SPECIE LEASE INSURANCE
NOTICE: This is an occurrence form. Words and phrases in bold (other than titles and section headings) have special meaning (See section II and parenthetical references). Coverage afforded under this Insurance Policy (herein " Policy " or " Insurance ") is subject to the Limits of Liability (see Section IV) set forth in the declarations issued herewith (herein " Policy Declarations ") which may be completely exhausted by the payment of Ascertained Net Loss in excess of the applicable Deductible (See Section V) amount also set forth in the Policy Declarations . Please review the coverage afforded under this Policy carefully and discuss the coverage hereunder with your insurance agent or broker.
INSURING CLAUSE
In consideration of the payment of the applicable premium and in reliance upon the statements in the application which is made a part of this Insurance Policy and subject to the Limits of Liability , applicable Deductible , exclusions, conditions and other terms of this Insurance , Underwriters agree to indemnify the Insured for the Ascertained Net Loss arising from physical loss of or physical damage to Insured Specie resulting from an Occurrence during the Policy Period .
DEFINITIONS
" Ascertained Net Loss " means the non-specie United States Dollar (USD) amount necessary to replace that portion of the Insured Specie , which has been physically lost or physically damaged, in the same weight, purity and format as existed on the date of loss, whether in coin, bar, wire, leaf, target, pellet or other form, less compensation, salvage and any other recoveries received by an Insured from any party whatsoever. The Insured shall provide Underwriters with at least two bids from competing precious metals wholesale suppliers to establish Ascertained Net Loss as the lower of the two. In the event that the Named insured contends that certain Insured Specie should be given a higher valuation due to its numismatic characteristics, the Ascertained Net Loss shall be calculated using the mean USD valuation given by three independent appraisers, retained by the Named Insured , the Underwriters and by agreement between the two appraisers thus retained. Fifty percent of the total cost of the three appraisals shall be deducted from the Ascertained Net Loss .
" Extraordinary Perils " means:
certified acts of terrorism;
governmental confiscation or requisition;
any chemical, biological, bio-chemical, or electromagnetic weapon;
war, civil war, revolution, rebellion, insurrection and resulting civil strife;
any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter;
Ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel;
The radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof;
the radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive matter, not including radioactive isotopes, other than nuclear fuel, when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful purposes;
" Insured " means the entity (herein " Named Insured ") listed in the Policy Declarations , together with its current and former partners, managers, members, directors, officers and employees.
" Insured Specie " means Specie which pursuant to an Underlying Lease is within the care, custody or control of, or placed in transit by, those insured pursuant to the terms of Underlying Insurance .
" Occurrence " means an event or series of related events giving rise to physical loss of or physical damage to Insured Specie .
" Policy Period " means the period of time between the incept and expiry dates and times shown in the Policy Declarations , unless the Policy is cancelled as provided in Section IX, in which case the Policy Period ends on the cancellation date and time.
" Specie " means gold and silver, whether or not alloyed with other metals, and whether in coin, round, medallion, bar, pellet, wire, sheet, scrap or other similar form.
" Underlying Insurance " means the insurance policy or policies scheduled on the Policy Declarations , which apply to Insured Specie .
" Underlying Lease " means the particular lease agreement(s) referenced on the Policy Declarations , by which Underwriters have deemed the subject Specie thereof to be Insured Specie .
" Underwriters " means those particular underwriters at Lloyd's of London who have subscribed to this Policy as evidenced by the line slip issued herewith. Further, the Lead Underwriter(s) (and Agreement Parties if applicable) are authorized to exercise rights under this Policy on their own behalf and on behalf of all Underwriters participating in this Insurance , unless otherwise expressly stated. Finally, the subscribing Underwriters ’ obligations under this Policy are several and not joint and are thus limited solely to the extent of their individual subscriptions.
EXCLUSIONS
No Underwriter shall be deemed to provide cover and to be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose that Underwriter to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America. Further, this Policy excludes coverage for Ascertained Net Loss caused by or arising from:
Extraordinary Perils occurring anywhere in the world;
Market volatility or delay, no matter how occurring and any consequential losses;
The use or operation, as a means for inflicting harm, of any computer, computer system, computer software program, malicious code, computer virus or process or any other electronic system;
Losses directly or indirectly arising from financial default or non-payment or when a company can no longer or chooses to no longer meet its debt obligations. Notwithstanding the foregoing, this exclusion does not apply to fraudulent or dishonest refusal by or inability of a third-party to return Insured Specie in violation of an Underlying Lease .
