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HomeMy WebLinkAbout10-22161/R OF Tarr ?'h;DFiCE 1Q r? ?t=? • f ?' TAF?Y 2010 KAR 31 PH 3: 20 CIPRIANI & WERNER, P.C. BY: E. Ralph Godfrey, Esquire Attorney for Plaintiff Attorney I.D. No. 77052 1011 Mumma Road C?j?' 'w l ?{ I Y Suite 201 PEP -3 {Vn?dl? Lemoyne, PA 17043 (717) 975-9600 MILLERS CAPITAL INSURANCE COMPANY, individually and as assignee and subrogee of HERSHEY REAL ESTATE SERVICES, Plaintiff IN THE COURT OF COMMON PLEAS, CUMBERLAND COUNTY, PENNSYLVANIA No. 10-g11(p l21dI1-&M V. Civil Action - Law ERIE INSURANCE EXCHANGE, ERIE INSURANCE GROUP, AND ERIE INSURANCE PROPERTY & CASUALTY COMPANY, Defendants NOTICE YOU HAVE BEEN SUED IN COURT. If you wish to defend against the claims set forth in the following pages, you must take action within twenty (20) days after this Complaint and Notice are served, by entering a written appearance personally or by attorney and filing in writing with the Court your defenses or objections to the claims set forth against you. You are warned that if you fail to do so the case may proceed without you and a judgment may be entered against you by the Court without further notice for any money claimed in the Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or property or other rights important to you. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. NOTICA USTED HA SIDO DEMANDADO/A EN CORTE. Si usted desea defenderse de las demandas que se presentan mas adelante en las siquientes paginas, debe tomar accion dentro de los proximos veinte (20) dias despues de la notification de ests Demanda y Aviso radicando personalmente o por medio de un abogado una comparecencia escrits y radicando en la Corte por escrito sus defensas de, y objecciones a, las demandas presentadas aqui en contra suya. Se le advierte de que si usted falla de tomar accion como se describe anteriormente, el caso puede proceder sin usted y un fallo por cualquier suma de dinero reclamads en la demanda o cualquier otra reclamation or remedio solicitado por el demandante puede ser dictado en contra suya por la Corte sin mas aviso adicional. Usted puede perder dinero o propiedad u otros derechos importantes para usted. USTED DEBE LLEVAR ESTE DOCUMENTO A SU ABOGADO INMEDIATAMENTE. SI USTED NO TIENE UN ABOGADO O NO PUEDE PAGARLE A UNO, LLAME O VAYA A LA SIGUIENTE OFICINA PARA AVERIGUAR DONDE PUEDE ENCONTRAR ASISTENCIA LEGAL. Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 Cumberland County Bar Association 32 South Bedford Street Carlisle, PA 17013 Telephone No. (717) 249-3166 4ga.oo PIO 14TrY et *0111a e 0139151 MILLERS CAPITAL INSURANCE IN THE COURT OF COMMON COMPANY, individually and as assignee PLEAS, CUMBERLAND COUNTY, and subrogee of HERSHEY REAL PENNSYLVANIA ESTATE SERVICES, No. Plaintiff V. Civil Action - Law ERIE INSURANCE EXCHANGE, ERIE INSURANCE GROUP, AND ERIE INSURANCE PROPERTY & CASUALTY COMPANY, Defendant COMPLAINT AND NOW, comes the Plaintiff, MILLERS CAPITAL INSURANCE COMPANY, individually and as assignee and subrogee of HERSHEY REAL ESTATE SERVICES, by and through its counsel, CIPRIANI & WERNER, P.C., and files this Complaint, and in support thereof avers the following: PARTIES 1. Plaintiff, MILLERS CAPITAL INSURANCE COMPANY, individually and as assignee and subrogee of Hershey Real Estate Services, is a Pennsylvania corporation with a principal place of business located at 805 North Front Street, Harrisburg, Dauphin County, Pennsylvania 17108 (hereinafter "Plaintiff") 2. Defendant, ERIE INSURANCE EXCHANGE, is a Pennsylvania corporation or other business entity by virtue of the laws of the Commonwealth of Pennsylvania with a principal place of business located at 4901 Louise Drive, Rossmoyne Business Center, Mechanicsburg, Cumberland County Pennsylvania 17055. 1 3. Defendant, ERIE INSURANCE GROUP, is a Pennsylvania corporation, association, and other business entity or entities by virtue of the laws of the Commonwealth of Pennsylvania with a principal place of business located at 4901 Louise Drive, Rossmoyne Business Center, Mechanicsburg, Cumberland County Pennsylvania 17055. 4. Defendant, ERIE INSURANCE PROPERTY & CASUALTY, is a Pennsylvania corporation or other business entity by virtue of the laws of the Commonwealth of Pennsylvania with a principal place of business located at 4901 Louise Drive, Rossmoyne Business Center, Mechanicsburg, Cumberland County Pennsylvania 17055. (Erie Insurance Company, Erie Insurance Group, and Erie Insurance Property & Casualty are collectively referred to as "Defendants"). 5. At all times relevant hereto, Defendants have been engaged in selling and providing property and casualty insurance to citizens and businesses of the Commonwealth of Pennsylvania. 6. On December 8, 2009, Hershey Real Estate Services assigned all of its rights, title, interest and claims to Plaintiff that it has or may have against Defendants including, but not limited to, claims for bad faith and for reimbursement of attorneys' fees and expenses incurred as a result of Defendants' failure to tender a defense. VENUE & JURISDICTION 7. Jurisdiction is proper in the Court of Common Pleas of Cumberland County, Commonwealth of Pennsylvania in that Defendants have a principal place of business in Cumberland County, and Defendants regularly conduct business in Cumberland County, Commonwealth of Pennsylvania. i FACTUAL AVERMENTS 8. At all times material to this Complaint, Defendants acted individually and by and through their duly authorized agents, servants, workmen, and/or employees, acting within the scope of their authority and/or employment. 9. On May 15, 2008, Kristi D. Hoffert filed a Complaint against Hershey Real Estate Services ("Hershey") and Benjamin C. Hostetter and Glyn Hostetter ("Hostetter") in the Court of Common Pleas of Lancaster County, Docket No. CI-08-05465, seeking compensation for personal injuries arising out of the alleged negligent maintenance of an apartment. ("Underlying Litigation"). 10. At all times relevant hereto, there existed a policy of insurance having policy number Q40 2980166 H ("Policy") between Hostetter and Defendants. A copy of the Policy is attached hereto and marked as Exhibit "A." 11. At all times relevant hereto, Hershey was an insured under the Policy issued to the Hostetters by Defendants because Hershey was the real estate manager for the Hostetters' property at issue in the Underlying Litigation. 12. The Policy issued by Defendants provided: Throughout your policy and its endorsement forms, the following words have special meaning in your policy when they appear in bold type. "Anyone we protect" and "Insured" when used in Section II means: 6. Your real estate manager; ... 13. The liability protection (section Il) of the Policy provides as follows: Payment for the following as an addition to the limits of protection shown on the Declarations. a. Claim expenses We will pay: 1. All expenses we incur and all costs taxed against anyone we protect in a suit we defend. 14. Because Hershey was an insured under the Policy, Defendants were obligated to defend Hershey against the claims brought against it in the Underlying Litigation. 15. On or about January 21, 2008, Plaintiff sent a letter to Defendants requesting that they tender a defense to Hershey in the Underlying Litigation because Hershey was an insured under the terms of the Policy. 16. On June 17, 2008, Defendants denied coverage and requested that Plaintiff indemnify and defend the Hostetters despite the clear and unambiguous language that Hershey was an insured under their Policy and that their Policy was to provide primary coverage. 17. Despite the Defendants' Policy being the primary insurance for Hershey in the Underlying Litigation, Defendants' denial of coverage for Hershey required Plaintiff to appoint counsel pursuant to the general liability policy, policy number BOP 0635571 06, issued by Plaintiff. 18. On February 5, 2009, Plaintiff, through its counsel, sent a letter to Defendants outlining Defendants' legal obligation to tender a defense to Hershey and once again requested that they tender a defense to Hershey. 19. On April 9, 2009, Defendants conceded that Hershey was an insured under their Policy, that their insurance coverage was primary, and that they had an obligation to defend and indemnify Hershey in the Underlying Litigation. 20. On May 18, 2009, Plaintiff, through counsel, requested payment of its attorneys' fees and expenses that it was forced to expend because of Defendants' wrongful denial of coverage to Hershey. 21. Plaintiff is entitled to reimbursement for attorney's fees expended in defending the action brought against Hershey as well as expenses incurred in the Underlying Litigation, which are a direct result of Defendants' failure to tender a timely defense in accordance with their Policy. COUNTI BREACH OF CONTRACT PLAINTIFF V. DEFENDANTS 22. The averments of paragraphs 1 through 21 of the Complaint are incorporated by reference as though set forth in full herein. 23. Defendants breached the Policy by failing to tender a defense to Hershey in a timely manner in the Underlying Litigation in accordance with the terms and conditions of the Policy. 24. As a direct result of Defendants' breach of their duty to defend Hershey, Plaintiff has suffered damages in the form of attorneys' fees and expenses in the amount of six thousand seven hundred ninety eight and 87/100 Dollars ($6,798.87). 25. Despite reasonable demand, Defendants refused and continue to refuse to reimburse Plaintiff for the attorneys' fees and expenses that Plaintiff was forced to expend because of Defendants' failure to tender a defense in a timely manner as required by their Policy. WHEREFORE, Plaintiff respectfully requests that this Honorable Court enter judgment in its favor and against Defendants in the amount of six thousand seven hundred ninety eight and 87/100 Dollars ($6,798.87), plus interest, costs and such other and further relief as the Court deems just and proper. COUNT II BAD FAITH PLAINTIFF V. DEFENDANTS 26. Paragraphs 1 through 25 are incorporated herein by reference as if set forth in full herein. 27. On or about February 7, 1990, the Governor of Pennsylvania signed into law 42 Pa.C.S.A. §8371, effective July 1, 1990, titled "Actions on Insurance Policies," which provides a private cause of action for bad faith against insurance companies as follows: In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith towards the insured, the court may take all of the following actions: (1) award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus three percent; (2) award punitive damages against the insured; (3) assess court costs and attorney fees against the insurer. 28. Plaintiff is an "insured" of Defendants, within the meaning of 42 Pa.C.S.A. §8371, which statute imposes a duty upon an insurance company to act in good faith in dealing with Plaintiff. 29. Defendants' duty to act in good faith included, without limitation, the obligation to act with reasonable promptness and to fully comply with 40 P. S. 1171 et seq. in the handling of the claims asserted against its insured, Hershey. 30. The actions of Defendants' were highly unreasonable, unlawful and in violation of the law; further, Defendants knew that their actions were unlawful and highly unreasonable. 31. Defendants acted highly unreasonably and in bad faith; such bad faith included but was not limited to failing to defend Hershey from the Underlying Litigation. 