1. GENERAL DESCRIPTION

Lloyds of London offers through Professional Underwriters Agency, professional liability coverage for independent testing laboratories on a policy that includes architects, engineers, and construction managers professional liability and technology services professional liability. While the testing laboratories are not specifically listed in the policy, they are considered a covered professional service and are listed on the declarations page. Written on a claims-made and reported basis, the program covers both the named insured and employees.

It also offers “prior acts” coverage to those who have been continuously insured. Since it is written on a claims-made basis, this policy would pay for an action that may have taken place under another policy, if the claim is made now. By only offering prior acts coverage to those who have been continuously insured, the company avoids an uninsured person purchasing coverage and then being covered for a previous act.

2. CONTACT

Professional Underwriters Agency

2907 Butterfield Rd., #320

Oak Brook IL 60521

(708) 575-8111

FAX: (708) 575-0033

Email: [email protected]

3. UNDERWRITING GUIDELINES

As mentioned, testing laboratories are covered in a policy that also covers architects, engineers, construction managers and technology services professionals. The agent is to submit the following information with the application: details of any prior or pending claims; current financial statements for the applicant; current brochures that describe the applicant's capabilities; the applicant's quality control program.

4. AVAILABILITY OF COVERAGE

Coverage is available in all states except Hawaii and Alaska.

5. LIMITS AVAILABLE/DEDUCTIBLES

Limits up to $5 million/$5 million are available. Defense expenses are included in the limit and the minimum deductible is $5,000. The minimum premium is $5,000.

6. INSURING AGREEMENT

The insuring agreement is broken into three sections; one for architects, engineers and construction managers professional liability; one for architects, engineers and construction managers pollution liability; and one for technology services professional liability. Written on a “pay on behalf of” basis, the policy covers the obligations of the named insured that arise out of wrongful acts committed or alleged to have been committed by the insured or others the insured is legally responsible for.

7. SUPPLEMENTARY PAYMENTS

These are coverages that are not subject to the deductible and are in addition to the limits of liability.

A. Attendance reimbursement – pays the insured up to $500 a day for attendance at mediation/arbitration proceedings, hearings, depositions and trials related to the defense of the claim. The maximum amount is $5,000 per claim.

B. Regulatory/administrative hearings reimbursement – pays up to $15,000 for legal fees and expenses in responding to regulatory or administrative actions brought against the insured by a government agency under American with Disabilities Act, Fair Housing Act, or Occupational Safety and Health Act. The action must arise out of a wrongful act, pollution condition or technology act that is reported during the certificate period.

C. Disciplinary proceedings reimbursement – pays up to $10,000 for legal fees and expenses related to disciplinary proceedings arising out of wrongful acts, pollution conditions or wrongful technology acts.

8. TERRITORY AND CLAIMS MADE AND REPORTED PROVISIONS

Coverage territory is worldwide. The wrongful act, pollution condition or wrongful technology act must be committed and reported during the certificate period; the report must be in writing and reported during the certificate period, within 60 days of expiration of the certificate period, or during the discovery coverage extension. Losses committed prior to the inception of the certificate but after any retroactive date shown in the declarations are covered if properly reported and the insured had no prior knowledge of a wrongful act on the effective date of this insurance and no other valid insurance is collectible to the insured.

9. DEFINITIONS

The following terms are defined:

Named Insured: the person or entity specified in the declarations.

Insured: Includes partners, officers or directors of a corporation, employees, heirs, executors, administrators, legal representatives, joint venture but only for liability of the named insured, entities purchased by the named insured as long as they do not exceed 10 percent of the named insured's annual revenues; if the entity exceeds this amount certain provisions must be fulfilled.

Bodily Injury: physical illness, sickness, disease, or death, including mental anguish or emotional distress resulting therefrom.

Certificate period: the period from the effective date to the expiration date or earlier termination date of this policy.

Circumstance: any fact, event, or situation that could reasonably be the basis for a claim.  

Claim: a written demand for money that the named insured receives and that alleges wrongful acts, pollution condition, or wrongful technology act. Multiple claims arising from a series of related or repeated acts shall be considered one claim.

Cleanup costs: reasonable and necessary costs and expenses incurred with the prior authorization of the insurers in the investigation, removal, or neutralization of a pollution condition. Coverage is not provided for any cleanup actions that occurred before the claim was reported.

