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CONTRACTORS "ALL RISKS" (CAR)

CONTRACTORS "ALL RISKS" POLICY No.

1 NOW THIS POLICY WITNESSETH that in consideration of the Insured having paid or agreed to pay to the Company the premium stated in the said Schedule

1.1 THE COMPANY HEREBY AGREE subject to the terms, exceptions and conditions contained herein or attached hereto or endorsed hereon that if during the Period of Insurance stated in the said Schedule or during any further period in respect of which the Insured shall have paid and the Company shall have accepted premium the Insured shall sustain toss or damage or shall incur liability in the circumstances provided for by this Policy and defined herein the Company shall indemnify the. Insured in the manner hereinafter described.

2 GENERAL EXCEPTIONS

2.1 The Company shall not indemnify the Insured in respect of loss, damage or liability directly or indirectly caused by or arising out of:

2.1.1 war. invasion, act of foreign enemy; hostilitics (whether war be declared or not), civil war, rebellion, revolution, insurrection. mutiny, military or usurped power or persons acting on behalf of or in connection with any political organisation with activities directed towards the overthrow or influencing of a government, de jure or de facto, by force, confiscation, nationalisation, commandeering, requisition or destruction or damage by order of any government, de jure or de facto, or by any public authority;

2.1.2 strike, riot, lock out, civil commotion or persons taking part in labour disturbances;

2.1.3 acts of terrorism committed by a person or persons acting on behalf of or in connection with any organisation. For the purpose of this exclusion "terrorism" means the use of violence for political ends and includes the use of violence for the purpose of putting the public or any section of the public in fear;

2.1.4 nuclear weapons, material, ionising radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste, from the combustion of nuclear fuel and for the purposes of this exception combustion shall include any self sustaining process of nuclear fission.

2.2 In any action, suit or other proceeding where the Company allege that by reason of the provisions of exceptions 2.1.1 2.1.2 and 2.1.3 above any loss damage or liability is not covered by this Insurance the burden of proving that such loss damage or liability is covered shall be upon the Insured.

3 SECTION I- MATERIAL DAMAGE.

3.1 The Company shall indemnify the Insured in respect of loss of or damage to the Insured Property described in the Schedule whilst at the Site during the Period of Insurance arising from any cause whatsoever not hereinafter excluded.

3.2 The Company shall not indemnify the Insured in respect of that part of the Works:

3.2.1 which has been taken into use or occupation by the Employer from the time of such taking into use or

3.2.2 for which a certificate of completion has been issued from the expiry of 28 days from the date of completion certified therein;

3.2.3 whichever of 3.2.1 or 3.2.2 is the earlier unless;

3.2.4 such loss or damage be occasioned during the Maintenance period stated in the Schedule and

3.2.5 was caused by an occurence during the Construction Period stated in the schedule or

3.2.6 was caused by an Insured contractor in the course of complying with his obligations under the maintenance and defects liability clauses of the Contract.

3.3 Provided that thc total liability of the Company under this Section shall not exceed the Sum Insured shown in the Schedule for each item of the Insured Property.

EXCEPTIONS TO SECTION I

3.4 The Company shall not indemnify the Insured in respect of:

3.4.1 loss or damage due to any fault, defect, error or omission in or failure of any design plan or specification;

3.4.2 loss or damage due to defect in material or workmanship but this exception shall be limited to that part of the Insured Property directly affected and shall not exclude loss or damage to other parts of the Insured Property resulting from an accident due to such defect;

3.4.3 loss of or damage to any item of machinery forming part of the Works or Constructional Plant due to its own explosion, mechanical or electrical breakdown or derangement but this exclusion shall not be deemed to exclude damage to other parts of the Works or Constructional Plant arising as a consequence of such explosion, breakdown or derangement;

3.4.4 loss of Insured Property due to it being stolen or otherwise missing from the Site unless such loss is identifiable by the Insured with a specific occurrence;

