1.     Insuring Agreement

a.     We will pay those sums that the “insured” becomes legally obligated to pay as damages because of “bodily injury” or “property damage” to which this insurance applies. We will have the right and duty to defend the “insured” against any “suit” seeking those damages. However, we will have no duty to defend the “insured” against any “suit” seeking damages for “bodily injury” or “property damage” to which this insurance does not apply. We may at our discretion investigate any “occurrence” and settle any claim or “suit” that may result. But:

(1)     The amount we will pay for damages is limited as described in SECTION II – LIMITS OF INSURANCE; and

(2)     Our right and duty to defend end when we have used up the applicable Limit of Insurance in the payment of judgments or settlements under Coverage H or I or medical expenses under Coverage J.

     No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under the ADDITIONAL COVERAGES.

b.     This insurance applies to “bodily injury” and “property damage” only if:

(1)     The “bodily injury” or “property damage” is caused by an “occurrence”; and

(2)     The “bodily injury” or “property damage” occurs during the policy period.

c.     Damages because of “bodily injury” include damages claimed by any person or organization for care, loss of services or death resulting at any time from the “bodily injury.”

d.     ”Property damage” that is loss of use of tangible property that is not physically injured will be deemed to occur at the time of the “occurrence” that caused it.

2.     Exclusions

     This insurance does not apply to:

a.     Expected or Intended Injury

     ”Bodily injury” or “property damage” expected or intended from the standpoint of the “insured.” This exclusion does not apply to “bodily injury” resulting from the use of reasonable force to protect persons or property.

b.     Contractual Liability

     ”Bodily injury” or “property damage” for which the “insured” is obligated to pay damages by reason of the assumption of liability in a contract or agreement. This exclusion does not apply to liability for damages:

(1)     That the “insured” would have in the absence of the contract or agreement; or

(2)     Assumed in a contract or agreement that is an “insured contract”, provided the “bodily injury” or “property damage” occurs subsequent to the execution of the contract or agreement. Solely for the purposes of liability assumed in an “insured contract”, reasonable attorneys' fees and necessary litigation expenses incurred by or for an “insured's” “indemnitee” shall be deemed to be damages because of “bodily injury” or “property damage”, provided:

(a)     Liability to such “indemnitee” for, or for the cost of, that “indemnitee's” defense has also been assumed in the same “insured contract”; and

(b)     Such attorneys' fees and litigation expenses are for defense of that “indemnitee” against a civil or alternative dispute resolution proceeding in which damages to which this insurance applies are claimed.

c.     Pollution

(1)     ”Bodily injury” and “property damage” arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants:

(a)     At or from any premises, site or location which is or was at any time owned or occupied by, or rented or loaned to, any “insured”;

(b)     At or from any premises, site or location which is or was at any time used by or for any “insured” or others for the handling, storage, disposal, processing or treatment of waste;

(c)     Which are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for any “insured” or any person or organization for whom you may be legally responsible; or

(d)     At or from any premises, site or location on which any “insured” or any contractors or subcontractors working directly or indirectly on any “insured's” behalf are performing operations:

          (i) If the pollutants are brought on or to the premises, site or location in connection with such operations by such “insured,” contractor or subcontractor; or

          (ii) If the operations are to test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants.

     Subparagraphs (a) and (d)(i) do not apply to “bodily injury” or “property damage” arising out of 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.

(2)     Any loss, cost or expense arising out of any:

(a)     Request, demand or order that any “insured” or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of pollutants; or

(b)     Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to, or assessing the effects of pollutants.

     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.

d.     Release or Discharge From Aircraft

     ”Bodily injury” or “property damage” caused by or resulting from any substance released or discharged from an aircraft. This exclusion does not apply to model or hobby aircraft unless used or designed to carry an operator(s), any other person(s) or cargo.

e.     Aircraft, Motor Vehicle, Motorized Bicycle or Tricycle

     ”Bodily injury” or “property damage” arising out of:

(1)     Ownership of any aircraft, “motor vehicle”, motorized bicycle or tricycle by any “insured”; or

(2)     Maintenance, use, operation or “loading or unloading” of any aircraft, “motor vehicle”, motorized bicycle or tricycle by any “insured” or any other person.

     This exclusion does not apply to:

(a)     An aircraft that causes “bodily injury” or “property damage” to a “residence employee” who is not operating or maintaining it;

(b)     Parking a “motor vehicle” or motorized bicycle or tricycle on, or on the ways next to, premises you own or rent, provided the “motor vehicle” is not owned by, or rented or loaned to you or the “insured”;

(c)     A “motor vehicle” not subject to motor vehicle registration by reason of its exclusive use as a device for assisting the handicapped.

(d)     A licensed recreational “motor vehicle” owned by an “insured,” provided the “occurrence” takes place on the “insured location;”

(e)     ”Bodily injury” or “property damage” arising out of the operation of any of the equipment listed in paragraph f.(2) or f.(3) of the definition of “mobile equipment” (SECTION IV);

f.     Watercraft

     ”Bodily injury” or “property damage” arising out of:

(1)     Ownership by any “insured” of an excluded watercraft described below; or

(2)     Maintenance, use, operation or “loading or unloading”, by any “insured” or any other person, of an excluded watercraft described below.

     Excluded watercraft are those that are principally designed to be propelled by engine power or electric motor or are sailing vessels, whether owned by or rented to an “insured”. This exclusion does not apply to watercraft:

(1)     That are not sailing vessels and are powered by:

(a)     Inboard or inboard-outdrive engine or motor power of fifty horsepower or less not owned by an “insured”;

(b)     Inboard or inboard-outdrive engine or motor power of more than fifty horsepower not owned by or rented to an “insured”;

(c)     One or more outboard engines or motors with twenty-five total horsepower or less;

(d)     One or more outboard engines or motors with more than twenty-five total horsepower if the outboard engine or motor is not owned by an “insured”;

(e)     Outboard engines or motors of more than twenty-five total horsepower owned by an “insured” if:

     (i)     You acquire them prior to the policy period; and

          i.     You declare them at policy inception; or

          ii.     Your intention to insure is reported to us in writing within forty-five days after you acquire the outboard motors.

     (ii)     You acquire them during the policy period.

     This coverage applies for the policy period.

(2)     That are sailing vessels with or without auxiliary power:

(a)     Less than twenty-six feet in overall length;

(b)     twenty-six feet or more in overall length, not owned by or rented to an “insured”.

(3)     That are stored.

     This exclusion does not apply to “occurrences” of “bodily injury” or “property damage”:

(1)     That take place on the “insured location”; or

(2)     Sustained by a “residence employee” in the course of employment by an “insured”.

g.     Mobile Equipment

     ”Bodily injury” or “property damage” arising out of:

(1)     The transportation of “mobile equipment” by a “motor vehicle” owned or operated by, or rented or loaned to, any “insured;” or

(2)     The use of any self-propelled land vehicle, or “mobile equipment” in, or while in practice or preparation for, a prearranged racing, speed, strength or demolition contest or in any stunting activity.