Computer system: computers and associated input/output devices, data storage, networking, backup facilities owned or leased by an insured, or such equipment and functions such as processing, maintaining or hosting applications operated by third part service providers for the insured.

Computer virus: instructions placed on a computer system with the intent to harm, impede, corrupt, erase, remove, or disrupt the computer system and are placed without the insured's knowledge or consent.

Costs, charges and expenses: fees and charges incurred by an attorney designated by the insurer.

Damages: includes punitive damages only if insurable under law; damages are a monetary loss, a monetary judgment or settlement. It also includes costs, charges, and expenses for which the insured is legally obligated to pay as a result of a wrongful act, pollution condition, or wrongful technology act as long as said costs do not include fines, penalties, criminal assessments.

Denial of service: the inability of a third party to access the insured's computer system due to unauthorized attacks or deliberate overloading of bandwidth connections.

Discovery coverage extension: the period of time after the end of the certificate period for reporting claims.

Hacker attack: unauthorized use of or gaining access to computer systems.

Hostile fire: one which becomes uncontrollable or breaks out from where it was intended to be.

Media content: data, digital code, images, graphics, texts, or other similar material.

Personal injury: includes bodily injury, false arrest, detention or imprisonment, wrongful entry/invasion of private occupancy, malicious prosecution, libel, slander, or other disparaging comments or materials in violation of an individual's right to privacy.

Pollution condition: the actual or alleged dispersal, seepage, leakage, discharge or escape of any solid, liquid, gaseous, thermal irritant or contaminating smoke, vapors, soot, gases, liquid, waste materials or pollutants into the air, land, waterways that results in bodily injury, property damage, or cleanup costs. Heat, vapor, soot, or fumes from a hostile fire are not considered a pollution condition.

Professional services: only those services provided by the insured acting in the capacity of architect, engineer, landscape architect, interior designer, land surveyor, construction manager, environmental consultant or as specifically as listed in the declarations.

Property damage: physical injury or destruction of any tangible property including loss of use of such property or of property that has not been damaged.

Technology services: electronic media activities, digital services, internet services, data processing, computer systems analysis, consulting and training, software programming, installation and integration which are performed in rendering professional services. This does not include computer or telecommunications hardware or software, or related electronic product created, manufactured, or developed by the named insured for others or distributed, licensed, or leased by the named insured for compensation.

Theft of electronic data: unauthorized taking, misappropriation, or misuse of information that exists in electronic form by a third party.

Trade secret: information including a formula, pattern, compilation, program, device, method, or technique that derives independent economic value, actual or potential from the fact that it is not generally known to others who would obtain value from its disclosure.

Wrongful act: any actual or alleged negligent act, error, mistake, or omission in rendering or failing to render professional services for others, whether committed or alleged to have been committed by the insured or an employee or others for whom the insured is legally responsible. Acts that are dishonest, fraudulent, malicious or criminal are not included.

Wrongful technology act: similar to wrongful act but specific to the performance of technology services when such acts result in hacker or virus attacks, theft of electronic data, inability of an authorized third party to access insured's services, defamation, libel, slander, infliction of emotional distress, outrageous conduct, invasion, interference with the right of privacy, false arrest, detention, malicious prosecution, infringement to right of privacy, plagiarism, piracy, misappropriation of ideas, copyright infringement, negligent and inadvertent transmission of a computer virus to any third party.

10. MERGERS AND ACQUISITIONS

If the named insures purchases or acquires another entity whose revenues are more than 10 percent of the named insureds total annual revenues there is no coverage unless the named insured gave the insurer written notice thirty days after the effective date of the acquisition, obtained the insurers written consent to extend coverage, paid any additional premium and the certificate of insurance is endorsed to reflect the acquisition. If the named insured is consolidated or merged so that the named insured entity does not survive, there is no coverage.

11. LIMITS OF LIABILITY

The limits of liability are listed on the declarations page.

12. AWARENESS PROVISION

During the policy term if the insured becomes aware of a circumstance which may result in a claim the insured is to give written notice to the insurers of the identity of potential claimants, description of the alleged incident, description of services the insured provided, identity of the insureds involved, details as to when the insured became aware of the situation; consequences which have resulted or may result, and the nature of potential monetary damages.