3.4.5 loss of or damage to cash, bank notes, treasury notes, cheques, postal orders, money orders, stamps, deeds, bonds, bills of exchange, promissory notes and securities;

3.4.6 loss of use, liquidated damages, penalities, performance guarantees or other consequential losses;

3.4.7 loss or damage due to wear and tear, rust, mildew or other deterioration due to gradually operating causes;

3.4.8 the cost of maintenance;

3.4.9 loss of or damage to any locomotive, waterborne vessel, aircraft or vehicle other than any land vehicle which is used solely on the Site and which is not used on any public road or public highway to which any road traffic legislation applies;

3.4.10 damage to tyres whilst attached to a vehicle or plant unless the vehicle or plant is damaged at the same time;

3.4.11 loss or damage due to cessation of work whether total or partial.

CONDITIONS TO SECTION I

3.5 The Sum Insured shall in respect of Item 4 in the Schedule represent the new replacement value inclusive of erection, freight and customs.

3.6 If in the event of loss or damage to the Insured Property under Item 4 it is found that the Sums Insured are less than the amounts required to be Insured the amount recoverable under this Policy shall be reduced in such proportion as the Sums Insured bear to the amounts required to be Insured.

3.7 In the event of loss or damage to the Insured Property under Item 4 indemnifiable under this Policy the basis of loss settlement shall be:

3.7.1 in the case of damage which can be repaired, the costs of necessary repairs without deduction for depreciation, however indemnification shall be limited to costs not exceeding the actual value of the damaged property;

3.7.2 in the case of a total loss, the actual value of the Insured property immediately before the occurrence of the loss less salvage.

3.8 In the event of loss or damage to the Insured Property the Insurance hereunder shall be maintained in force during the Period of Insurance for the Sum Insured the Insured undertaking to pay an additional premium at the agreed rate on the amount of any loss exceeding HK$100,000, pro rata from the date of such loss or damage to the expiry of the Period of Insurance but this additional premium shall be disregarded for the purpose of any adjustment of premium under General Condition 5.6 of this Policy.

4 SECTION II- LIABILITY TO THIRD PARTIES

4.1 The Company shall indemnify the Insured in respect of all sums which the Insured shall become legally liable to pay for:

4.1.1 accidental death, bodily injury, illness or disease suffered by any person arising out of the performance of the Contract described in the Schedule;

4.1.2 accidental loss or damage to physical property arising out of the performance of the Contract described in the Schedule.

4.2 The liability of the Company under this section of the Policy for all compensation payable to any claimant or number of claimants in respect of or arising out of all occurrences of a series consequent on or attributable to one original cause shall not exceed the limit of indemnity specified in the Schedule.

4.3 In respect of any claim covered by this Section of the Policy the Company shall in addition be liable for:

4.3.1 all costs and expenses of litigation recovered by any claimant against the Insured;

4.3.2 all costs and expenses of litigation incurred by the Insured with the written consent of the Company in resisting any claim.

4.4 Where the Insured consists of more than one party the Insurance by this Section shall apply to each party as if a separate policy had been issued to each party.

4.5 Provided always that the aggregate liability of the Company shall not be increased beyond the limit of indemnity specified in the Schedule.

EXCEPTIONS TO SECTION II

4.6 The Company shall not indemnify the Insured in respect of:

4.6.1 liability in respect of death, bodily injury, illness or disease suffered by any person employed by an Insured Contractor or employed by any party to whom part or parts of the Insured Contract have been sub-contracted. However this exclusion shall not apply to any liability which may attach to any sub-contractor Insured under this Policy in respect of death bodily injury illness or disease suffered by a person employed by any other sub-contractor;

4.6.2 liability in respect of compensation claimed from the Insured by an injured person or dependent under any Employees Compensation Legislation;

4.6.3 liability resulting from or attributable to or caused by the ownership or possession or use by or on behalf of the Insured of any locomotive, waterborne vessel, aircraft or vehicle other than any land vehicle which is used solely on the contract Site and which is not used on any public road or public highway to which any Road Traffic Legislation applies;