32. Defendants acted in bad faith as follows: a. failing to provide a defense in a timely manner; b. adopting a company practice of exposing insureds to damages by seeking to minimize their expenses in defending claims; C. failing to fairly and in good faith investigate the claim; d. failing and refusing to comply with the terms and conditions of the Policy issued under which Hershey was an insured and the reasonable expectations arising from the Policy; e. failing and refusing to comply with the statutes of the Commonwealth of Pennsylvania and the regulations of the Pennsylvania Insurance Department governing conduct of insurers; f violating its fiduciary, contractual and statutory duties in dealing with Plaintiff; g. failing to reimburse Plaintiff for its attorneys' fees incurred as a result of the denial of coverage by Defendants; h. acting in an unreasonable manner with knowledge that their actions were unreasonable; i. misrepresenting pertinent facts or policy or contract provisions relating to coverage; j. exploiting Plaintiff's vulnerable position; k. using oppressive demands on Plaintiff, 1. violating the Unfair Insurance Practices Act, 40 Pa. State. Ann. §§1171.1.15; M. attempting to settle the attorneys' fees and expenses for less than that actually incurred by Plaintiff; n. failing to affirm coverage of the claim within a reasonable time after proof of loss has been completed and communicated to Defendants; 33. Defendants' actions have been in reckless disregard of Plaintiff's rights, and have been willful, wanton and outrageous which is flagrantly in violation of public policy and statutory law. 34. The actions of Defendants constitute outrageous conduct committed with reckless indifference towards Plaintiff in this action. 35. Defendants' failing to defend Plaintiff in the Underlying Litigation has caused financial hardship to Plaintiff. 36. Defendants' bad faith warrants an award for interest equal to the prime rate plus three percent, punitive damages, court costs, attorney fees pursuant to 42 Pa.C.S.A. Section 8371. WHEREFORE, Plaintiff requests this Honorable Court enter judgment in its favor against Defendants in a sum in excess of $50,000 for any and all damages provided under 42 Pa.C.S.A. §8371, including without limitation, punitive damages, attorneys' fees, interest and costs of suit. COUNT III UNJUST ENRICHMENT PLAINTIFF V. DEFENDANTS 37. Paragraphs 1 through 36 are incorporated herein by reference as if set forth in their entirety. 38. Defendants would be unjustly enriched if they were not required to reimburse Plaintiff in the amount of six thousand seven hundred ninety eight and 87/100 Dollars ($6,798.87), which was a direct result of Defendants' denial of coverage and failure to tender a defense in the Underlying Litigation. 39. The payment of attorneys' fees and expenses made by Plaintiff enriched Defendants, as Defendants received an economic benefit because they were not required to spend its own monetary funds in defending the Underlying Litigation. 40. Said enrichment would be unjust if Defendants were not required to pay the attorneys' fees and expenses incurred by Plaintiff in the Underlying Litigation. WHEREFORE, Plaintiff respectfully requests that this Honorable Court enter judgment in its favor and against Defendants in the amount of six thousand seven hundred ninety eight and 87/100 Dollars ($6,798.87), plus interest, costs and such other and further relief as the Court deems just and proper. CIPRIANI & WERNER, P.C. By Date: )f ?I /to E. R9ph Godfrey, squire Attorney I.D. No. 1011 Mumma Road, Suite 201 Lemoyne, PA 17043 (717) 975-9600 Attorneys for Plaintiff " ?O 71.7-222-397/3 MILLERS CAPITAL INS PAGE 02103 "CATION am an authorized representative of PlairA0% and hereby certify that the facts set forth in the foregoing Complaint are true and correct to the best of my knowledge, infonnation, and belief. I hereby acknowledge that the facts set forth in the aforesaid Complaint are made subject to the penalties of l8 Pa. C.S.A. §4904 relating to unswom falsification to authorities. By: Its: Date: 31-S(116 . ? t ?, ttV ? j ?` ? '?? ?? r i.,;> S :k-^.` (? ? t l? ? _ ? ? ?.. rr?(ea ' r: ." fi ? . .?. ,?.:r.ti. WHERE TO LOOK IN YOUR POLICY PAGE Agreement ........................................................................3 Coverages Business Personal Property (Coverage B) ........................6 Dwelling(s) (Coverage A) .................................................6 Medical Payments (Coverage F) .................... ..................13 Personal Injury Liability (Coverage D) ........ ..................13 Property Damage Liability (Coverage E) ..... ..................13 Rental Income Protection (Coverage. C) ...... ....................7 Definitions ..................................................... ..............3,4,5 Description of Insured Property ................. ..Declarations Extensions of Coverage - Section I Debris Removal ............................................ ....................9 PAGE Limits of Protection Medical Payments ...........................................................15 Personal Injury Liability .................................................15 Property Damage Liability ..............................................15 Other Insurance Liability Protection .........................................................16 Property Protection .........................................................11 Our Promise Medical Payments ...........................................................13 Personal Injury Liability .................................................13 Property Damage Liability ..............................................13 Perils Insured Against - Section I Demolition Cost ................................................................ 10 Expenses For Loss Adjustment ...................................... 10 Exterior Signs, Lights and Clocks ................................... 10 Fences, Walks, Unattached Outbuildings, Tennis Courts and Inground Swimming Pools .............. ..9 Fire Department Service Charges ................................... 10 Fire Extinguisher Recharge ............................................. 10 Money and Securities ...................................................... 10 Newly Acquired Property ...............................................10 Pollutants Clean Up and Removal .................................10 Property in Danger .................................................... ......10 Trees, Shrubs, Lawns and Plants .............................. ........9 Valuable Papers and Records ................................... ......10 Limitations On Our Duty To Pay - Section I Deductibles ................................................................ ........9 Special Loss Payments - Coverage A ..................... ........9 Special Loss Payments - Coverage B ...................... ........9 What We Do Not Cover - Exclusions .................... .....8,9 Dwellings (Coverage A) .................................................7,8 Business Personal Property (Coverage B) .....................7,8 Rental Income Protection (Coverage C) .......................7,8 Rights and Duties General Policy Conditions - Section III Accounting (Exchange) ...................................................17 Agreement (Company). .................................................... 18 Automatic Renewal Policy .............................................16 Cancellation .....................................................................17 Concealment, Fraud or Misrepresentation .....................17 How Your Policy May Be Changed ..............................17 Inspection and Audit... .................................................... 17 No Contingent Liability (Exchange) ..............................17 Our Right to Recover From Others ...............................17 Policy Acceptance ...........................................................17 Priority .............................................................................17 Reciprocal Agreement (Exchange) ..................................18 Time of Inception ...........................................................17 1 4 PAGE Conditions - liability Protection - Section II Bankruptcy of Anyone We Protect ................................ 16 Lawsuits Against Us ........................................................ 16 Medical Payments - Coverage F ................................... 16 Other Insurance ............................................................... 16 Severability of Insurance ................................................. 16 What To Do When An Accident Happens .................... 16 Conditions - Property Protection - Section I Abandonment of Property ............................................. 1 l Appraisal .......................................................................... I I Divisible Contract ........................................................... I l Increase in Hazard ........................................................... 1l Loss Payment .................................................................. 11 Loss to a Pair or Set ....................................................... 11 Mortgagee ........................................................................ I l No Benefit To Bailee ...................................................... 11 PAGE Other Insurance Property of Others ...........................................................12 Protective Safeguards Warranty ......................... .............12 Records ............................................................... .............12 Recoveries ........................................................... .............12 Replacement Cost .............................................. .............12 Suit Against Us .................................................. .............12 Vacancy and Unoccupancy ................................ .............12 Your Duties After A Loss .................................. .............12 What We Also Pay Claim Expenses .................................................. .............13 First Aid Expenses ............................................. .............13 What We Do Not Cover - Exclusions Liability Protection - Section II ....................... ....13,14,15 Property Protection - Section I ........................ ............8,9 When and Where This Policy Applies ............. ...............5 2 ERIE INSURANCE GROUP is proud to present this new ULTRASURE PACKAGE POLICY FOR LANDLORDS. This important contract between you and The ERIE ® is written in plain, simple terms so that it can be easily under- stood. We urge you to read it. Your policy contains XTRA PROTECTION FEATURES developed by The ERIE®. Wherever an "X" appears in the margin of this policy, you receive XTRA PROTECTION, either as additional coverage or as a coverage that is not in most landlords policies. AGREEMENT We promise, upon payment of the premium and compli- necessitated by ordinances regulating constructi ance with the provisions of this policy and its endorse- repair. This amount will not exceed the cc ments, to: repair or replacement of your damaged property You may not transfer this policy without our A consent. This policy is made and accepted subject to thes the following provisions, including those which m_, _ added by endorsement. DEFINITIONS 1. cover you for the policy period shown on the Decla- rations. Coverage will begin at 12:01 a.m., Standard Time, at the location of the insured property and will end at the same time on the expiration date of the policy. 2. protect you up to the amounts specified in the policy. 