SB-300879-B
(Ed. 06/11)
TECHNOLOGY ERRORS & OMISSIONS LIABILITY
COVERAGE FORM
THIS INSURANCE IS WRITTEN ON A "CLAIMS" MADE BASIS AND PROVIDES COVERAGE FOR THOSE "CLAIMS" WHICH ARE THE RESULT OF "WRONGFUL ACTS" HAPPENING SUBSEQUENT TO THE RETROACTIVE DATE STATED ON THE DECLARATIONS AND WHICH ARE FIRST MADE AGAINST THE INSURED DURING THE POLICY PERIOD. NO COVERAGE EXISTS FOR "CLAIMS" MADE AGAINST AN INSURED AFTER THE END OF THE POLICY PERIOD UNLESS, AND TO THE EXTENT, AN EXTENDED REPORTING PERIOD APPLIES. "DEFENSE COSTS" REDUCE THE LIMIT OF INSURANCE AND ARE SUBJECT TO A DEDUCTIBLE.
Various provisions in this coverage form restrict coverage. Read the entire coverage form carefully to determine rights, duties and what is and is not covered.
Throughout this coverage form the words "you" and "your" refer to the Named Insured shown in the Declarations, or other person or organization qualifying as a Named Insured under this coverage form. The words "we," "us" and "our" refer to the Company providing this insurance.
The word "Insured" means any person or organization qualifying as such under Section II, WHO IS AN INSURED.
Other words and phrases that appear in quotation marks have special meaning. Refer to Section VIII, DEFINITIONS.
SB-300879-B (Ed. 06/11)Page 1 of 10
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SB-300879-B
(Ed. 06/11)
I.COVERAGE
1.Insuring Agreement
A.We will pay those sums that the Insured becomes legally obligated to pay as "damages" because of a covered "claim" by reason of a "wrongful act" by the Insured or by someone for whom the Insured is legally responsible provided that:
(1)The "wrongful act" takes place in the "coverage territory;"
(2)The "wrongful act" occurs after the Retroactive Date shown in the Declarations and prior to the end of the policy period;
(3)A "claim" is first made against an Insured during the policy period and reported to us, in accordance with Section IV, CONDITIONS, paragraph 2, Duties in the Event of a "Claim;" and
(4)Prior to the inception date of this Coverage Form or the first such Coverage Form issued and continuously renewed by us, of which this Coverage Form is a renewal, whichever is earlier,
a.no "executive officer" knew of any circumstances which might have resulted in a "claim;" and
b.the "wrongful act," or any "related wrongful act" has not been the subject of any notice given under any prior coverage form.
Subject to any applicable limit of insurance, we will also pay "defense costs" in connection with such covered "claim."
B.Vicarious Liability Coverage
Any entity you are required by written contract to include as an insured for liability of such entity for an Insured's "wrongful act" is insured under this Policy but solely to the extent that a "claim" is made against it for a "wrongful act," of an Insured and only so long as the written contract is entered into before such "wrongful act" occurs. Any coverage afforded by this Section is subject always to all of the Policy's terms and conditions, provided however:
(1)there is no coverage afforded to such entity for its "wrongful acts;" and
(2)nothing herein confers any rights or duties to such entity under this Policy, other than as provided in this Section.
C.Defense
(1)Defense
Except as set forth in paragraph (2) below we have the right and duty to defend all "claims," even if the allegations are groundless, false or fraudulent. We shall have the right to appoint counsel and to make such investigation and defense of a "claim" as we deem necessary. Alternatively we may, at our option, give our written consent to the defense of any such "claim" by the Insureds. Our obligation to defend any "claim" or pay any "damages" or "defense costs," shall be completely fulfilled and extinguished if the limit of insurance has been exhausted.