4.6.4 liability compulsorily insurable under any legislation governing the use of motor vehicles;

4.6.5 liability in respect of loss or damage to any building, property or structure caused by or resulting from vibration or by the removal or weakening of support;

4.6.6 liability in respect of loss of or damage to property belonging to or in the care, custody or control of the Insured;

4.6.7 liability in respect of loss or damage to permanent or temporary works or materials forming part of the Contract or contracts Insured under this Policy;

4.6.8 liability consequent upon any agreement by the Insured to pay any sum by way of indemnity or otherwise or predetermined penalties or liquidated damages imposed under any contract entered into by the Insured unless such liability would have attached also in the absence of such agreement, contractual penalty or liquidated damages.

5 GENERAL CONDITIONS

5.1 This Policy shall be construed according to the laws of Hong Kong.

5.2 The Policy and the Schedule shall be read together as one contract and any word or expression to which a specific meaning has been attached in any part of this Policy or of the Schedule shall bear such meaning wherever it may appear.

5.3 All the terms. exceptions and conditions contained herein or endorsed hereon are incorporated in and form part of this contract of Insurance and are deemed to be conditions precedent to any liability on the part of the Company so far as they relate to anything to be done by the Insured.

5.4 The expressions "Constructional Plant;' "Certificate of Completion", "Contract", "Contractor", "Contract Sum", "Final Contract Sum", "Maintenance Period", "Site", "Specification" and "Works" shall bear the meaning ascribed to them in the Government of Hong Kong General Conditions of Contract for Civil Engineering Works/Building Works (1985 Edition).

5.5 If any change shall occur materially varying any of the facts upon which this Policy is based the Insured shall immediately give notice in writing to the Company and the premium shall be adjusted in accordance with any agreed rate.

5.6 The Insured shall within three months of the expiration of the Period of Insurance furnish to the Company a declaration of the Final Contract Sum and if such sum shall differ from the Contract Sum the premium shall be adjusted accordingly subject to any minimum retained premium previously agreed.

5.7 The Insured shall also take and cause to be taken all reasonable precautions to prevent loss damage or accident and shall comply with the "Construction Sites (Safety) Regulations" and any ordinance or regulation which might apply in respect of the Insured Contract.

5.8 In the event of any occurrence which might give rise to a claim under this Policy the Insured shall:

5.8.1 notify the Company as soon as possible and in writing give an indication as to the nature and extent of the damage;

5.8.2 at the expense of the Company take such immediate action as is necessary to minimise the loss provided that such expense shall not increase the Company ultimate loss;

5.8.3 keep parts affected and make them available for inspection by a representative or surveyor of the Company for a reasonable period of time but the Insured shall not in any case be entitled to abandon any property to the Company whether taken possession of by the Company or not;

5.8.4 submit a formal claim and furnish all such information and documentary evidence as the Company may require within six months of the occurrence or such further time as the Company may in writing agree, such agreement not to be unreasonably withheld;

5.8.5 inform and assist the police authorities in case of loss or damage due to theft or burglary or malicious action;

5.8.6 immediately send to the Company upon receipt any writ summons or other proceedings which may be commenced against the Insured;

5.8.7 give to the Company all information and assistance to enable the Company to settle or resist any claim or institute proceedings.

5.9 In the event of a claim or claims arising for which the Company could be liable under this Policy the Company shall be entitled:

5.9.1 to undertake in the name and on behalf of the Insured the absolute conduct and control of any proceedings and the settlement of the same;

5.9.2 to take proceedings at their own expense and for their own benefit but in the name of the Insured to recover compensation or secure an indemnity from any third party in respect of anything covered by this Policy;

5.9.3 to pay to the Insured in respect of any claim or claims the maximum liability of the Company under Section II of this Policy as stated in the Schedule or such lesser sum for which the said claim or claims can be settled (subject to deduction in either case of any sum or sums already paid on account for such claim or claims) and thereafter the Company shall be under no further liability in respect of said claim or claims except for payment of costs and expenses incurred prior to the date of such payment and for which the Company may be liable hereunder.

