet Site; or (iii) dissemination of Matter by any other means of publication or communication shown in ITEM 8 of the Declarations. (g) (h) (i) (j) (k) Internet Site means any internet site shown in ITEM 8 of the Declarations. Loss means any amount which an Insured becomes legally obligated to pay on account of any Claim, including but not limited to damages (including punitive and exemplary damages, where insurable by law), judgments, settlements, costs and Defense Costs. Loss does not include (i) fines or penalties imposed by law or the multiplied portion of any multiplied damage award; or (ii) matters uninsurable under the law pursuant to which this Policy is construed. Matter means printed, verbal, numerical, audio or visual expression, or any other expression, regardless of the medium upon which such expression is fixed. Named Insured means the entity named in ITEM 1 of the Declarations. Policy Period means the period of time specified in the Declarations, subject to prior termination in accordance with the Cancellation/Non-Renewal Provision of this Policy. If this period is less than or greater than one (1) year, then the Limits of Liability specified in the Declarations shall be the Company's maximum limit of liability under this Policy for the entire period. Form C30846 (7/2000 ed.) 2 Catalog No. SNp-I

3 (l) (m) (n) (o) Pollutants means any substance located anywhere in the world exhibiting any hazardous characteristics as defined by, or identified on a list of hazardous substances issued by, the United States Environmental Protection Agency or a state, county, municipality or locality counterpart thereof. Such substances shall include, without limitation, solids, liquids, gaseous or thermal irritants, contaminants or smoke, vapor, soot, fumes, acids, alkalis, chemicals or waste materials. Pollutants shall also mean any other air emission, odor, waste water, oil or oil products, infectious or medical waste, asbestos or asbestos products and any noise. Product means any tangible property offered for sale or otherwise distributed by or through any Insured. Product does not include Matter disseminated over an Internet Site. Related Internet Activities means all Internet Activities based on, arising out of, directly or indirectly resulting from, in consequence of, or in any way involving the same or related facts, circumstances, situations, transactions or events, or the same or related series of facts, circumstances, situations, transactions or events. Subsidiary means any organization during any time in which more than fifty percent (50%) of the outstanding securities or voting rights representing the present right to vote for election of directors is owned or controlled, directly or indirectly, in any combination, by the Named Insured. Exclusions 3. The Company shall not be liable for Loss on account of any Claim made against any Insured: Bodily Injury/ Property Damage Pollution (a) for or arising out of bodily injury, sickness, disease or death of any person, or damage to or destruction of any tangible property, including loss of use thereof; (b) arising out of (i) the actual, alleged or threatened discharge, release, escape, dispersal or disposal of Pollutants into or on real or personal property, water or the atmosphere; or (ii) any direction or request that any Insured test for, monitor, clean up, remove, contain, treat, detoxify or neutralize Pollutants, or any voluntary decision to do so; including but not limited to any Claim for financial loss to any Insured or their security holders or creditors based upon, arising from, or in consequence of the matters described in (i) or (ii) of this Exclusion (b); Fraud Anti-Trust Breach of Contract (c) arising out of any fraudulent, criminal or malicious act or omission by any Insured; (d) arising out of allegations of price fixing, restraint of trade, monopolization, unfair trade practices, or any actual or alleged violation of (i) the Federal Trade Commission Act, the Sherman Anti-Trust Act, the Clayton Act, or any other federal statutory provision involving anti-trust, monopoly, price fixing, price discrimination, predatory pricing or restraint of trade activities; (ii) any rules or regulations promulgated under or in connection with the statutes described in clause (i) of this Exclusion (d); or (iii) any similar provision of any federal, state, or local statute, rule or regulation or the common law of any federal, state or local jurisdiction; (e) arising out of any actual or alleged liability of the Insured under any contract or agreement; provided, however, that this Exclusion (e) shall not apply to liability that would have attached to the Insured in the absence of such contract or agreement; Form C30846 (7/2000 ed.) 3 Catalog No. SNp-I