(2)Defense and settlement for "claims" brought outside the United States
a.Defense of "claims" outside the United States
Solely with respect to "claims" brought outside the United States of America, its territories or possessions, we have the right, but not the duty, to defend any "claim" even if the allegations in such "claim" are groundless, false or fraudulent. We have the right to make such investigation and conduct negotiations, and, with your written consent, enter into such settlement of any "claim" we deem expedient. In the event we do not assume the defense, we shall have the right to participate in the investigation, defense and settlement of any "claim," including but not limited to, the negotiation of a settlement.
b.Settlement of "claims" outside the United States
The Insured shall not admit or assume liability for or settle any "claim" or incur any cost, charge or "defense costs" without our prior written consent, which shall not be unreasonably withheld. However, if the Insured is able to dispose of all "claims" which are subject to one deductible amount for an amount not exceeding the deductible amount (inclusive of "damages" and "defense costs"), then our consent shall not be required.
We may make any settlement of any "claim" we deem expedient with respect to any Insured, subject to such Insured's written consent. If any Insured withholds consent to such settlement, our liability for all "damages" on account of such "claim" shall not exceed the amount for which we could have settled such "claim," plus "defense costs" incurred as of the date such settlement was proposed in writing by us. Further, in the event we are defending such "claim," then we shall tender the "claim" to you and you shall thereafter, at your own expense and on your own behalf, negotiate and defend such "claim."
c.Valuation
All premiums, limits, retentions, "damages" and other amounts under this policy are expressed and payable in United States of America currency. If any judgment, settlement or any part of "damages" is expressed or calculated in any other currency, payment of such "damages" due under this Policy will be made in the currency of the United States of America, at the rate of exchange published in The Wall Street Journal on the date our obligation to pay such "damages" is established, or, if not published on that date, on the date of next publication.
D.Mediation
If, prior to institution of arbitration proceedings or service of suit or within 60 days of the institution of such proceedings or service of suit, you agree to use a process of non binding intervention by a neutral third party to resolve any "claim" reported to us, and if such "claim" is resolved through such process, we will reduce the deductible applicable to such "claim" by fifty percent or ten thousand dollars ($10,000.00), whichever is less.
E.Pre-"Claim" Assistance
Until the date a "claim" is made, we may pay for all costs or expenses we incur, at our sole discretion as a result of investigating a potential "claim" that an Insured reports in accordance with Section IV. CONDITIONS, paragraph 3., Duties in the Event of a Potential "Claim." Should a potential "claim" be investigated pursuant to this Section, and that potential "claim" later becomes a covered "claim" under this Coverage Form, then the limits of insurance and the deductible applicable to such "claim" shall apply to such "claim."
F.Expenses of the Insured
In addition to the Limit of Insurance, we will pay, with respect to any "claim," all reasonable expenses incurred by the Insured at our request to assist us in the investigation or defense of the "claim," including actual loss of earnings up to $1000.00 a day because of time off from work.
These payments will not reduce the limits of insurance nor erode any deductible.
G.Multiple Claims
More than one "claim" involving the same "wrongful act" or "related wrongful acts" shall be considered as one "claim" which shall be deemed made on the earlier of:
(1)the date on which the earliest such "claim" was first made; or
(2)the first date valid notice was given by you to us under this coverage form or under any prior coverage form of any "wrongful act" or any "related wrongful act."
2.Exclusions
The insurance does not apply to any "claim:"
Assumed Liability
based upon or arising out of any assumption of the liability of others under any contract or agreement, except that this exclusion does not apply to liability arising under Section I. COVERAGE, paragraph 1. Insuring Agreement, part B. Vicarious Liability Coverage;
Bodily Injury/Property Damage
for any actual or alleged: bodily injury (including death), sickness, disease, emotional distress, mental anguish, of any person, or "property damage;"
Claims by Insureds
by or on behalf of any Insured in any capacity provided, however that this Exclusion shall not apply to:
A.any "claim" that is in the form of a crossclaim, third-party claim or otherwise for contribution or indemnity, which is part of and results directly from a "claim" which is not otherwise excluded under this Coverage Form; or
B.any "claim" brought or maintained by or on behalf of a bankruptcy or insolvency trustee, examiner, liquidator, receiver or rehabilitator for you or any assignee of such trustee, examiner, liquidator, receiver or rehabilitator;
Deliberate Acts/Commingling or Misappropriation of Funds
based upon or arising out of any actual or alleged: dishonest, fraudulent, criminal or malicious act or omission; commingling, misappropriation or misuse of funds; or intentional wrongdoing or knowing violation of any contract or agreement by you or on your behalf if a final judgment, ruling or other finding of fact in any proceeding establishes that such act, omission, commingling, misappropriation, misuse or intentional wrongdoing was committed. We will not defend any criminal act which was the subject of a criminal prosecution in which the Insured was found guilty or pleaded guilty, nolo contendere or no contest. Criminal proceedings are not covered under this Policy regardless of the allegations made against any Insured.