5.10 The Insured shall not negotiate, pay, settle, admit or repudiate any claim under the Policy without the written consent of the Company.

5.11 This Insurance is not to be called upon in contribution and is only to pay any loss hereon if and so far as not recoverable under any other Insurance.

5.12 All differences arising out of this Policy shall be referred to the decision of an Arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator to the decision of two Arbitrators one to be appointed in writing by each of the parties within one calendar month after having been required in writing so to do by either of the parties or in case the Arbitrators do not agree of an Umpire appointed in writing by the Arbitrators before entering upon the reference. The Umpire shall sit with the Arbitrators and preside at their meetings and the making of an award shall be a condition precedent to any right of action against the Company. If the Company shall disclaim liability to the Insured for any claim hereunder and such claim shall not within twelve months from the date of such disclaimer have been referred to arbitration under the provisions herein contained then the claim shall for all purposes be deemed to have been abandoned and shall not thereafter be recoverable hereunder.

Erection All Risks (EAR)

1. The Insured shall at the expense of the Insurers do and concur in doing and permit to be done all such acts and things as may be necessary or required by the Insurers in the interest of any rights or remedies, or of obtaining relief or indemnity from parties (other than those insured under this Policy) to which the Insurers shall be or become entitled or subrogated upon their paying for or making good any loss or damage under this Policy, whether such acts and things are or become necessary or required before or after the Insured’s indemnification by the Insurers.
2. If any difference shall arises as to the amount to be paid under this Policy (liability being otherwise admitted), such difference shall be referred to the decision of an Arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single Arbitrator to the decision of two Arbitrators, one to be appointed in writing by each of the parties, within one calendar month after having been required in writing so to do by either of the parties, or, in case the Arbitrators do not agree, of an Umpire to be appointed in writing by the Arbitrators before the latter enter upon the reference. The Umpire shall sit with the Arbitrators and preside at their meetings. The making of an award shall be a condition precedent to any right of action against the Insurers.
3. If a claim is in any respect fraudulent, or if any false declaration is made or used in support thereof, or if any fraudulent means or devices are used by the Insured or anyone acting on his behalf to obtain any benefit under this Policy, or if a claim is made and rejected and no action or suit is commenced within three months after such rejection or, in case of arbitration taking place as provided herein, within three months after the Arbitrator or Arbitrators or Umpire have made their award, all benefit under this Policy shall be forfeited.
4. If at the time any claim arises under the Policy there is any other insurance covering the same loss, damage or liability the Insurers shall not be liable to pay or contribute more than their rateable proportion of any claim for such loss, damage or liability.

Section I - Material Damage Policy No.

The Insurers hereby agree with the Insured that if at any time during the period of cover the items or any part thereof entered in the Schedule shall suffer any unforeseen and sudden physical loss or damage from any cause, other than those specifically excluded, in a manner necessitating repair or replacement, the Insurers will indemnify the Insured in respect of such loss or damage as hereinafter provided by payment in cash , replacement or repair (at their own option ) up to an amount not exceeding in respect of each of the items specified in the Schedule the sum set opposite thereto and not exceeding in any one event the limit of indemnity where applicable and not exceeding in all the total sum expressed in the Schedule as insured hereby .

The Insurers will also reimburse the Insured for the cost of clearance of debris following upon any event giving rise to a claim under this Policy provided a separate sum therefore has been entered in the Schedule.

The Insurers shall not, however, be liable for

1. the deductible stated in the Schedule to be borne by the Insured in any one occurrence;
2. consequential loss of any kind or description whatsoever including penalties , losses due to delay, lack of performance, loss of contract;
3. loss or damage due to faulty design, defective material or casting, bad workmanship other than faults in erection;
4. wear and tear , corrosion , oxidation, incrustation;
5. loss of or damage to files , drawing , accounts , bills, currency, stamps , deeds, evidences of debt, notes, securities, cheques, packing materials such as cases, boxes crates;
6. loss discovered only at the time of taking an inventory.