3. pay you to the extent of the replacement cost of your property prior to loss, without any increased costs materials of like kind and quality within a reasc time after loss. any organization you acquire or form, other than a partnership or joint venture, and over which you maintain ownership or majority interest. This insur- ance does not apply to: a. the new organization if it is also an Insured under other similar insurance; X X Throughout your policy and its endorsement forms, the 9. following words have a special meaning in your policy when they appear in bold type. • "Aircraft" means any machine or device capable of atmospheric flight except model airplanes. • "Anyone we protect" and "Insured" when used in Section II means: b. 1. you; 2. your spouse with respect to the conduct of your business, if you are doing business as an individual; 3. all partners, members, and their spouses, if doing business as a partnership or joint venture, but only while acting within the scope of their duties; 4. executive officers, trustees or directors if doing busi- ness as a corporation, association or other entity, but only while acting within the scope of their duties. Stockholders are also Insureds, but only with respect to their liability as stockholders; 5. your employees while in the course of their employment. Employees are not Insureds for: a. personal injury to you or to a co-employee while in the course of their employment; or b. personal injury arising out of their rendering of or failure to render professional health care ser- vices; 6. your real estate manager; and 7. any person or organization having proper temporary custody of the insured property if you die, but only: a. with respect to liability arising out of the mainte- nance or use of the insured property; and b. until a legal representative has been appointed; 8. your legal representative if you die, but only while performing duties as your representative; the organization 90 days after the date the organ- ization is acquired or formed by you; and c. personal injury or property damage under Per- sonal Injury Liability (Coverage D) and Prop- erty Damage Liability (Coverage E) which occurred before you acquired or formed the organization, 10. any person operating upon a public highway, with your permission, mobile equipment that is registered in your name under a motor vehicle registration law. Anyone we protect includes any person or organiza- tion responsible for the operation of mobile equip- ment, but only if loss is not recoverable under any other kind of insurance. 3 Anyone we protect does not include any person or organization with respect to: a. personal injury to a co-employee of the person operating the mobile equipment; or b. property damage to property owned by, rented to, in the charge of or occupied by you or the employer of any person who is an Insured under this part (10). This insurance does not apply to any partnership or joint venture not shown on the Declarations. "Automobile" means a land motor vehicle, trailer or semi-trailer designed for travel on public roads (including any attached machinery or equipment), but does not include mobile equipment. • "Bodily injury" means physical harm, sickness or disease sustained by a person. Bodily injury also includes care and loss of services and death at any time resulting from bodily injury. • "Burglary" means the taking of business personal property (as described in Coverage B) from inside the premises by a person unlawfully entering or exiting the premises as evidenced by visible marks of forcible entry or exit. It includes loss to the building and its equipment resulting from burglary or attempted burglary. • "Business personal property" means personal prop- erty pertaining to the residence premises or used for the service of the residence premises. • "Declarations," "Amended Declarations," "Revised Declarations" and "Renewal Certificate" means the form which shows your coverages, limits of pro- tection, premium charges and other information. This form is part of your policy. • "Extra expense" means the necessary expenses incurred by you during the interruption of business that would not have been incurred if there had been no direct loss to covered property caused by an insured peril. • "Insured contract" means: 1. a lease of premises; 2. a sidetrack agreement; 3. an easement or license agreement in connection with vehicle or pedestrian private railroad crossings at grade; 4. any other easement agreement, except in connection with construction or demolition operations on or within 50 feet of a railroad; 5. an agreement to indemnify a municipality which is required by municipal ordinance. This does not apply to work performed for the municipality; 6. an elevator maintenance agreement; or 7. that part of any contract or agreement relating to the conduct of your business under which you assume the tort liability of another to pay damages because of personal injury or property damage to a third person or organization, if the contract or agreement is made prior to the personal injury or property damage. Tort liability means a liability that would be imposed by law in the absence of any contract or agreement. • "Insured premises" means 1. the residence premises; 2. any other one, two, three or four family dwelling you acquire ownership or control of during the policy period, if you notify us of your intention to insure it under this policy within 30 days of acquisition; 3. the ways immediately adjoining on land; 4. dwellings previously owned by you if possession has been given to others. • "Interruption of business" means the period of time that: 1. begins with the date of direct loss to covered prop- erty caused by an insured peril; and 2. ends on the date when the covered property should be repaired, rebuilt or replaced with reasonable speed and similar quality. • "Loss" means direct and accidental loss of or damage to insured property. • "Mobile equipment" means any of the following types of land vehicles (including any attached machinery or equipment): 1. bulldozers, farm machinery, forklifts and other vehi- cles designed for use principally off public roads; 2. vehicles maintained for use solely on or next to premises you own or rent; 3. vehicles that travel on crawler treads; 4. vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted: a. power cranes, shovels, loaders, diggers or drills; or b. road construction or resurfacing equipment such as graders, scrapers or rollers; 5, vehicles not described in 1., 2., 3. or 4. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equip- ment of the following types: a. air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well ser- vicing equipment; or b. cherry pickers and similar devices used to raise or lower workers; 6. vehicles not described in 1., 2., 3. or 4. above main- tained primarily for purposes other than the trans- portation of persons or cargo. However, self-propelled vehicles with the following types of permanently attached equipment are not mobile equipment but are considered automobiles: a. equipment designed primarily for: 1) snow removal, 2) road maintenance, but not construction or resurfacing; 3) street cleaning; b. cherry pickers and similar devices mounted on an automobile or truck chassis and used to raise or lower workers; and c. air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well ser- vicing equipment. • "Money" means: 1. currency, coins and bank notes in current use and having a face value; and 2. travelers checks, register checks, credit card slips and money orders held for sale. • "Occurrence" means an accident, including contin- uous or repeated exposure to the same general, harmful conditions. • "Personal injury" means injury arising out of 4 bodily injury; 2. libel, slander, defamation of character; 3. false arrest, wrongful detention or imprisonment, malicious prosecution, racial or religious discrimi- nation, wrongful entry or eviction, invasion of privacy, or humiliation caused by any of these. • "Pollutants" means any solid, liquid, gaseous or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals and waste. Waste includes materials to be recycled, reconditioned or reclaimed. . "Property damage" means: I. physical injury to or destruction of tangible property including loss of its use, or 2. loss of use of tangible property which is not phys- ically injured or destroyed. "Rental income" means: 1. the rents from the tenant occupancy of the property described on the Declarations; 2. all expenses for which the tenant is legally respon- sible and for which you would otherwise be respon- sible; 3. incidental income received from coin-operated laun- dries or other facilities on the residence premises. • "Residence premises" means the one, two, three or four family dwelling, including detached structures and land, which is described on the Declarations. • "Safe" means a steel receptacle which has a door(s) that is no less than 1/2" thick, walls or body that are no less than 1/4" thick and is equipped with at least one key or combination lock. • "Securities" means negotiable and non-negotiable instruments or contracts representing either money or other property and includes: 1. tokens, tickets, revenue and other stamps (whether represented by actual stamps or unused value in a meter) in current use; and 2. evidences of debt issued in connection with credit or charge cards not issued by you; but does not include money. • "Suit" means a civil proceeding in which damages are alleged because of personal injury or property damage to which this insurance applies. Suit includes an arbitration proceeding alleging such damages to which you must submit or submit with our consent. • "Vault" means a steel or concrete compartment which has a steel door(s) that is no less than 1 1/2" thick; walls that are no less than 1/4" thick, if steel, or 9" thick, if reinforced concrete; and the door is equipped with at least one combination lock. The word "walls" includes the roof and floor of the vault. ADDITIONAL ERIE INSURANCE EXCHANGE DEFINITIONS The following words have this special meaning in poli- cies issued by Erie Insurance Exchange when they appear in bold type. • "Anyone we protect" and "Insured" when used in Sections I and III means the Subscriber and any other person, firm or organization named on the Declarations under Named Insured. • "Subscriber" means the person who signed, or the partnership, firm or corporation that authorized the signing of, the application for this policy. • "We," "us" and "our" means the Subscribers at Erie Insurance Exchange as represented by their common Attomey-in-Fact, Erie Indemnity Company. • "You," "your" and "named Insured" means the Subscriber and others named on the Declarations under Named Insured. ADDITIONAL ERIE INSURANCE COMPANY DEFINITIONS The following words have this special meaning in poli- cies issued by the Erie Insurance Company when they appear in bold type. • "Anyone we protect" and "Insured" when used in Sections I and III means any person, firm or organ- ization named on the Declarations under Named Insured. • "We," "us" and "our" means Erie Insurance Company. • "You," "your" and "named Insured" means the persons named on the Declarations under Named Insured. WHEN AND WHERE THIS POLICY APPLIES WHEN WHERE This policy applies to losses that occur during the policy period. The policy period is shown on the Declarations, Renewal Certificate, Amended Declarations, Revised Declarations or endorsement. An Amended Declarations or endorsement tells you that the policy has been changed. A Renewal Certificate tells you that the policy is being renewed for another policy period. Dwelling Protection - Section I - This policy applies to loss of property at the location(s) specified on the Decla- rations, except as provided in Extensions of Coverage B.7. & B.10. Liability Protection - Section II - This policy applies within the United States of America, its territories or possessions, or Canada. 5 DWELLING PROTECTION - SECTION I DWELLING(S) - COVERAGE A meaning buildings erage A) before making payment. There will be no described on the Declarations used solely as private charge for this additional coverage. rental residences and anything permanently attached. It also includes: 1. unattached outbuildings described on the Declara- tions including garages, storage areas and tool sheds. Buildings used in connection with manufacturing, servicing or fanning operations are not included, 2. building equipment and fixtures servicing the building and other structures at the residence prem- ises, 3. personal property you have for the service and main- tenance of the buildings including, but not limited to, the following: a. fire extinguishing equipment, b. outdoor furniture, c. floor coverings, d. appliances used for refrigerating, ventilating, cooking, dishwashing or laundering, and e. flag poles and outdoor lights. 