Loss arising directly from the insolvency, administration, voluntary arrangements with creditors, bankruptcy or receivership of the Insured .
Theft or dishonesty committed by or in collusion with any Insured .
LIMITS OF LIABILITY
The Limit of Liability stated in the Declarations as "per Occurrence" is the limit of the Underwriters ' liability for Ascertained Net Loss arising out of a single Occurrence .
The Limit of Liability stated in the Declarations as "Aggregate" is the total limit of the Underwriters ' liability for all Ascertained Net Loss arising out of each and every Occurrence taking place within the Policy Period .
The Limit of Liability stated in the Declarations as "per Package" is the total limit of the Underwriters ' liability for Ascertained Net Loss pertaining to any single package in transit. The per Package limit may vary depending upon the commercial courier service employed as detailed in the Policy Declarations .
The Limit of Liability stated in the Declarations as "per Shipment" is the total limit of the Underwriters ' liability for Ascertained Net Loss pertaining to one or more packages in a single shipment. The per Shipment limit may vary depending upon the commercial courier service employed as detailed in the Policy Declarations .
DEDUCTIBLE
The Deductible stated in the Declarations as "Each and Every Loss" is the amount that Underwriters shall deduct from Ascertained Net Loss payments to the Insured arising out Occurrences other than sendings.
The Deductible stated in the Declarations as "Sendings" is the amount that Underwriters shall deduct from Ascertained Net Loss payments to the Insured arising out of sendings Occurrences .
The applicable Deductible is not included within and does not serve to reduce the applicable Limit of Liability .
CONDITIONS
As conditions precedent to coverage under this Insurance :
The Insured undertakes that premium will be paid in full to Underwriters within 60 days of inception of this Policy . If the premium due under this Policy has not been so paid to Underwriters by the 60th day from the inception of this Policy , Underwriters shall have the right to cancel this Policy pursuant to Section IX, below. Where the premium is to be paid through a London Market Bureau, payment to Underwriters will be deemed to occur on the day of delivery of a premium advice note to the Bureau.
The Insured , upon knowledge of any Occurrence likely to give rise to a claim hereunder shall give written notice as soon as practicable to the Underwriters through Dominion Insurance Services (named in item 7 of the Policy Declarations ) who through the Underwriters , shall appoint an adjuster to assess the loss on behalf of the Underwriters . The Insured , as often as may be reasonably required, shall submit to examinations under oath by any person named by the Underwriters and shall subscribe the same; and as often as may be reasonably required, shall produce for examination all books of accounts, bills, invoices and other vouchers, or certified copies thereof if original be lost, at such reasonable time and place as may be designated by the Underwriters or their representatives, and shall permit extracts and copies thereof to be made.
The Insured shall assign all rights of recovery against any party responsible for damage to or loss of Insured Specie , to the full extent of Ascertained Net Loss payments therefore by Underwriters , so long as the Insured would not suffer irreparable damage to a key commercial relationship by doing so.
TERRITORY
This Insurance applies to Occurrences which take place anywhere in the world.
SERVICE OF SUIT
In the event of the failure of the Underwriters to pay any amount claimed to be due under this Insurance , the Underwriters , at the request of the Named Insured , will submit to the jurisdiction of a court of competent jurisdiction within the United States. This clause does not constitute and should not be understood to constitute an agreement by Underwriters that an action is properly maintained in a specific forum, nor may it be construed as a waiver of the Underwriters ' rights to commence an action in a court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another court as permitted by the laws of the United States or of any State of the United States, all of which rights the Underwriters expressly reserve. It is further agreed that in any suit instituted against any one of them upon this Policy the Underwriters will abide by the final decision of the court or of any Appellate Court in the event of an appeal.