Provisions Applying to Section I

Memo 1- Sums Insured: It is a requirement of this insurance that the sums insured stated in the Schedule (under items 1 and 2) shall not be less than the full value of each item at the completion of the erection, inclusive of freight, customs duties, dues , erection cost, and the Insured undertakes to increase or decrease the amounts of insurance in the event of any material fluctuation in the level of wages or prices provided always that such increase or decrease shall take effect only after the same has been recorded on the Policy by the Insurers.

If, in the event of loss or damage , it is found that sums insured are less than the amounts required to be insured, then the amount recoverable by the Insured under this Policy shall be reduced in such proportion as the sums insured bear to the amounts required to be insured. Every object and cost item is subject to this condition separately.

Memo 2- Basis of Loss Settlement : In the event of any loss or damage the basis of any settlement under this Policy shall be

1. in the case of damage which can be repaired - the cost of repairs necessary to restore the items to their condition immediately before the occurrence of the damage less salvage, or
2. in the case of a total loss - the actual value of the items immediately before the occurrence of the loss less salvage,

However, only to the extent the costs claimed had to be borne by the Insured and to the extent they are included in the sums insured and provided always that the provisions and conditions have been complied with.

The Insurers will make payments only after being satisfied by production of the necessary bills and documents that the repairs have been effected or replacement has taken place, as the case may be. All damage which can be repaired shall be repaired, but if the cost of repairing any damage equals or exceeds the value of the items immediately before the occurrence of the damage, the settlement shall be made on the basis provided for in b) above.

The cost of any provisional repairs will be borne by the Insurers if such repairs constitute part of the final repairs and do not increase the total repair expenses.

The cost of any alterations, additions and/or improvements shall not be recoverable under this Policy.

Memo 3 - Extension of Cover : Extra charges for overtime, nightwork, work on public holidays, express freight are covered by this insurance only if previously and specially agreed upon in writing.

Memo 4 - Surrounding Property : Loss of or damage to property located on or adjacent to the site and belonging to or held in case, custody or control of the Principal(s) or Contractor(s) shall only be covered if occurring in direct connection with the erection, construction or testing of the items insured under Section I and happening during the Period of Cover, and provided that a separate sum therefore has been entered in the Schedule under Section I , item 4. This cover does not apply to construction/erection machinery and construction/ erection plant and equipment.

Section II - Third Party Liability Policy No.

The Insurers will indemnify the Insured up to but not exceeding the amounts specified in the Schedule against such sums which the Insured shall become legally liable to pay as damages consequent upon

1. accidental bodily injury to or illness of third parties ( whether fatal or not),
2. accidental loss of or damage to property belonging to third parties occurring in direct connection with the erection , construction or testing of the items insured under Section I and happening on or in the immediate vicinity of the site during the Period of Cover.

   In respect of a claim for compensation to which the indemnity provided herein applies, the Insurers will in addition indemnify the Insured against

   1. all cost and expenses of litigation recovered by any claimant from the Insured, and
   2. all costs and expenses incurred with the written consent of the Insurers,provided always that the liability of the Insurers under this section shall not exceed the limits of indemnity stated in the Schedule.

      Special Exclusions to Section II

      The Insurers will not indemnify the Insured in respect of

      1. the deductible stated in the Schedule to be borne by the Insured in any one occurrence;
      2. expenditure incurred in doing or redoing or making good or repairing or replacing anything covered or coverable under Section I of this Policy;
      3. liability consequent upon
      1. bodily injury to or illness of employees or workmen of the Contractor(s) or the Principal(s) or any other firm connected with the project which or part of which is insured under Section I, or members of their families;
      2. loss of or damage to property belonging to or held in care, custody or control of the Contractor(s), the Principal(s) or any other firm connected with the project which or part of which is insured under Section I, or an employee or workman of one of the aforesaid;
      3. any accident caused by vehicles licensed for general road use or by waterborne vessels or aircraft;
      4. any agreement by the Insured to pay any sum by way of indemnity or otherwise unless such liability would have attached also in the absence of such agreement.