4. outdoor antennas, and 5. glass. The glass must be part of the building or in the building described on the Declarations. This coverage does not apply to: 1. fences and walks, except as provided in Extension of Coverage - A.1.; 2. outdoor swimming pools and equipment pertaining thereto, except as provided in Extension of Coverage - A.1.; 3. wharf property; 4. retaining walls, bridges, roadways, patios or other paved surfaces; 5. trees, shrubs, lawns and plants, except as provided in Extension of Coverage - A.2.; 6. exterior signs, lights and clocks, except as provided in Extension of Coverage - B.4.; 7. underground pipes, flues or drains; 8. land (including land on which covered property is located) or water; and 9. property specifically insured in whole or in part by this or any other insurance. Automatic Adjustment of Coverage Amounts This policy provides you with a guard against the effect of inflation on construction costs for Dwellings (Cov- erage A). We will keep track of costs and at the next policy period we will adjust the amount of your building coverage if necessary . Your premium will be adjusted at each policy period to reflect any change in the amount of insurance. During the policy period, if there is an increase in con- struction costs and a loss occurs, we will reflect the increase in the amount of insurance for Dwellings (Cov- If the amount of insurance shown on the Declarations for Dwellings (Coverage A) is inadequate, these adjust- ments may not be sufficient to provide full recovery should a loss occur. If you increase the value of a building by $5,000 or more, you must tell us in order for your limit for Dwellings (Coverage A) to remain ade- quate. BUSINESS PERSONAL PROPERTY - COVERAGE B covers business personal property only while on the residence premises or while it is temporarily removed for repairs. This coverage does not apply to: 1. vehicles which because of their use are required by law to be licensed for road or air use; watercraft and accessories while afloat; 2. motorcycles, recreational motor vehicles and trailers; 3. exterior signs, lights and clocks, except as provided in Extension of Coverage - BA.- 4. money and securities, except as provided in Exten- sion of Coverage - B.7.• 5. household and personal articles; 6. trees, shrubs, lawns and plants, except as provided in Extension of Coverage - A.2.; 7. growing crops while outside of buildings; 8. animals; 9. contraband, or property in the course of illegal trans- portation or trade; 10. extra expense incurred in the reproduction of your valuable papers and records, except as provided in Extension of Coverage - B.I I.; and 11. property specifically insured in whole or in part by this or any other insurance. RENTAL INCOME PROTECTION - COVERAGE C meaning loss of rental income resulting directly from interruption of business caused by damage to buildings or business personal property while on the residence prem- ises from an insured peril. We will pay the actual business loss sustained by you and the expenses necessarily incurred to resume normal business operations. The actual business loss we will pay shall not exceed the reduction in rents, less charges and expenses which do not necessarily continue during the period when your tenants cannot inhabit the premises. The loss of rental income will be based on the rental income before the date of a covered loss and the provable rental income had no loss occlHTed. We will pay up to $100 a day for seven days after your business is suspended to cover loss of rental income while you are determining your actual business loss. The amount paid will be subtracted from your actual loss of rental income. 6 We will pay the actual business loss for only such length of time as would be required to resume normal business operations. We will limit the time period to the shorter of the following periods: 1. the time period required to rebuild, repair or replace such part of the building or business personal prop- erty as has been damaged or destroyed as a direct result of an insured peril; or 2. twelve (12) consecutive months from the date of loss Payment of loss is not limited by the end of the policy period. Loss may include: 1. loss caused by temperature change as a result of damage to the premises by an insured peril (excluding vandalism and malicious mischief, riot and civil commotion); 2. loss for a maximum of two consecutive weeks when insured premises are closed by order of civil authority as a result of direct physical loss of or damage to property, other than at the insured premises, caused by an insured peril; and 3. extra expense. We will pay any extra expense to: a. avoid or minimize the interruption of business and to continue your business activities at the insured premises; b. minimize the interruption of business if you cannot continue your business activities; c. repair or replace any property or research, replace or restore the lost information on damaged valuable papers and records to the extent it reduces the amount of loss that other- wise would have been payable under loss of rental income. You are required to resume normal business oper- ations as promptly as possible and shall use all avail- able means to eliminate any unnecessary delay. PERILS INSURED AGAINST - SECTION I DWELLINGS - COVERAGE A BUSINESS PERSONAL PROPERTY - COVERAGE B RENTAL INCOME PROTECTION - COVERAGE C This policy insures against loss caused by the following perils: 1. Fire 2. Lightning 3. Windstorm or Hail, not including loss a, caused by frost, cold weather, ice, snow or sleet. b. to business personal property unless the exterior of the building first sustains damage to roof or walls by direct action of wind or hail. c. to antennas including their lead-in wiring, masts or towers. 4. Explosion, including loss from the explosion of gases or fuel within the combustion chamber, flues or pas- sages of any fired vessel. This peril does not include loss by explosion of steam boilers, steam pipes, steam engines or steam turbines if owned by you, leased by you or operated under your control. The following are not explosions: a. electric arcing; b. rupture or bursting 1) of moving parts or machinery caused by centrifugal force or mechanical breakdown, 2) of water pipes, 3) due to expansion or swelling of the contents of any building or structure, caused by or resulting from water, 4) or operation of pressure relief devices.. 5. Riot and Civil Commotion, including loss from pillage and looting. Under Rental Income Pro- tection (Coverage C), this peril does not include loss caused by temperature change as a result of damage to the premises by riot and civil commotion. 6. Vehicles and Aircraft, not including loss to your property while being transported. 7. Smoke, meaning sudden loss from smoke, other than smoke from agricultural smudging or industrial oper- ations. 8. Falling Objects, not including loss to a. business personal property in the open; or b. business personal property unless the exterior of the building first sustains damage to roof or walls by falling objects. 9. Weight of Snow, Ice or Sleet, not including loss to business personal property in the open. 10. Vandalism or Malicious Mischief, meaning loss resulting from willful and malicious damage to or destruction of your building(s) and/or business per- sonal property. We will not cover loss: a. caused by pilferage, theft, burglary or larceny. We will pay for loss to the building and its equipment resulting from burglary or attempted burglary, subject to part (b) below. b. to glass constituting a part of a building, including its lettering and ornamentation, except glass building blocks. 11. Sonic Boom 12. Sprinkler Leakage, meaning loss caused by leakage or discharge of water or other substances from within an automatic sprinkler system, including loss caused by collapse of a tank forming a part of an automatic sprinkler system. This peril also includes the cost to repair or replace the automatic sprinkler system when the damage sustained is caused directly by breakage of any of the parts of the sprinkler system resulting in sprinkler leakage or freezing. We will also pay the cost to tear out and replace any part of the building(s) described on the Declarations to repair damage to the automatic sprinkler system that has resulted in sprinkler leakage. This peril does not include loss caused by leakage or discharge from an automatic extinguishing system which protects cooking equipment. There is no coverage while the building at which the loss occurs is vacant for more than 60 consecutive 7 Ays unless you have exercised reasonable care to yttttect the system against freezing. 13. lkeezing by Temperature Reduction of Plumbing !eating or Air Conditioning Systems or Wate Bamage, including loss from the accidental discharge ar leakage of water or steam as the direct result of toe breaking or cracking of any part of a system or i}pliance containing water or steam, except an auto- matic sprinkler system. We will also pay the cost to ear out and replace any part of the building(s) Jescribed on the Declarations to repair damage to & system or appliance from which the water or .Bream escapes. We will not pay for: a. the cost to repair or replace the system or appli- ance from which the water or steam escapes; or b. loss caused by freezing while the described building is vacant for more than 60 consecutive days unless you have exercised reasonable care to: 1) maintain heat in the building; or 2) shut off the water supply and drain the system or appliance of water. 14. Burglary, not including loss to property damaged or taken by burglars if the building has been vacant or unoccupied for more than 30 consecutive days immediately prior to the loss. A building under con- struction is not considered vacant or unoccupied. 15. Volcanic Action, meaning direct loss resulting from the eruption of a volcano caused by: a. airborne volcanic blast or airborne shock waves, b. ash, dust or particulate matter, or c. lava flow. All volcanic eruptions that occur within any 168-hour period will constitute a single occurrence. "fhis does not include the cost to remove ash, dust or particulate matter that does not cause direct loss to the covered property. 16. Sinkhole Collapse, meaning loss caused by the sudden sinking or collapse of land into underground empty spaces created by the action of water on limestone or dolomite. This peril does not include: a. the cost of filling sinkholes; or b. sinking or collapse of land into man-made underground cavities. LIWATIONS ON OUR DUTY TO PAY - SECTION I WhX We Do Not Cover - Exclusions A. Coverages A, B, and C Wit do not cover under Dwellings (Coverage A), Busi- nes Personal Property (Coverage B) and Rental Income Pruection (Coverage C) loss caused directly or indirectly regrdless of any cause or event contributing concur- rent?y or in any sequence to the loss: 1, a. by earth movement (other than sinkhole col- lapse), including but not limited to earthquake, 8 mine subsidence, landslide, mud flow, earth sinking, earth rising or shifting, or earth mover caused by volcanic eruption, explosion r r effusion; b. by flood, surface water, waves, tidal water or tidal wave, overflow of streams or other bodies of water, or spray from any of these, all whether driven by wind or not, c. by water or sewage which backs up through sewers or drains, or d. by water below the surface of the ground including that which exerts pressure on or flows, seeps or leaks through sidewalks, driveways, foundations, walls, basement or other floors, or through doors, windows or any other openings in such sidewalks, driveways, foundations, walls, basement or floors; unless fire, explosion, sprinkler leakage, volcanic action, or building glass breakage caused by volcanic eruption, explosion or effusion ensues, and then only for ensuing loss. This exclusion does not apply to property being transported. 