13. DEFENSE, SETTLEMENT, COOPERATION

The policy contains standard defense provisions; the carrier will provide defense for any claim to which this insurance applies even if the claim is groundless, false, or fraudulent, insurers shall not settle without consent of the insured, no coverage for claims that occurred before policy inception, insurers shall appoint counsel.

14. EXCLUSIONS

The following are the exclusions contained in this policy:

A. Dishonest, fraudulent, criminal or malicious acts committed by or at the direction of the insured.

B. Intentional losses caused by or at the direction of any insured.

C. Liability assumed by the insured by contract or agreement unless such liability would have attached to the insured in the absence of such agreement.

D. Bodily injury, personal injury, sickness, disease or death to any employee arising out of and in the course of employment by the insured. Any obligation the insured is liable for under workers' compensation, unemployment compensation, employers' liability, disability benefits law or any similar law.

E. Insolvency/bankruptcy of the insured.

F. Advising, requiring, or failing to advise/require or otherwise provide any form of insurance, suretyship, or bond with respect to the insured or any other entity.

G. Ownership, rental, leasing, operation, maintenance, use or repair or any real or personal property including property damage to property owned by, occupied by, rented or leased to the insured.

H. Ownership, operation, maintenance, use, including loading or unloading, by or on behalf of the insured or at the direction of the insured any watercraft, automobiles, motor vehicles, aircraft or mobile vehicles of any kind.

I. Any express warranties or guaranties.

J. Any claim made by any entity arising out of any wrongful act, pollution condition or wrongful technology act performed for such entity:

1. Which is operated, managed or controlled by an insured or an insured has any ownership interest in excess of 25%.

2. In which an insured is an officer or director.

3. Which operates, controls, or manages the named insured, or has an ownership interest of more than 15% in the named insured.

K. Insured's activities as trustee, partner, officer, director, employee of any charitable organization, corporation, company or business other than the named insured's.

L. Any fact or circumstance known to the insured prior to the inception date which would cause a reasonable person to believe that a claim might be made.

M. Any fact or circumstance which has been any written or oral notice giving under any preceding valid and collectible policy issued to the insured.

N. Related or continuous wrongful acts, pollution condition or technology acts where the first such acts occurred prior to the retroactive date listed in item 9 of the declarations page.

O. Actual or alleged infringement or misuse of a patent or patent rights.

P. Discrimination, humiliation, harassment or misconduct based on race, creed, color, religion, gender, sexual preference or orientation, age, disability, pregnancy, national origin, failure to hire or promote.

Q. Projects where project specific professional liability insurance has been purchased and is in force unless specifically endorsed hereon.

R. Design/manufacture of any goods which are sold/supplied by the insured or other under license from the insured.

S. Violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) or any similar federal, state or local law.

T. Any insured's activities under the Employee Retirement Income Security Act (ERISA) and its amendment or regulations/orders issued pursuant thereto.

U. Anything involving asbestos.

V. War, terrorism, warlike operations, civil war, rebellion, insurrection, civil commotion; any acts taken in controlling, preventing, or suppressing any of the listed actions.

W. Claims brought by insureds against other insureds.

X. Any waste product being transported, shipped, or delivered via watercraft, aircraft, motor vehicle or mobile equipment to a location beyond a site where professional services are being rendered.

Y. Actual, alleged or threatened discharge, dispersal, release or escape of pollutants such as solids, liquids, gaseous, thermal irritants or contaminants including smoke, vapor, soot, fumes acids, alkalis, chemicals waste or any direction by the government to test for, monitor, cleanup, remove, contain, treat, detoxify or neutralize pollutants unless covered in Insuring Agreement I.B.

15. EXCLUSIONS ONLY APPLICABLE TO INSURING AGREEMENT I.C. (TECHNOLOGY SERVICE)

Z. Bodily injury, property damage, sickness, disease, death, mental anguish or injury/destruction of tangible property except for data, information, or software if the tangible property on which it resides is not damaged, lost, or destroyed.

AA. Future royalties, profits, restitution, disgorgement of profits, or costs of complying with orders granting injunctive relief.

BB. Production costs, costs of reprinting, recalling, recovering, shipping, correcting, reprocessing, restoring, replacing or reproducing erroneous, damaged or lost tangible property.

CC. Actual or alleged infringement of a trade secret.

DD. Actual or alleged inaccurate, inadequate, or incomplete description of the price of goods, products or services.