4 Employment Practices Product Liability and Infringement Patent Infringement Lotteries (f) brought by any Employee, former Employee or prospective Employee based on or directly or indirectly arising out or resulting from the employment relationship or the nature, terms or conditions of employment, including but not limited to claims of discrimination, harassment, wrongful discharge, breach of contract, employment-related defamation or workplace torts; (g) arising out of any actual or alleged (i) wrong description of the price or authenticity of any Product; (ii) failure of any Product to conform with advertised quality or performance, or otherwise to satisfy any standard of quality or performance; or (iii) sale or offer for sale of any Product that actually or allegedly infringes upon the name, design or logo of another product; (h) arising out of any actual or alleged infringement, contribution to infringement, or inducement of infringement of any patent; (i) arising out of any actual or alleged act or omission in connection with any contest, lottery, promotional game or other game of chance; Royalties Securities Governmental Actions Prior Claims Prior and Pending Litigation Limit of Liability and Deductible (j) by any writer, lyricist, artist or other person or organization under contract with an Insured, or such person s or organization s heirs or assigns, seeking against an Insured an accounting or recovery of profits, royalties, fees or other amounts alleged to be due, or any Claim by any such person or organization against an Insured alleging excessive or unwarranted fees, compensation, or other charges of any kind made by an Insured; (k) any actual or alleged violation of the Securities Act of 1933, the Securities Exchange Act of 1934, the Trust Indenture Act of 1939, the Investment Company Act of 1940, the Investment Advisers Act of 1940, any similar state "blue sky" statute, any rule or regulation promulgated under any of the foregoing, or any amendment to any of the foregoing or any provision of the common law imposing liability in connection with the offer, sale or purchase of securities; (l) brought by any federal, state or local regulatory agency or other administrative body alleging the violation of any federal, state or local laws or regulations; (m) based on or directly or indirectly arising out of or resulting from any act, error, omission, fact, circumstance, situation, transaction, event, or decision which, prior to the inception date, is the subject of any notice or Claim under any other policy of insurance, including but not limited to any policy of which this Policy is a renewal or replacement; or (n) based on or directly or indirectly arising out of or resulting from any act, error, omission, fact, circumstance, situation, transaction, event, or decision underlying or alleged in any prior and/or pending litigation or administrative or regulatory proceeding as of the inception date in ITEM 3 of the Declarations. 4. All Loss arising out of Related Internet Activities of any Insured shall be deemed one (1) Loss, regardless of the number of Claims made, claimants or Insureds against whom such Claims are made, and shall be deemed to have originated at the time a Claim is first made against any Insured alleging any such Related Internet Activities. Only the Policy in effect at that time, if any, shall apply to such Loss. The Company's maximum liability for each Loss shall be the Limit of Liability for each Loss set forth in the Declarations. The Company's maximum aggregate liability for all Loss on account of all Claims first made during the Policy Period shall be the Limit of Liability for each Policy Period set forth in the Declarations, and shall apply regardless of whether the Policy Period is greater than or less than one (1) year. Form C30846 (7/2000 ed.) 4 Catalog No. SNp-I

5 The Company's maximum liability shall apply only to that part of each Loss which is excess of the Deductible set forth in the Declarations, and such Deductible shall be borne by the Insured at its own risk and uninsured. Reporting and Notice 5. The Insureds shall, as a condition precedent to exercising their rights hereunder, give to the Company written notice as soon as practicable of any Claim made against any Insured, but in no event later than sixty (60) days from the date such Claim is first made against any Insured. If, during the Policy Period or any applicable Extended Reporting Period, an Insured first becomes aware of circumstances which could give rise to a Claim and gives written notice of such circumstances to the Company, then any Claim subsequently arising from such circumstances shall be considered to have been made during the Policy Period or the Extended Reporting Period in which the circumstances were first reported to the Company. The Insureds shall, as a condition precedent to exercising their rights hereunder, give to the Company such information and cooperation as it may reasonably require, including but not limited to a description of the