2. by war, whether declared or undeclared, discharge of a nuclear weapon (even if accidental), hostile or warlike action in time of peace or war, insurrection, rebellion, revolution, civil war, usurped power, including action taken by governmental authority in defending against such an occurrence. 3. by seizure or destruction of covered property by order of governmental authority, except as provided in Rental Income Protection (Coverage C). We will also cover loss caused by acts of destruction ordered by governmental authority to prevent the spread of a fire. 4. by nuclear reaction or radiation, or radioactive con- tamination unless fire ensues, and then only for ensuing loss. 5. by deterioration or depreciation. 6. by the enforcement of any law or ordinance regu- lating the construction, use or repair of any property or requiring the tearing down of any property., including the cost of removing its debris. 7. by the failure of power or other utility service sup- plied to the insured premises, however caused, if the failure occurs away from the insured premises, unless a covered loss ensues, and then only for ensuing loss. 8. by collapse. We will cover loss from collapse caused by fire; lightning; windstorm; hail; explosion; smoke; aircraft; vehicles; riot; civil commotion; vandalism or malicious mischief, sonic boom; breakage of building glass; falling objects; weight of snow, ice or sleet; water damage; hidden decay; hidden insect or vermin damage; sprinkler leakage; sinkhole collapse; volcanic action; weight of people or personal property; weight of rain that collects on a roof, or use of defective material or methods in construction, remodeling or renovation if the collapse occurs during the course of the construction, remodeling or renovation. We will not cover settling, cracking, shrinking, bulging or expansion. B. Coverage C We do not cover under Rental Income Protection (Cov- erage C): 1. increase of loss resulting from ordinance or law regu- lating construction or repair of buildings. 2. consequential damages resulting from the breach of contractual obligations. 3. increase of loss as a result of labor disturbances. 4. loss due to delay or loss of market. 5. increase of loss caused by or resulting from the sus- pension, lapse or cancellation of any license, lease or contract. We will pay for loss of income during the interruption of business if the suspension, lapse or cancellation is caused by the suspension of your business. 6. extra expense caused by the suspension, lapse or cancellation of any license, lease or contract beyond the interruption of business. 7. increase of loss resulting from ordinance or law regu- lating the prevention, control, repair, clean-up or res- toration of environmental damage. 8. income protection specifically insured in whole or in part by this or any other insurance. DEDUCTIBLES Dwellings (Coverage A), Business Personal Property (Coverage B) and Extensions of Coverage - Section I. We will pay the amount of loss to property in any one occurrence which is in excess of the deductible amount shown on the Declarations, unless otherwise stated in the Extensions of Coverage. Rental Income Protection (Coverage C) - No deduct- ible applies. . SPECIAL LOSS PAYMENTS - COVERAGE A The following property is subject to special treatment when damaged by an insured peril: 1. Our payment for loss to glass will also include: a. replacement of building glass with safety glazing materials when made necessary by an ordinance or building code, b. replacement of lettering, ornamentation or burglar alarm foil, c. repair or replacement of frames, d. installation of temporary coverings, and e. removal of obstructions. 2. Improvements and betterments made by Others. a. If you pay for repair or replacement, we will pay you the expenses involved not exceeding the replacement cost of damaged property. b. If repaired or replaced at the expense of others, there is no loss payable to you. SPECIAL LOSS PAYMENTS - COVERAGE B The following property is subject to special treatment when damaged by an insured peril: Accounting Books, Records, Tapes and Recording Media. We will pay you the cost of blank items (books, film, tape or other recording media). Extensions of Cov- erage - B.11. - Valuable Papers and Records provides for reproduction of these items. EXTENSIONS OF COVERAGE - SECTION I A. We will pay the following losses at your option. Pay- ments under these Extensions are not an additional amount of insurance and will not increase the total amount of insurance available for the coverage involved. 1. Fences, Walks, Unattached Outbuildings, Tennis Courts and Inground Swimming Pools - Coverage A. We will cover loss to fences, walks, unattached outbuildings, tennis courts and inground swimming pools caused by fire; lightning; explosion; riot or civil commotion; aircraft; smoke; falling objects; windstorm; vandalism or malicious mischief; sonic boom; sinkhole collapse; volcanic action; or collapse caused by any of the perils specified in this para- graph-Unattached outbuildings include garages, storage areas and tool sheds, but do not include those buildings used for dwelling purposes or in con- nection with manufacturing, servicing or farming operations. We will pay up to 10% of the Dwellings (Coverage A) limit but not to exceed $15,000 for any one loss. Our payment will be on an actual cash value basis. If specific insurance is carried on any item covered by this extension, then this extension does not apply to that item. 2. Trees, Shrubs, Lawns and Plants - Coverages A and B. We will cover loss to trees, shrubs, lawns and plants caused by fire; lightning; explosion; riot or civil commotion; aircraft; smoke; falling objects; sonic boom; sinkhole collapse; volcanic action; or collapse caused by any of the perils specified in this paragraph. If trees, shrubs and plants are inside buildings, we will also cover loss caused by windstorm; hail; weight of snow, ice or sleet; vandalism or malicious mis- chief; or temperature change. There must first be damage from an insured peril to the residence prem- ises. We will not be liable for more than $500 on any one tree, shrub or plant, including expenses for removing debris, or $2,000 for any one loss. We will not be liable for more than $2,000 for any one loss to lawns. B. Payments under these Extensions of Coverage are AN ADDITIONAL AMOUNT of insurance and will increase the total amount of insurance available for the coverage involved. 1. Debris Removal. We cover the cost of removal of debris resulting from a covered loss. This does not apply to any increase of loss resulting from ordi- nances or laws regulating construction or repair of buildings. We will pay up to 5% of the total limits for Coverages A and B plus $5,000 for debris removal expense. 9 X X This extension does not cover the cost to extract pollutants from land or water, or to remove, restore or replace polluted land or water. X 2. Demolition Cost. This policy covers the cost, not to exceed $10,000, of demolishing and removing any undamaged portion of the building after a covered loss. The demolition must be required by building code. The deductible does not apply to this extension. X 3. Expenses for Loss Adjustment. We will pay up to $1,000 for expenses involved in the preparation of loss data, inventories and appraisals. This does not include expenses incurred in using a public adjuster. The deductible does not apply to this extension. X 4. Exterior Signs, Lights and Clocks. We will pay up to $5,000 for loss to exterior signs, lights and clocks which you own. All exterior signs, lights and clocks must be on the residence premises. We will not pay for loss caused by: a. faulty manufacture or installation; b. extremes of temperature; c. mechanical breakdown; X X d. damage to electrical apparatus caused by elec- tricity other than lightning except for ensuing fire damage; or e. breakage during installation, repairing or disman- tling or breakage during transportation unless caused by fire, lightning, collision, derailment or overturn of vehicle. 5. Fire Department Service Charges. We will pay charges made by a fire department for services ren- dered as a result of an insured loss. The deductible does not apply to this extension. 6. Fire Extinguisher Recharge. We will pay expenses incurred to recharge portable fire extinguishers after they are used to fight a fire. The deductible does not apply to this extension 7. Money and Securities. We will pay for loss caused by an insured peril to money or securities up to $1,000 for any one loss while in or on the residence premises or within a bank or savings institution. We will pay for money and securities while being conveyed by anyone we protect or by an authorized employee, up to $1,000 for any one loss. We will pay for money and securities destruction up to $1,000 for any one loss. Money and securities destruction means loss by destruction of money and securities within the residence premises or while con- tained within a locked vault or safe. This does not include loss caused by unexplained or mysterious dis- appearance or abstraction. 8. Newly Acquired or Constructed Property. a. You may apply up to 25% of the limit for Cov- erage A or $250,000, whichever is less, on: 1) newly acquired buildings at other than the location(s) described on the Declarations; 2) new additions, new buildings and new struc- tures when constructed on the residence premises, including materials, equipment and supplies on or within 100 feet of the resi- dence premises; provided there is no other insurance applicable. b. You may apply up to 10% of the limit for Cov- erage B or $100,000, whichever is less, on newly acquired business personal property at other than the location(s) described on the Declarations, provided there is no other insurance applicable. c. You may apply up to one month's actual busi- ness loss or $100,000, whichever is less, for loss of income on: 1) newly acquired buildings and business per- sonal property at other than the location(s) described on the Declarations; or 2) new additions, new buildings and new struc- tures when constructed on the described premises, including materials, equipment and supplies on or within 100 feet of the described premises, if loss to the new addi- tions, new buildings and new structures delays the start of your business. The inter- ruption of business will start on the day your business would have started if the loss had not occurred;' provided there is no other insurance applicable. This extension shall apply for 90 days after the acquisition or start of construction, provided the policy remains in force or is renewed. You shall report values involved and pay any addi- tional premium. This extension does not apply to property while in transit. 9. Pollutants Clean Up and Removal. We will cover the cost to extract pollutants from land or water on the insured premises if the release, discharge or dis- persal of pollutants is caused by an insured peril during the policy period. We will pay up to $10,000 for all losses throughout the year. The cost must be reported to us within 180 days after the loss or the end of the policy period, which- ever is the earlier date. 10. Property in Danger. This policy covers any loss to X insured property removed from the insured premises or at a temporary location for up to 30 days because of danger of damage by an insured peril or to repair damage to the insured property. 