For purposes of determining the applicability of this Exclusion:
A.the facts pertaining to and knowledge possessed by any natural person Insured shall not be imputed to any other natural person Insured; and
B.only facts pertaining to and knowledge possessed by any "executive officer" shall be imputed to you;
ERISA or any Similar Act
for any actual or alleged violation of the responsibilities, obligations or duties imposed upon fiduciaries by "ERISA or any Similar Act;"
Governmental Actions
by or on behalf of any federal, state or local government, including, but not limited to:
A. the Federal Trade Commission; or
B.the Federal Communications Commission;
Except if such "claim" is brought by or on behalf of such government in its capacity as your customer;
Owned Entity
by any entity not named in the Declarations if, at the time of the "wrongful act" giving rise to such "claim:"
A.any Insured controlled, owned, operated or managed such entity; or
B.any Insured was a director, officer or "employee" of such entity.
For the purpose of this exclusion, a 10% or more owner of the voting stock of a publicly held corporation or a 50% or more owner of the voting stock of a privately held corporation shall be deemed to own such entity;
Patent Infringement/Trade Secrets
based upon or arising out of actual or alleged misappropriation or infringement of patent or trade secret;
Pollution/Nuclear
based upon, directly or indirectly arising out of or in any way involving: any nuclear reaction, radiation or contamination, or any actual, alleged or threatened discharge, release, escape, or disposal of, or exposure to, "pollutants"; any request, direction or order that any of the Insureds test for, monitor, clean up, remove, contain, treat, detoxify, neutralize or in any way respond to or assess the effect of "pollutants" or nuclear reaction, radiation or contamination, or any voluntary decision to do so; or any actual or alleged "property damage," or bodily injury, sickness, disease or death of any person, or financial loss to you, your security holders, or your creditors resulting from any of the aforementioned matters;
Professional Services
based on or arising out of the rendering or failure to render the following professional services:
A.legal or accounting services;
B.architect and engineering services;
C.civil or structural engineering services;
D.third party administrator or actuarial services;
E.insurance or real estate services; or
F.any healthcare or healthcare related services;
"Proprietary Injury"/"Personal Injury"
for any actual or alleged "proprietary injury;" or "personal injury;"
Price Discounts/Games of Chance
based upon or arising out of price discounts, prizes, awards, lotteries, sweepstakes, contests or games of chance;
Securities Claims
based upon or arising out of:
A.the filing of any registration statement under the Securities Acts of 1933, or the Securities Exchange Act of 1934, any State Blue Sky Law, or any other state or local securities law; or
B.the Securities Act of 1933, the Securities and Exchange Act of 1934, rules or regulations of the Securities Exchange Commission under either or both acts, similar securities laws or regulations of state, or any laws of any state relating to any transaction arising out of, involving, or relating to the public offering of securities;
Unfair Competition/Antitrust Claims/RICO Claims
based upon or arising out of:
A.unfair competition, dilution, deceptive trade practices, civil actions for consumer fraud;
B.charges of price fixing, monopolization or restraint of trade;
C.any actual or alleged violation of:
(1)the Federal Trade Commission Act;
(2)the Sherman Act, the Clayton Act, or any federal statutory provision regarding anti-trust, monopoly, price fixing, price discrimination, predatory pricing or restraint of trade;
(3).the Racketeer Influenced and Corrupt Organizations Act; or
(4)any rules or regulations promulgated under or in connection with the above statutes, or any similar provision of any state, federal or local statutory law or common law;
D.false or deceptive advertising or misrepresentation in advertising;
Unsolicited Communication
based upon or arising out of:
A.any actual or alleged violation of any federal or state anti-spam statute or regulation, including the CAN-SPAM Act of 2003, as amended; or
B.any actual or alleged violation of any federal or state statute or regulation prohibiting the dissemination of unsolicited electronic communications to multiple third parties, including any violation of the Telephone Consumer Protection Act of 2001, as amended;
Withdrawal/Recall
for any costs or expenses incurred by any Insured, or others:
A.for the recall, removal, disposal or withdrawal of "your products" or any products which incorporate "your product" or "your work;" or
B.to repair, replace, upgrade, supplement, improve, or complete "your product," or any products which incorporate "your product" or "your work."