Claim or circumstances, the nature of the Internet Activities, the nature of the alleged or potential damage, the names of the actual or potential claimants, and the manner in which the Insureds first became aware of the Claim or circumstances. Defense and Settlement 6. The Company shall have the right and duty to defend any Claim covered by this Policy. Coverage shall apply even if the allegations are groundless, false or fraudulent. The Company's duty to defend shall cease upon the exhaustion of the Company's applicable Limits of Liability(ies) set forth in ITEM 4 of the Declarations. An Insured shall have the right to associate with the Company in the defense of any Claim, subject to the provisions of this section. The Company may make any investigation it deems necessary and may, with the consent of the Named Insured, make any settlement of any Claim it deems expedient. If the Named Insured withholds consent to such settlement, the Company's liability for all Loss on account of such Claim shall not exceed the amount for which the Company could have settled such Claim, plus costs, charges and expenses accrued as of the date such settlement was proposed in writing to such Named Insured. The Insureds agree not to settle any Claim, incur any Defense Costs or otherwise assume any contractual obligation or admit any liability with respect to any Claim without the Company's written consent, which shall not be unreasonably withheld. The Company shall not be liable for any settlement, Defense Costs, assumed obligation or admission to which it has not consented. The Insureds agree to provide the Company with all information, assistance and cooperation which the Company reasonably requests and agrees that in the event of a Claim the Insureds will do nothing that may prejudice the Company's position or its potential or actual rights of recovery. Defense Costs are part of and not in addition to the Limits of Liability set forth in the Declarations, and the payment by the Company of Defense Costs reduces and may exhaust such Limits of Liability. Form C30846 (7/2000 ed.) 5 Catalog No. SNp-I

6 Allocation 7. In the event of a Claim arising out of both Internet Activities covered by this Policy, and other activities not covered by this Policy, the Company shall only be liable under this Policy for that portion of any Loss that is fairly attributable to the covered Internet Activities. Extended Reporting Period 8. If this Policy is not renewed for any reason or is canceled for any reason other than for nonpayment of premium, the Named Insured will have the right to purchase an extension of the coverage granted by this Policy for Claims first made during the period of one (1) year after the effective date of such cancellation or non-renewal (the Extended Reporting Period ), but only if such Claims are for otherwise covered Internet Activities occurring before the effective date of such cancellation or non-renewal and on or after the Retroactive Date set forth in ITEM 7 of the Declarations. The premium for this Extended Reporting Period will be seventy-five percent (75%) of the total premium set forth in ITEM 6 of the Declarations, or if the Policy Period is greater than one (1) year, seventy-five percent (75%) of the annualized premium. The additional premium for the Extended Reporting Period must be paid within thirty (30) days after the effective date of the cancellation or non-renewal of this Policy, and will be deemed to have been fully earned immediately as of the inception of the Extended Reporting Period. Spousal Liability Coverage The Company s Limits of Liability for Loss from Claims first made during the Extended Reporting Period will be part of, and not in addition to, the Company s Limits of Liability for the Policy Period, as stated in ITEM 4(B) of the Declarations, which is applicable to all Loss from all Claims for which this Policy provides coverage. 9. If a Claim against an Insured Person includes a Claim against the Insured Person s lawful spouse, solely by reason of such person's status as a spouse, or such spouse's ownership interest in property which the claimant seeks as recovery for Internet Activities of the Insured Person, all loss which the spouse becomes legally obligated to pay on account of the Claim shall be treated as Loss which the Insured Person becomes legally obligated to pay on account of the Claim made against such Insured Person. All limitations, conditions, provisions and other terms of coverage applicable to the Insured Person's Loss shall also be applicable to the spousal loss. However, coverage shall not apply to the extent any Claim alleges any act or omission by the Insured Person's spouse that would not otherwise be covered under this Policy. Other Insurance Representations and Severability 10. If any Loss covered by this Policy is also covered under any other valid prior or current insurance policy(ies), including any such general liability insurance policy, then this Policy shall cover such Loss, subject to its limitations, conditions, provisions and other terms, only to the extent that the amount of such Loss is in excess of the amount of payment from such other insurance, whether such other insurance is stated to be primary, contributory, excess, contingent or otherwise, unless such other insurance is written only as specific excess insurance over the Limits of Liability in this Policy. 