11. Valuable Papers and Records. Business Personal X Property (Coverage B) is extended to cover the extra expense incurred in the reproduction of your valu- able papers and records when destroyed by an insured peril at the residence premises. This extension includes, but is not limited to, film, tape, disc, drum, cell and other magnetic recording or electronic data processing media. This extension is limited to $5,000 for any one loss. The deductible does not apply to this extension 10 CONDITIONS - SECTION I 1. ABANDONMENT OF PROPERTY We need not accept any property abandoned by you. _. APPRAISAL If you and we fail to agree on the amotutt of loss, either party may make written demand for an appraisal. Each party will select an appraiser and notify the other of the appraiser's identity within 20 days after the demand is received. The appraisers will select a competent and impartial umpire. If the appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the policy is issued to select an umpire. The appraisers shall then set the amount of loss. If the appraisers submit a written report of an agree- ment to us, the amount agreed upon shall be the amount of loss. If they cannot agree, they will submit their differences to the umpire. A written award by two will determine the amount of loss. Each party will pay the appraiser it chooses, and equally bear expenses of the appraisal. However, if the written demand for appraisal is made by us, we will pay for the reasonable cost of your appraiser and your share of the cost of the umpire. We will not be held to have waived any rights by any act relating to appraisal. 3. DIVISIBLE CONTRACT The breach of a policy condition or warranty in one building or location will have no effect on the cov- erage on another where no breach exists. 4. INCREASE IN HAZARD Unless we agree beforehand, coverage is suspended if the hazard is substantially increased by any means within the control or knowledge of anyone we protect. LOSS PAYMENT We will adjust all losses with you. We will pay you unless some other person is named in the policy or is legally entitled to receive payment. We will not pay you more than your financial interest in the covered property. Loss will be payable 30 days after we receive your proof of loss and one of the following has been done: 6. LOSS TO A PAIR OR SET If there is loss to a pair or set, we may: a. repair or replace any part of the pair or set to restore it to its value prior to the loss; or b. pay the difference between the actual cash value of the property before and after the loss. -MORTGAGEE Loss shall be payable to mortgagees named on the Declarations, to the extent of their interest and in the order of precedence. Our Duties We will: a. protect the mortgagee's interest in an insured building. This protection will not be invalidated by any act or neglect of anyone we protect, any breach of warranty, increase in hazard, change of ownership, or foreclosure if the mortgagee has no knowledge of these conditions. b. give the mortgagee 30 days notice before cancel- lation or refusal to renew this policy. Mortgagee's Duties The mortgagee will: a. furnish proof of loss within 60 days if you fail to do so. b. pay upon demand any premium due if you fail to do so. c. notify us of any change in ownership or occu- pancy, or any increase in hazard of which the mortgagee has knowledge. d. give us his or her right of recovery against any party liable for loss. This shall not impair the right of the mortgagee to recover the full amount of the mortgage debt. e. after a loss, permit us to satisfy the mortgage requirements, and receive full transfer of the mortgage and all securities held as collateral to the mortgage debt. Policy conditions relating to APPRAISAL, LOSS PAYMENT and SUIT AGAINST US apply to the mortgagee. This mortgagee interest provision shall apply to any trustee or loss payee named on the Declarations. NO BENEFIT TO BAILEE No bailee shall benefit, directly or indirectly, from this insurance. a. we have reached an agreement with you; or 8 b. there is an entry of final judgment; or c. there is a filing of an appraisal award on your behalf. We have the option to: a. pay the value of the damaged property; b. pay the cost to repair or replace the damaged property; c. take all or part of the damaged property at an agreed or appraised value; or d. repair or replace the damaged property with material of like kind and quality. 9. OTHER INSURANCE Other insurance is not permitted. This policy is excess to any other insurance. Virginia Only: Other insurance may be prohibited or the amount of insurance may be limited by an endorsement attached to your policy. If both this insurance and other insurance apply to a loss, we will pay our share. Our share will be the proportionate amount that this insurance bears to the total amount of all applicable insurance. 11 X 7) the inventory of damaged property as pre- pared in (c) above; h. in addition to the other conditions under Rental Income Protection (Coverage C), make the nec- essary replacements or repairs and resume op ations as soon as possible; i. agree to help us enforce any right of recovf against any party liable for loss under this polio This will not apply if you have waived recove rights in writing prior to a loss. LIABILITY PROTECTION - SECTION If Your policy provides liability protection for the insured limit of protection, we will not pay any prejudgment premises and operations necessary and related to these interest for the period of time after the offer. premises. 4. all reasonable expenses incurred by anyone we OUR PROMISE PERSONAL INJURY LIABILITY - COVERAGE D PROPERTY DAMAGE LIABILITY - COVERAGE E We will pay for damages because of personal injury or property damage for which the law holds anyone we protect responsible and which are covered by your policy. We cover only personal injury and property damage which occurs during the policy period. The per- sonal injury or property damage must be caused by an occurrence which takes place in the covered territory. We will pay any additional sums or perform any addi- tional acts or services that are explicitly covered under WHAT WE ALSO PAY, and nothing else. MEDICAL PAYMENTS - COVERAGE F We will pay all reasonable medical expenses to any person injured by an occurrence. We cover only medical expenses resulting from an occurrence which takes place during the policy period and in the covered territory. The services must be rendered within three years of the occurrence. The occurrence must arise from a condition in the premises or operations shown on the Declarations. The three year limitation does not apply to funeral expenses. Medical expenses include: 1. medical, surgical, x-ray and dental services, including prosthetic devices, and 2. ambulance, hospital, professional nursing and funeral services. WHAT WE ALSO PAY Payment for the following is in addition to the limits of protection shown on the Declarations. A. Claim Expenses We will pay 1. all expenses we incur and all costs taxed against anyone we protect in a suit we defend. 2. all interest on the full amount of any judgment on a suit we defend, until we offer or deposit in court the amount for which we are liable. 3_ prejudgment interest awarded on the amount of the judgment we pay. If we offer to pay the applicable protect at our request to assist us in the investigation or defense of any claim or suit. This includes actual loss of earnings up to $150 per day because of time X off from work. 5. premiums on appeal bonds in a suit we defend, and on attachment bonds to release property of anyone we protect, but not for bond amounts greater than the limit of protection for the coverage that applies. We will also pay up to $500 for each bail bond X required of anyone we protect because of an accident or traffic violation arising out of the use of a vehicle covered by this policy. We have no obligation to apply for or furnish such bonds. 6. all reasonable lawyers' fees up to $50 that anyone we X protect incurs because of arrest, resulting from an accident involving a vehicle covered by this policy. B. First Aid Expenses We will pay reasonable expenses for first aid to other people and animals at the time of an accident involving X anyone we protect. WHAT WE DO NOT COVER - EXCLUSIONS A. Coverages D, E and F We do not cover under Personal Injury Liability (Cov- erage D), Property Damage Liability (Coverage E) and Medical Payments (Coverage F): 1. injury or damage expected or intended from the standpoint of anyone we protect. This does not apply to personal injury or property damage resulting from your protecting persons or property. 2. the ownership, maintenance, use or entrustment to others of an automobile, aircraft or watercraft owned or operated by or rented or loaned to anyone we protect. Use includes operation and loading or unloading. "Loading or unloading of an automobile, aircraft or watercraft" means the handling of prop- erty: a. after it is moved from the place where it is accepted for movement into or on an automo- bile, aircraft or watercraft; b. while it is in or on an automobile, aircraft or watercraft; or c. while it is being moved from an automobile, air- craft or watercraft to the place where it is finally delivered. Loading or unloading of an automobile, aircraft or watercraft does not include the movement of prop- 13 X X erty by means of a mechanical device (other than a hand truck) not attached to the automobile, aircraft or watercraft. This exclusion does not apply to: a. parking an automobile on premises owned or rented by you, or while parking the automobile on the ways and means adjoining your premises, if the automobile is not owned by or rented or loaned to anyone we protect; b. liability assumed under an insured contract for the ownership, maintenance or use of aircraft or watercraft; c. liability arising out of the operations of equip- ment listed under parts (6)(b) and (c) of the defi- nition of "mobile equipment"; d. watercraft while ashore on premises you own or rent; or e. the use of non-owned watercraft 32 feet or under in length that are not being used to carry persons or property for a charge. 3. the use of mobile equipment while used in or pre- paring for a prearranged racing, speed or demolition contest or stunting activity. 4. the transportation of mobile equipment by an auto- mobile owned, rented, borrowed or operated by anyone we protect. 5. damages for which anyone we protect may be liable by reason of: a. causing or contributing to the intoxication of any person; b. the furnishing of alcoholic beverages to a person under the legal drinking age or under the influ- ence of alcohol; or c. any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages. This exclusion 5. does not apply to liability of anyone we protect or the indemnitee of anyone we protect arising out of the giving or serving of alco- holic beverages at functions incidental to your busi- ness, provided you are not engaged in the business of manufacturing, distributing, selling or serving of alcoholic beverages. 6. damages resulting from war, whether declared or undeclared, discharge of a nuclear weapon (even if accidental), hostile or warlike action in time of peace or war, insurrection, rebellion, revolution, civil war, usurped power, including action taken by govern- mental authority in defending against such an occur- rence. 7. damages due to a. the rendering of or failure to render: 1) diagnostic, medical, surgical, dental, x-ray or nursing service or treatment, or the fur- nishing of food or beverages with them, or 2) ambulance, paramedical, rescue squad or other service or treatment conducive to health; b. the furnishing or dispensing of drugs or medical, dental or surgical supplies or appliances; c. the handling of or performing of autopsies; d. the rendering of or failure to render cosmetic, ear piercing, tonsorial, massage, physiotherapy, chiropody, hearing aid, optical or optometrical services or treatments; or e. any service of a professional nature, including but not limited to: 1) the preparation or approval of maps, plans, opinions, reports, surveys, designs, or specifi- cations, and 2) supervisory, inspection or engineering ser- vices. B. We do not cover under Personal Injury Liability (Coverage D) and Property Damage Liability (Coverage E): 1. liability assumed by anyone we protect in a contract or agreement. This exclusion does not apply to liability: a. assumed in a contract or agreement that is an insured contract; or b. that anyone we protect would have in the absence of the contract or agreement. 