Mendes & Mount (named in item 8 of of the Policy Declarations ) is authorized and directed to accept service of process on behalf of the Underwriters in any such suit and/or upon the request of the Named Insured to give written undertaking to the Named Insured that they will enter a general appearance upon Underwriters ' behalf in the event such a suit shall be instituted. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, Underwriters hereon hereby designate the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute or his successor or successors in office, as their true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Named Insured or any beneficiary hereunder arising out of this policy of insurance, and hereby designate the persons named in Item 8 of the Declarations as the persons to whom the said officer is authorized to mail such process or a true copy thereof.
CANCELLATION
Cancellation by the Insured . The Named Insured may cancel this Policy by submitting a written cancellation request to Underwriters through Dominion Insurance Services specifying a future, requested cancellation date.
Cancellation by Underwriters . Underwriters may cancel this Insurance by mailing or delivering to the Named Insured written notice specifying one or more of the following reasons before the effective date of cancellation as follows:
10 days for non-payment of premium; or
30 days for material misrepresentation, substantial and unforeseeable change in the risk insured, substantial breaches of contractual duties, conditions or warranties, or for Policy nonrenewal.
Return Premium . Upon cancellation by Underwriters , return premium shall be calculated on a pro rata basis, unless an Occurrence has taken place during the Policy Period prior to the cancellation date which gives rise to a valid claim under this Policy , in which case, the entire Policy premium shall be deemed to be fully earned. Upon cancellation by the Named Insured earned premium shall be computed as follows:
For insurance written for one year:
Days In Force
%
Days In Force
%
Days In Force
%
Days In Force
%
1 5 66-69 29 154-156 53 256-260 77
2 6 70-73 30 157-160 54 261-264 78
3-4 7 74-76 31 161-164 55 265-269 79
5-6 8 77-80 32 165-167 56 270-273 (9 months) 80
7-8 9 81-83 33 168-171 57 274-278 81
9-10 10 84-87 34 172-175 58 279-282 82
11-12 11 88-91 (3 months) 35 176-178 59 283-287 83
13-14 12 92-94 36 179-182 (6 months) 60 288-291 84
15-16 13 95-98 37 183-187 61 292-296 85
17-18 14 99-102 38 188-191 62 297-301 86
19-20 15 103-105 39 192-196 63 302-305 (10 months) 87
21-22 16 106-109 40 197-200 64 306-310 88
23-25 17 110-113 41 201-205 65 311-314 89
26-29 18 114-116 42 206-209 66 315-319 90
30-32 (1 month) 19 117-120 43 210-214 (7 months) 67 320-323 91
33-36 20 121-124 (4 months) 44 215-218 68 324-328 92
37-40 21 125-127 45 219-223 69 329-332 93
41-43 22 128-131 46 224-228 70 333-337 (11 months) 94
44-47 23 132-135 47 229-232 71 338-342 95
48-51 24 136-138 48 233-237 72 343-346 96
52-54 25 139-142 49 238-241 73 347-351 97
55-58 26 143-146 50 242-246 (8 months) 74 352-355 98
59-62 (2 months) 27 147-149 51 247-250 75 356-360 99
63-65 28 150-153 (5 months) 52 251-255 76 361-365 (12 months) 100
% = Percentage of annual premium deemed earned
For Insurance written for more or less than one year:
If the Insurance has been in force for 12 months or less, apply the standard short rate table for annual insurances to the full annual premium determined as for Insurance of a one year term.
If the Insurance has been in force for more than 12 months:
Determine full annual premium as for Insurance of a one year term.
Deduct such premium from the full Insurance premium, and on the remainder calculate the pro rata earned premium on the basis of the ratio of the length of time beyond one year the insurance has been in force to the length of time beyond one year for which the insurance was originally written.
Add premium produced in accordance with items a and b to obtain earned premium during full period the Insurance has been in force.
OTHER INSURANCE
This Insurance specifically applies in excess of all Underlying Insurance as well in excess of any other valid, collectable insurance available to pay Ascertained Net Loss unless such insurance is written only as specific excess insurance over the Limit of Liability of this Policy .
SEVERABILITY
If a provision of this Policy or the application of one of its provision to a person or circumstance is held invalid by a court of competent jurisdiction, the remainder of this Policy shall be given effect without the invalid provision or application. The provisions of this Policy are severable.