EE. Existence, emissions, or discharge of any electromagnetic field, electromagnetic radiation or electromagnetism that actually or allegedly affects the health, safety, or condition of any person or the environment, or affects the value, marketability, condition, or use of any property.

FF. Any action brought by or on behalf of the Federal Trade Commission (FTC) Federal Communications Commission (FCC) or any other federal, state or local government agency.

GG. Actual or alleged electrical or mechanical failures and or interruption, including electrical disturbance, surge, spike, brownout, or blackout.

HH. Wear or tear, latent or time delayed damages arising from services provided prior to the retroactive date or gradual deterioration or insured's failure to maintain any computer, network, software, or any other equipment.

II. Actual or alleged obligation to make licensing or royalty payments.

JJ. Withdrawal or recall of electronic products or systems or work compiled by the insured or on their behalf or any property of which such products forms a part provided. Does not apply to claims of loss of use caused by a wrongful technology act.

16. DUTIES IN THE EVENT OF A CLAIM

A. Give written notice of the following information: identity of claimants, description of act, description of services provided by the insured, identity of the insured, details as to how the insured became aware of the claim, consequences which have or may have resulted, nature of monetary damages being sought. Notice must be given either during the certificate period, within sixty days after expiration of the certificate period, or during the discovery extension period.

B. Forward any demands, documents, summons or other process to the insurer.

C. Cooperate with the insurer in the investigation of the claim. Attend hearings, depositions, or trials as needed.

D. Obtain insurers written consent prior to exercising insured's rights to reject or demand arbitration or other alternative dispute resolution process.

E. Insured will not enter any agreement, settlement or understanding concerning any claim nor admit to any wrongful act without the insurer's written consent.

17. DUTIES IN THE EVENT OF A CIRCUMSTANCE

The duties in event of a circumstance are similar to duties in event of a claim; the identity of potential claimants is required, description of the alleged wrongful act, description of services provided, identity of insureds involved, details as to when the insured became aware of the situation, consequences, and potential monetary damages and relief being sought.

18. DISCOVERY COVERAGE EXTENSION OPTION

This section outlines the insured's ability to pay an additional premium of 100% for the extension of coverage beyond the termination date of the policy.

19. CANCELLATION

Standard cancellation provisions apply; the insured or the insurer may cancel the policy with written notice. If the named insured cancels return premium is calculated on a short rate basis.

20. SUBROGATION

The insurers are subrogated to the insured's rights of recovery against any person or organization and the insured shall execute any and all instruments and papers to secure such rights.

21. AUDIT

The insurers may audit the insured's books and records during the certificate period and extensions thereof and within 3 years of final termination of the certificate or until all claims have been settled.

22. ACTION AGAINST THE INSURERS

The insured may not take action against the insurer unless all conditions of the policy have been met and the amount of such loss has been fixed or rendered certain either by final judgment against the insured after trial of the issues and time to appeal has expired. Action must be brought within 12 months after the right of action accrues hereon.

23. OTHER INSURANCE

This is a standard other insurance clause stating that this insurance is excess over any valid and collectible insurance.

24. ASSIGNMENT

Assignment can only be made with written consent of the insurer.

25. APPLICATION

The insureds agree that the statements in the application are their agreements, representations, and warranties.

26. NOTICE OF CLAIM OR CIRCUMSTANCE

Immediate written notice of claim or circumstance is to be given to the insurer.

27. WARRANTED NO HIGHER LIMITS PURCHASED

The insured shall not purchase higher limits of insurance than afforded by this policy without prior agreement of the insurers.

28. SERVICE OF SUIT CLAUSE

The insurers designate an officer of the company as the individual to receive service of suits.

29. CURRENCY

All monetary references are in United States currency and premiums and claims will be paid in United States currency.

30. SEPARATE AND SEVERAL LIABILITY OF INSURERS

Insurer's obligations are several and not joint and are limited to the extent of their individual subscriptions.

31. VALIDITY OF THIS CERTIFICATE

The certificate is not valid unless signed by the insurers' representative.

32. NUCLEAR ENERGY LIABILITY RESTRICTION

A standard nuclear energy exclusion applies.

33. MINIMIUM EARNED PREMIUM AND SHORT RATE CANCELLATION TABLE

Short rate premium calculation tables are provided.

34. ARBITRATION

A standard arbitration provision applies.