2. a. damages arising out of the actual, alleged or threatened discharge, dispersal, release or escape of pollutants: 1) at or from premises you own, rent or occupy; 2) at or from any site or location used by or for you or others for the handling, storage, dis- posal, processing or treatment of waste; 3) which are at any time transported, handled, stored, treated, disposed of, or processed as waste by or for you or any person or organ- ization for whom you may be legally respon- sible; or 4) at or from any site or location on which you or any contractors or subcontractors working directly or indirectly on your behalf are performing operations: a) if the pollutants are brought on or to the site or location in connection with such operations, or b) if the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize the pollutants. b. any loss, cost or expense arising out of any gov- ernmental direction or request that you test for, monitor, clean up, remove, contain, treat, detoxify or neutralize pollutants. Subparagraphs 1) and 4) a) of paragraph 2.a. of this exclusion do not apply to personal injury or property damage caused by heat, smoke or fumes from a hostile fire. As used in this exclusion, a hostile fire means one which becomes uncontrollable or breaks out from where it was intended to be. 3. any obligation of anyone we protect under any workers compensation, unemployment compen- sation, disability benefits law or any similar law. 14 4 a. bodily injury to employees of anyone we protect arising out of their employment by anyone we protect for which anyone we protect may be held liable as an employer or in any other capacity; b. any obligation of anyone we protect to indemnify or contribute with another because of damages arising out of the bodily injury; c. bodily injury sustained by the spouse, child, parent, brother or sister of an employee of anyone we protect as a consequence of bodily injury to the employee arising out of employ- ment by anyone we protect. This exclusion applies to all claims and suits by any person or organization for damages because of such bodily injury, including damages for care and loss of services. This exclusion does not apply to liability assumed by anyone we protect under an insured contract. under parts 2. and 3. of the personal injury defi- nition: a. contractual liability, except liability for damages that anyone we protect would have in the absence of the contract or agreement; b. willful violation of a law or ordinance; c. injury arising out of advertising, publishing, broadcasting or television activities. 6. suits for libel, slander or defamation of character made against anyone we protect if the publication or statement: a. took place before the effective date of this insur- ance; or b. was knowingly untrue. 7. property damage to property anyone we protect owns, rents or occupies. 8. personal injury or property damage arising out of operations on or from uninsured premises which you own, rent or control, or liability which you assume under any contract or agreement relating to the uninsured premises. 9. property damage to property used by anyone we protect. This exclusion does not apply to liability assumed under a written sidetrack agreement. 10. property damage to property in the care, custody or control of anyone we protect or over which anyone we protect is exercising physical control. This exclu- sion does not apply to liability assumed under a written sidetrack agreement. ll. property damage to premises you previously owned or occupied. C. We do not cover under Medical Payments (Coverage F) expenses for bodily injury to: 1. anyone we protect. 2. any person a. injured on that part of premises you own or rent and that the person normally occupies; b. hired to do work for or on behalf of anyone we protect or a tenant of anyone we protect; c. if benefits are payable under any workers com- pensation, unemployment compensation, disa- bility benefits law or similar law; or d. injured while taking part in athletics. LIMITS OF PROTECTION - SECTION Il Our duty to pay the sums recoverable under this policy for which the law holds anyone we protect responsible is subject to the limits shown on the Declarations. For the purpose of determining our limit of liability, all personal injury and property damage arising out of continuous or repeated exposure to the same general conditions shall be considered one occurrence. Our limit of liability is not increased regardless of the number of people we protect, claims made or persons injured as a result of an occurrence. Personal Injury Liability - Coverage D Property Damage Liability - Coverage E Medical Payments - Coverage F The amount shown on the Declarations for "EACH OCCURRENCE" is the total limit of protection for all damages because of personal injury, property damage, or medical expense to one or more persons or organizations as a result of any one occurrence. The amount shown on the Declarations for "POLICY AGGREGATE" is the total limit of protection for all damages because of all: 1. property damage, 2. medical expense, or 3. personal injury under parts 2. and 3. of the personal injury definition, as a result of one or more occurrences. Medical Payments - Coverage F The amount shown on the Declarations for `'EACH PERSON" is the total limit of protection for all medical expenses to any one person as a result of any one occur- rence. The Limits of Protection for this policy apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the inception date of the policy period shown on the Declarations. If the policy period is extended after the policy is issued for an additional period of less than 12 months, then the additional period will be deemed part of the last pre- ceding period for purposes of determining the Limits of Protection. 15 r CONDITIONS - SECTION II 1. BANKRUPTCY OF ANYONE WE PROTECT Bankruptcy or insolvency of anyone we protect or anyone we protect's estate will not relieve us of any of our obligations. ?. LAWSUITS AGAINST US No person or organization has a right under this policy: a. to join us as a party or otherwise bring us into a suit asking for damages from anyone we protect; or b. to sue us unless all the terms of this policy have been fully complied with. A person or organization may sue us to recover on an agreed settlement or on a final judgment against anyone we protect obtained after an actual trial; but we will not be liable for damages that are not payable under the terms of this policy or that are in excess of the applicable limit of protection. An agreed settlement means a settlement and release of liability signed by us, anyone we protect and the claimant or the claimant's legal representative. Virginia Only: Any person, organization or legal representative thereof who has secured a judgment against anyone we protect is then entitled to bring action against us to recover damages up to the amount of insurance available under this policy. MEDICAL PAYMENTS - COVERAGE F The injured person will submit to examinations by doctors selected by us, as often as reasonably required. We will pay either the injured person or the provider of the services. Payment is not an admission of liability. 4. OTHER INSURANCE We will pay those sums not covered by other valid and collectible insurance, up to the applicable limits of this policy. When this insurance and other valid and collectible insurance apply to the loss on the same basis, our obligations are as follows: a. if the other insurance provides for contribution by equal shares, we will pay our equal share of the loss. Each insurer will pay equally with the others up to its limit of protection. b. if the other insurance does not provide for con- tribution by equal shares, we will pay the pro- portion of the loss that the applicable limit of protection of this policy bears to the total limit of protection of all applicable insurance. 5. SEVERABILITY OF INSURANCE This insurance applies separately to anyone we protect. This condition shall not increase our limit of liability for any one occurrence. 6. WHAT TO DO WHEN AN ACCIDENT HAPPENS When there is an accident or occurrence, anyone we protect will: a. notify us or our Agent in writing as soon as pos- sible, stating 1) your name and policy number; 2) the time, place and circumstances of the accident or occurrence; 3) names and addresses of injured persons and witnesses. b. send us any papers that relate to the accident or occurrence. c. at our request: 1) assist in making settlement, 2) help us enforce any right of recovery against any party liable to anyone we protect; 3) assist in the conduct of lawsuits; 4) attend hearings and trials; 5) secure and give evidence and obtain the attendance of witnesses; 6) submit to statements under oath; 7) authorize us to obtain records and other information. Anyone we protect will not make payments, assume obligations or incur expenses, other than for first aid, except at their own cost. RIGHTS AND DUTIES GENERAL POLICY CONDITIONS SECTION III We, you and anyone else protected by this policy must do certain things in order for the terns of the policy to apply. 1. AUTOMATIC RENEWAL POLICY Your policy will be automatically renewed at the end of the policy period, unless terminated by you or us in accordance with the steps explained in the Cancel- lation Condition. Each year, we will send you a Renewal Certificate which shows the premium due for the next policy period. This is a service that we provide for you so that your insurance protection does not stop. If you do not want the renewal policy, you must mail our Agent or us written notice in advance of the new policy period. If you do not notify us, your 16 policy remains in effect. You must pay us the earned premium due us for this time. 2. CANCELLATION Your Right to Cancel or Refuse Renewal The first named Insured shown on the Declarations may cancel this policy or any coverage by mailing our Agent or us written notice stating at what future date you want the cancellation to take effect. Our Right to Cancel or Refuse to Renew We may cancel or refuse to renew by mailing the first named Insured written notice stating the effective date of the cancellation. Notice will be sent to your last known address. Cancellations and nonrenewals will comply with the laws of the state in which your business is located. The cancellation will not take effect until at least 30 days (Maryland and Virginia-45 days, except for nonpayment of premium-30 days) after we send it. For states that require a different number of days for notification of cancellation or nonrenewal, an Amendatory Endorsement is attached. Method of Giving Notice Mailing notice will be sufficient proof of notice. Delivery of the notice by you or us will be equivalent to mailing. Return of Premium X If your policy is canceled, we will return the pro rata unused share of your premium. The cancellation will be effective even if we have not given or offered the return premium. CONCEALMENT, FRAUD OR MISREPRESEN- TATION This entire policy is void if before or after a loss anyone we protect has intentionally concealed or misrepresented any material fact or circumstance relating to this insurance. In the event of a fraudulent claim, we will not make payment for the loss. 4. HOW YOUR POLICY MAY BE CHANGED The terms of the policy which are in conflict with the laws of the state in which it is issued are auto- matically changed to agree with the laws. We will automatically give you the benefit of any increase in coverage made by us or by law, if there is no added premium charge. Asking one of our Agents to make a change in your policy is like asking us. If we agree with your request, we will then issue an Amended Declarations or Notice of Change Endorsement. Your request must contain enough information to identify you. 5. INSPECTION AND AUDIT We have the right but are not obligated to: a. make inspections and surveys at any time; b. give you reports on the conditions we find-, and c. recommend changes. Any inspections, surveys, reports or recommenda- tions relate only to insurability and the premiums to be charged. We do not make safety inspections. We do not undertake to provide for the health or safety of workers or the public. We do not warrant that your property or operations are safe, healthful or in compliance with any law, regulation, code or standard. Inspections, surveys, reports or recom- mendations are for our benefit only. This condition also applies to any rating, advisory, rate service or similar organization which makes insurance inspections, surveys, reports or recommen- dations. We may examine and audit your books and records at any time during or within three years after the policy period, as they relate to this insurance. 