However, this exclusion shall not apply to "claims" for the loss of use of "your product."
Wrongful Employment Practice/ Discrimination/Harassment
based upon or arising out of any actual or alleged employment practice, discrimination, humiliation, harassment or misconduct that includes, but is not be limited to, "claims" based upon an individual's race, creed, color, age, sex, national origin, religion, handicap, marital status or sexual preference.
II.WHO IS AN INSURED
You are an Insured. In addition, the following persons or entities are Insureds:
1.any person who, during the policy period, is your partner, officer, director, member, "manager" or "employee" but, with respect to "your work," only when such services are performed on your behalf;
2.any of your former partners, officers, directors, members, "managers" or "employees" but with respect to "your work," only for such services performed on your behalf at the time of such affiliation;
3.any independent contractor, but only while acting within the scope of a contract and only with respect to "claims" alleging "damages" resulting from "your products" or "your work;"
4.any entity, other than a joint venture or partnership, not listed as Named Insureds on the Declarations, if, at the effective date of this Policy, you owned a 51% controlling ownership interest in such entity;
5.If, after the effective date of this Policy:
1.you create or acquire an entity, or
2.you merge with another entity such that you are the surviving entity,
then such entity, and any subsidiaries, partners, officers, directors, members, "managers" or "employees" of such organization who otherwise would thereby become an Insured, shall be automatically covered under this Policy, subject to its terms and conditions, provided, however coverage does not apply to any "wrongful acts" committed before you acquired or formed the entity.
III.LIMITS OF INSURANCE AND DEDUCTIBLE
1.The Limits of Insurance shown in the Declarations and the rules below fix the most we will pay regardless of the number of:
A.Insureds;
B."claims" made; or
C.persons or organizations making "claims."
2.The Aggregate Limit shown in the Declarations is the most we will pay for the sum of "damages" and "defense costs" for all "claims" to which this insurance applies.
3.Subject to 2. above, the Each Claim Limit shown in the Declarations is the most we will pay for all "damages" and "defense costs" for any one "claim" to which this insurance applies.
4.Each payment we make for "damages" or "defense costs" reduces the Limits of Insurance.
5.We shall not be obligated to pay any "damages" or "defense expenses" or defend any "claim" after the applicable Limit of Insurance (as specified in the Declarations) has been exhausted by payment of "damages" or "defense costs," or any combination thereof.
6.Deductible
Our obligation under this coverage to pay "damages" and "defense costs" applies only to the sums in excess of any deductible amount stated in the Declarations. The deductible amount is applicable to each "claim."
The deductible amount will be the amount stated in the Declarations for each "claim."
We may pay any part or all of the deductible amount to effect settlement of any "claim" and, upon notification, you shall promptly reimburse us for such deductible amount as has been paid by us.
The Limits of Insurance of this Coverage Form apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance.
IV.CONDITIONS
1.Bankruptcy
Bankruptcy or insolvency of the Insured or of the Insured's estate will not relieve us of our obligations under this Coverage Form.