11. In granting coverage to any one of the Insureds, the Company has relied upon the declarations and statements in the written Application for this Policy. All such declarations and statements are the basis of such coverage and shall be considered as incorporated in and constituting part of this Policy. Such written Application for coverage shall be construed as a separate Application for coverage by each Insured. With respect to the declarations and statements contained in such written Application, no statement or omission in the Application or knowledge possessed by any Insured shall be imputed to any other Insured for the purpose of determining if coverage is available, except for material facts or information known to the person(s) who signed the Application. In the event that any of the particulars or statements in the Application are untrue, this Policy will be void with respect to any Insured who knew of such untruth or to whom such knowledge is imputed. Form C30846 (7/2000 ed.) 6 Catalog No. SNp-I

7 Territory 12. Coverage under this Policy shall extend to Internet Activities occurring anywhere in the world, but only with respect to Claims made against the Insureds in the United States, its territories or possessions, or Canada. Notice 13. Notice to the Company under this Policy shall be given in writing addressed to: Chubb Executive Risk 82 Hopmeadow Street Simsbury, CT Such notice shall be effective on the date of receipt by the Company at such address. Subrogation Action Against the Company Bankruptcy Authorization Alteration and Assignment Cancellation/ Non-Renewal 14. In the event of any payment under this Policy, the Company shall be subrogated to the extent of such payment to all the Insureds rights of recovery, and the Insureds shall execute all papers required and shall do everything necessary to secure and preserve such rights, including the execution of such documents necessary to enable the Company effectively to bring suit in the name of the Insureds. 15. No action shall lie against the Company unless, as a condition precedent thereto, there has been full compliance with all the terms of this Policy. No person or organization shall have any right under this Policy to join the Company as a party to any action against the Insured to determine the Insured's liability nor shall the Company be impleaded by the Insured or the Insured s legal representatives. 16. Bankruptcy or insolvency of an Insured, or the estate of an Insured, shall not relieve the Company of its obligations nor deprive the Company of its rights under this Policy. 17. By acceptance of this Policy, the Named Insured agrees to act on behalf of all Insureds with respect to the giving and receiving of any notice of claim or termination, the payment of premiums and the receiving of any return premiums that may become due under this Policy, the negotiation, agreement to and acceptance of endorsements, and the giving or receiving of any notice provided for in this Policy, and the Insureds agree that such Named Insured shall act on their behalf. 18. No change in, modification of, or assignment of interest under this Policy shall be effective except when made by a written endorsement to this Policy which is signed by an authorized representative of the Company. 19. This Policy shall terminate at the earliest of the following times: (a) upon receipt by the Company of written notice of cancellation from the Named Insured; (b) upon expiration of the Policy Period as set forth in the Declarations; (c) ten (10) days after receipt by the Named Insured of a written notice of cancellation from the Company for failure to pay premium when due; (d) thirty (30) days after receipt by the Named Insured of a written notice of cancellation from the Company for failure to pay the deductible amount; or (e) at such other time as may be agreed upon by the Company and the Named Insured. The Company shall refund the unearned premium computed at customary short rates if the Policy is terminated by the Named Insured. Under any other circumstances, the refund shall be computed pro rata. The Company shall have no obligation to renew this Policy upon its expiration or termination. Form C30846 (7/2000 ed.) 7 Catalog No. SNp-I

8 In witness whereof, the Company has caused this Policy to be executed on the Declarations Page. Secretary President Form C30846 (7/2000 ed.) 8 Catalog No. SNp-I