6. OUR RIGHT TO RECOVER FROM OTHERS If anyone we protect has a right to recover all or part of any payment we have made under this policy, the right to recover is transferred to us. This right will not apply under Section I if you have waived it in writing prior to loss. Anyone we protect must do nothing to harm that right. Anyone we protect will bring suit or transfer the right to recover to us and help us enforce the right to recover. POLICY ACCEPTANCE By accepting this policy, you agree that the state- ments on the Declarations are accurate and complete and are based on the facts you have given us. This policy is issued in reliance on these facts. S. PRIORITY At our option, this insurance will first protect you, and secondly others listed under the definition of anyone we protect. 9. TIME OF INCEPTION - - -- - If this policy replaces another policy ending at noon on the date of this policy, we will protect you as of that time. ADDITIONAL ERIE INSURANCE EXCHANGE CONDITIONS The following conditions apply only to policies issued by Erie Insurance Exchange. 1. ACCOUNTING Erie Indemnity Company, as Attorney-in-Fact, may keep up to 25% of the premium in return for agreeing to represent you. This amount will be used to pay expenses of management, including sales commissions, salaries, and other employment costs, the cost of supplies, and other administrative costs. The rest of the premium will be placed on the books of the Erie Insurance Exchange. We will deposit or invest this amount as permitted by law. This amount will be used to pay losses, adjustment expenses, legal expenses, court costs and reinsurance. The remainder, if any, will be used for purposes Erie Indemnity Company decides are to the advantage of the Subscribers. 2. NO CONTINGENT LIABILITY You will not be assessed for the losses of Sub- scribers. 17 X 3. RECIPROCAL AGREEMENT In return for your premium payment and your sign- ing a power of attorney to Erie Indemnity Company, we agree to provide the coverages you have chosen. Your choices are shown on the Declarations, which are part of this policy. Your signing the power of attorney permits Erie In- demnity Company to represent you and to arrange reciprocal insurance contracts between you and the other Subscribers. Your responsibility as a Subscriber is determined by this policy alone. You cannot be held responsible for the liability of the other Subscribers. This agreement is made in reliance on the facts you have given us, and is subject to all terms of this pol- icy. ADDITIONAL ERIE INSURANCE COMPANY CONDITION The following condition applies only to policies issued by Erie Insurance Company. AGREEMENT In return for your premium payment, we agree to provide the coverages you have chosen. Your choices are shown on the Declarations, which are part of this policy. This agreement is made in reliance on the facts you have given us, and is subject to all terms of this policy. This policy has been signed on our behalf et Erie, Pennsylvania by our President and Secretary. If required by law, it has been countersigned on The Declarations by our duly authorized Agent. Secretary Preside nt Z?Z Erie 4146, Insurance Home Office - 100 Erin Insurance Place • Erie., PA 1600 . 8'4.870.2004 Silt-:+SI @ d{ + oefi+,?.,-^,rl2til l;*.6?1.?,Cr'?Tl Val: our ULL (Ed. 5/88) (R) OF-8079 18 4 ' ' - PROFESSIONAL LIABILITY ULTRASURE FOR LANDLORDS GU-54 (Ed. 1/96) OF-8545 ER M. ERIE INSURANCE GROUP SPECIAL PROVISIONS ENDORSEMENT WHAT WE ALSO PAY Payment for the following is in addition to the amounts of insurance shown on the Declarations Claim Expenses under WHAT WE ALSO PAY in your basic policy are deleted and replaced by: 2. 3 court costs, to defend or settle as we believe proper, any claim or suit against anyone we protect, for damages covered under this policy. Our payment of the limit of protection for a settlement, judgment, or deposit in court ends our duty to pay under this item. expenses incurred, to investigate and defend or settle as we believe proper, any claim or suit against anyone we protect for damages covered under this policy. Our payment of the limit of protection for a settlement, judgment, or deposit in court ends our duty to pay under this item. post-judgment interest, but only that portion of the post-judgment interest which accrues on that part of any judgment that does not exceed the limit of pro- tection on a suit we defend. Our payment, offer in writing, or deposit in court of that part of the judg- ment which does not exceed the limit of protection ends our duty to pay any post-judgment interest which accrues after the date of our payment, written offer or deposit. 4. prejudgment interest or delay damages awarded on that part of any judgment that does not exceed the limit of protection. If we offer in writing to pay the applicable limit of protection, we will not pay any prejudgment interest or delay damages for the period of time after the offer. 5. reasonable expenses anyone we protect may incur at our request to help us investigate or defend a claim or suit. This includes up to $150 a day for actual loss of earnings. 6. premiums on the following types of bonds, but not for bond amounts greater than the limit of pro- tection: a. appeal bond in a suit we defend; b. bail bond (with premium of $500 or less) required due to an accident or related traffic vio- lation arising out of the use of a vehicle covered by this policy; c. attachment bond to release property of anyone we protect due to an accident or related traffic violation arising out of the use of a vehicle covered by this policy. We have no duty to apply for or furnish such bonds. 7. reasonable lawyers' fees up to $50 which anyone we protect incurs because of arrest, resulting from an accident involving a vehicle covered by this policy. First Aid Expenses under WHAT WE ALSO PAY in your basic policy are deleted and replaced by: We will pay reasonable expenses for first aid to other people and animals at the time and place of an accident involving anyone we protect. 4 a . 1 oil ?? ERIE INSURANCE GROUP ERE, BUSINESS CATASTROPHE LIABILITY COMMERCIAL GENERAL LIABILITY FIVESTAR CONTRACTORS ULTRAFLEX PACKAGE ULTRAPACK BUSINESS ULTRASURE PACKAGE FOR LANDLORDS ULTRASURE PACKAGE FOR PROPERTY OWNERS GU-56 (Ed. 5/96) OF-8648 EMPLOYMENT-RELATED PRACTICES EXCLUSION (Words in bold type are used as defined in the basic policy, unless defined in this endorsement.) WHAT WE DO NOT COVER -- ADDITIONAL EXCLUSION We do not cover under Bodily Injury Liability and Per- sonal Injury Liability bodily injury or personal injury to: 1. any person arising out of any: a. refusal to employ that person; b. termination of that person's employment; or c. employment-related practices, policies, acts or omissions, such as coercion, demotion, failure to promote, negligent evaluation, reassignment, dis- cipline, defamation, harassment including sexual harassment, humiliation or discrimination directed at that person; or 2. the spouse, child, parent, brother or sister of that person as a consequence of bodily injury or personal injury to that person at whom any of the employment-related practices described in paragraphs a., b., or c. above is directed. This exclusion applies: 1. whether the Insured may be liable as an employer or in any other capacity; and 2. to any obligation to share damages with or repay someone else who must pay damages because of the injury. 1 E. Ralph Godfrey, Esquire CIPRIANI & WERNER, P.C. Attorne for PIa~' t, v p n. s 1011 Mumms Drive, Suite 201 y LU t I { ~9 I ' ~ i (`~ J • J Lemoyne, PA 17043 Tele: (717) 975-9600 Gial'v~! .. _ ` .,vj~~~ i~~ Fax: (717) 975-3846 ~ Email: rnodfrev ac-wlaw.com - MILLERS CAPITAL INSURANCE COMPANY, individually and as assignee and subrogee of HERSHEY REAL ESTATE SERVICES, Plaintiff v. ERIE INSURANCE EXCHANGE, ERIE INSURANCE GROUP, AND ERIE INSURANCE PROPERTY & CASUALTY COMPANY, Defendants IN THE COURT OF COMMON PLEAS, CUMBERLANll COUNTY, PENNSYLVANIA ' No. 10-2216 Civil Term ' Civil Action -Law PLAINTIFF MILLERS CAPITAL INSURANCE COMPANY. INDIVIDUALLY AND AS ASSIGNEES AND SUBROGEE OF HERSHEY REAL ESTATE SERVICES' REPLY TO DEFENDANTS' NEW MATTER 41. Denied. The allegations contained in this paragraph are denied as conclusions of law to which no responsive pleading is required. 42. Denied. The allegations contained in this paragraph are denied as conclusions of law to which no responsive pleading is required. 43. Denied. The allegations contained in this paragraph are denied as conclusions of law to which no responsive pleading is required. 44. Denied. The allegations contained in this paragraph are denied as conclusions of law to which no responsive pleading is required. WHEREFORE, Plaintiff respectfully requests that this Honorable Court enter judgment in its favor and against Defendants for damages, plus interest, costs and such other and further relief as the Court deems just and proper. CIPRIANI & WERNER, P.C. By R~fh Go e ,Esquire Attorney I. o. 77052 1011 M Road, Suite 201 Lemoyne, PA 17043 (717) 975-9600 Date: 5/4/2010 Attorneys for Plaintiff CERTIFICATE OF SERVICE AND NOW, this ~7 ~ day of G~- 2010, I, E. Ralph Godfrey, Esquire, hereby certify that I served a copy of the within. eply this day by depositing the same in the United States mail, postage prepaid, at Lemoyne, Pennsylvania, addressed to: Jefferson J. Shipman, Esquire Johnson, Duffie, Stewart cYc Weidner 301 Market Street PO Box 109 Lemoyne, PA 17043-4540 . Ralp odfr Johnson, Duffle, Stewart & Weidner By: Jefferson J. Shipman I.D. No. 51785 301 Market Street P. 0. Box 109 Lemoyne, Pennsylvania 17043-0109 (717) 761-4540 jjs@jdsw.com MILLERS CAPITAL INSURANCE COMPANY, individually and as assignee and subrogee of HERSHEY REAL ESTATE SERVICES, Plaintiff V. ERIE INSURANCE EXCHANGE, ERIE INSURANCE GROUP, and ERIE INSURANCE PROPERTY & CASUALTY COMPANY, Defendants Attorneys for Plaintiff Zajc> 1 uc- j 0/1 I{,•l IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA NO. 10-2216 Civil Term CIVIL ACTION - LAW PRAECIPE TO SETTLE AND DISCONTINUE TO THE PROTHONOTARY: Please mark the above captioned action settled and discontinued, including all counterclaims, crossclaims and joinders of additional parties. JOHNS, DUFFIE, STEWART & WEIDNER B: Je _ J. Stia DISCONTINUANCE CERTIFICATE AND NOW, this 120%day of , 2010, suit has been marked as above directed. /-% :409151 --PROTHONOTARY CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing document has been duly served upon the following counsel of record, by depositing the same in the United States Mail, postage prepaid, in Lemoyne, Pennsylvania, on August 10, 2010: E. Ralph Godfrey, Esquire Cipriani & Wemer, P.C. 1011 Mumma Road, Suite 201 Lemoyne, PA 17043 . JOHNSON, DUFFIE, STEWART & WEIDNER By: 6L Melissa A. Scholly