      Special Conditions Applying to Section II

      1. No admission, offer, promise, payment or indemnity shall be made or given by or on behalf of the Insured without the written consent of the Insurers who shall be entitled, if they so desire, to take over and conduct in the name of the Insured the defence or settlement of any claim or to prosecute for their own benefit in the name of the Insured any claim for indemnity or damages or otherwise and shall have full discretion in the conduct of any proceedings or in the settlement of any claim and the Insured shall give all such information and assistance as the Insurers may require.

      The insurers may so far as any accident is concerned pay to the Insured the limit of indemnity for any one accident (but deducting therefrom in such case any sum or sums already paid as compensation in respect thereof) or any lesser sum for which the claim or claims arising from such accident can be settled and the Insurers shall thereafter be under no further liability in respect of such accident under this section.

      Section III - Principal’s Advance Loss of Profits

      ________________________________________________________________________

      Policy No.

      The Insurers shall indemnify the Insured - named as Principal in the Schedule to Section I of this Policy - in respect of loss of gross profit actually sustained due to the reduction in turnover and the increased cost of working as defined in this Section, if at any time during the period of insurance stated in the Schedule to this Section any or all the insured items suffer loss or damage covered under Section I of this Policy, unless specifically excluded in this Section, thereby causing an interference in the erection work and/or testing schedule resulting in a delay of commencement of and/or interference with the insured business, hereinafter referred to as " the delay " .

      The amount payable as indemnity hereunder shall be :

      1. in respect of loss of gross profit: the sum obtained by applying the rate of gross profit to the amount by which the actual turnover during the indemnity period falls short of the turnover which would have been achieved had the delay not occurred;
      2. in respect of increased cost of working : the additional expenditure necessarily and reasonably incurred for the sole purpose of avoiding or diminishing the reduction in turnover which, without such expenditure, would have taken place during the indemnity period, but not exceeding the sum obtained by applying the rate of gross profit to the amount of the reduction in turnover thereby avoided.

      If the annual sum insured hereunder is less than the sum obtained by applying the rate of gross profit to the annual turnover, the amount payable shall be reduced proportionately.

      Definitions

      Period of Insurance

      The period of insurance shall be the period stated in the Schedule to this Section, terminating on the date specified in the Schedule or on any earlier date when the EAR material damage cover of Section I ceases.

      Schedule Date of Commencement of the Insured Business

      The date stated in the Schedule to this Section or any revised date upon which the business would have commenced had the delay not occurred.

      Indemnity Period

      That period during which the results of the business are affected in consequence of the delay, beginning on the scheduled date of commencement of the insured business and not exceeding the maximum indemnity period stated in the Schedule to this Section

      Time Excess

      The period stated in the Schedule to this Section for which the Insurers are not liable. The corresponding amount shall be calculated by multiplying the average daily value of loss sustained during the indemnity period by the number of days agreed upon as time excess.

      Turnover

      The amount of money (less discounts allowed) paid or payable to the Insured for goods, products or services sold, delivered or rendered in the course of the insured business conducted at the premises.

      Annual Turnover

      The turnover which, had the delay not occurred, would have been achieved during the 12 months after the scheduled date of commencement of the insured business.

      Annual Gross Profit

      The amount by which the value of the annual turnover and the value of the closing stock exceeds the value of the opening stock and the amount of the specified working expenses. The value of the opening and closing stocks shall be calculated in accordance with the Insured’s normal accounting methods, due provisions being made for depreciation.

      Specified working expenses shall be any costs incurred for the acquisition of goods, raw materials, or auxiliaries as well as for supplies (unless required for the upkeep of operations) and any costs for packaging , carriage, freight, intermediate storage, turnover ,tax, purchase tax, license fees and royalties for inventors, etc., insofar as such costs are dependent on turnover.

      Rate of Gross Profit

      The rate which , had the delay not occurred, would have been earned on the turnover during the indemnity period

      Special Exclusions Applying to Section III

      The Insurers shall not be liable for

       

      1. loss of gross profit and/ or increased cost of working due to any delay caused by or resulting from

          

         1. loss or damage covered under Section I by way of endorsement, unless it has been specifically agreed in writing;
         2. earthquake, volcanic eruption, tsunami, unless it has been specifically agreed in writing;
         3. loss of or damage to surrounding property, construction machinery, plant and equipment;
         4. loss of or damage to operating media or feedstock, shortage, destruction, deterioration of or damage to any materials necessary for the insured business;
         5. any restrictions imposed by a public authority;
         6. non-availability of funds;
         7. alterations, additions, improvements, rectification of defects or faults or elimination of any deficiencies carried out after the occurrence;
         8. loss of or damage to items taken over or taken into use by the Insured or for which cover under Section I to this policy has ceased;
      2. any loss due to fines or damages for breach of contract, for late or non-completion of orders, or for any penalties of whatever nature;
      3. loss of business due to causes such as suspension, lapse or cancellation of a lease, license or order, etc. which occurs after the date of actual commencement of the business;
      4. loss of or damage to erection work of a prototype nature, unless specifically agreed by endorsement.

   Provisions Applying to Section III

   Memo 1 - Extension of Period : Any extension of the period of insurance under Section I of this Policy shall not automatically lead to an extension of the period of insurance stated in the Schedule to this Section.

   Any extension of the period of insurance under this Section of the Policy shall be requested in writing as early as possible by the Insured, stating the circumstances leading to the need for extension, and shall have effect for this Section only if specifically agreed upon in writing.

   Any alteration of the schedule date of commencement of the insured business shall be reported and shall have effect for this Section only if specifically agreed upon in writing .

   Memo 2 - Basis of Loss Settlement : In calculating the rate of gross profit and annual turnover, the following points shall in particular be taken into consideration:

   1. the results of the insured business for the 12- month period after commencement,
   2. variations and special circumstances which would have affected the insured business had the delay not occurred,
   3. variations and special circumstances affecting the insured business after commencement,so that the final figures represent as closely as may be reasonably practicable the results which the insured business would have obtained after the scheduled date of commencement had the delay not occurred.

   Memo 3 - Return of Premium : If the Insured declares ( certified by the Insured’s auditors ) that the gross profit earned during the accounting period of twelve months following the commencement of the insured business or the date on which but for the delay the business would have commenced was less than the sum insured thereon, a pro rata return of premium not exceeding one third of the premium paid shall be made in respect of the difference.

   If any loss or damage has occurred giving rise to a claim under this Policy, such return shall be made in respect only of so much of said difference as is not due to such damage.

1. The Insured shall present the Insurers with updated progress reports at intervals stated in the Schedule to this Section.
2. In the event of any material change in the original risk such as

3. In the event of any occurrence which might cause a delay and give rise to a claim under this Section:
1. the Insured shall immediately notify the Insurers by telephone or telegram and send them written confirmation thereof within forty-eight hours of the occurrence;
2. the Insured shall do and concur in doing and permit to be done all such things as may be reasonably practicable to minimize or establish the extent of any interference with the erection work and/or testing schedule so as to avoid or diminish any delay resulting therefrom;
3. the Insurers and every person authorized by the Insurers shall, without prejudice to any party insured by this Policy, have access to the erection site where such loss or damage has occurred for the purpose of direct negotiation with the responsible contractor or subcontractor in order to establish the possible cause and extent of the loss or damage, its effect on the insured items, to examine the possibilities for minimizing any delay in the scheduled date of commencement of the insured business, and if necessary to make any reasonable recommendations for the avoidance or minimization of such delay.