PART II D – Special Liability Conditions

PART II C — LIABILITY NOT INSURED

We do not provide insurance for any sort of costs, damages, expenses, or liability, directly or indirectly, wholly or partially, aggravated by, caused by, or resulting from any of the following, even if an accident otherwise covered contributes to such concurrently or in any sequence – except to the extent otherwise specifically described and provided for in this policy.

1. CARE, CONTROL, OR CUSTODY EXCLUSION

We do not insure property damage to property in the care, control, or custody of the insured or to property owned or transported by the insured. This does not apply to liability assumed under a written sidetrack agreement.

2. COMPLETED OPERATIONS EXCLUSION

We do not insure bodily injury or property damage arising out of your work after such work has been abandoned or completed.

Your work is deemed completed at the earliest one of the following times:

A. When all the work called for in your contract is completed. B. When all the work called for in your contract at the job location is completed if your contract calls for work at more than one location. C. When that part of the work at a job location is put to its intended use by any person or organization other than another contractor or subcontractor working on the same project. Work that needs final correction, maintenance, repair, replacement, or service, but is otherwise completed, is deemed completed.

3. CONTRACTUAL LIABILITY EXCLUSION

We do not insure bodily injury or property damage for which the insured is liable to pay damages because of the assumption of liability for such in an implied, oral, or written agreement or contract. However, refer to Item 2, Contractual Coverage, under Part II B – Supplemental Coverages.

To the extent that Item 2, Contractual Coverage, under Part II B – Supplemental Coverages. otherwise applies, we do not insure under such coverage any bodily injury or property damage which first occurs prior to execution of the agreement or contract. This Exclusion does not apply to liability for damages, otherwise insured in this policy, that the insured has in the absence of contract.

ANALYSIS:

This section begins with a clear anticoncurrent causation statement, excluding coverage when a covered loss occurs either concurrently or in sequence with one of the listed exclusions. The first exclusion is for damage to property of others that is in the care, custody or control of the insured or to property the insured owns or transports. An exception exists for liability that is assumed under a sidetrack agreement. A sidetrack agreement is one where part of a railroad track runs through land of a property owner and the property owner agrees to assume liability arising from accidents on the sidetrack. So if a train on the sidetrack hits a vehicle, it's the property owners insurer that will cover the claim. The commercial auto policy is for damage to the insured's vehicles, or damage to other vehicles caused by the insured while driving, not to property the insured may be transporting for himself or others.

Next is the completed operations exclusion. This policy does not provide coverage for damage that results from work performed by the insured after the work has been completed or abandoned. Once the insured has completed a job, he is no longer responsible for any damage caused by his work. It's important to know when an insured's work is considered to be completed. Work performed by the insured is considered to be completed based on one of three factors; when all the work called for in the contract is completed, when more than one location is in the contract but work has been completed in one of the locations, or when the work of the insured has been put to its intended use by someone other than a contractor or subcontractor. Any work that needs final correction, maintenance, repair, replacement or service but is otherwise completed is considered completed. Remember, this policy directly covers the insured's autos, and liability and medical payments to others when an insured has had an accident with another party. This exclusion is just reinforcing that the work an insured may perform is not covered once it is completed.

Next is the contractual liability exclusion, which removes coverage for injury or damage that the insured would be liable to pay because of an oral, written, or implied contract in which the insured accepts liability for such damages. There is some coverage under supplemental coverages in Part II B. In that section, coverage does not apply for any injury or damage that occurs before the execution of a contract. A contract cannot make the insured liable for an event prior to the existence of the contract. However, this exclusion does not apply to liability otherwise covered by this policy that applies in absence of any contract. If an insured is driving a covered vehicle and while changing radio stations runs into the vehicle ahead of him at a stop light, the insured will be liable for the damages to that other person's vehicle. No contract is needed in order for the insured to be liable for his obvious negligence.

4. EMPLOYEE, EMPLOYMENT, AND RELATED INJURY EXCLUSIONS

A. We do not insure any obligations of any insureds under a disability benefit, unemployment compensation, workers' compensation, or similar law.

B. We do not insure bodily injury to any of your employees arising out of and in the course of:

1. Employment by you; or 2. Performing duties related to the conduct of your business / operations.

C. We do not insure bodily injury sustained by the brother, child, parent, sister, or spouse of your employees arising out of any injury described in the preceding Paragraph B.

D. With respect to any employee who is an insured in this policy:

1. We do not insure bodily injury to a fellow employee, caused by such insured while in the course of employment by you; and 2. We will not settle any claims or suits seeking damages to the relatives of any fellow employee caused by the actions of such insured while in the course of employment by you. Relatives include but are not limited to: brothers, children, life partners, parents, or sisters.

E. We do not insure any obligation to share damages with, or repay, others who must pay damages because of any bodily injury described in the preceding Paragraphs B, C and D.

Preceding Paragraphs B thru E apply whether the claim or suit is brought by your employees or by any others or whether you are liable as an employer or in any other capacity. However, Paragraph B does not apply to liability assumed under a contract covered under Supplemental Coverage 2 or to domestic employees not eligible for workers' compensation benefits.

ANALYSIS:

There are five sections to the employee, employment and related injury exclusions. Any liability obligations of the insured stemming from a disability benefit, unemployment compensation, workers compensation or similar law are excluded. Likewise, any injury to an insured's employee that arises out of and in the course of employment by the insured or by performing duties related to the conduct of the insured's business or operations is excluded. Injury sustained by relatives of the insured's employees, such as siblings, parents, children, or spouses are excluded if they arise from the course of the employee's employment. All those types of injuries should be covered under worker's compensation or other coverages.

For employees covered under this policy as insureds, there is no coverage for injury to a fellow employee that is caused by an insured while in the course of employment. The carrier will not settle suits or claims for damages to relatives of the fellow employee that were caused by actions of an insured while in the course of employment. For example, an employee's spouse comes to meet George, an employee for lunch. Max is driving a forklift and backs into George's wife, injuring her leg. Claims for the wife's injuries will not be paid by the employer's policy because Max was performing his duties as a fellow employee of George.

Lastly, the carrier does not share damages with or repay others who must pay for injuries described in this section. Sections B through E of this exclusion apply whether the claim or suit is brought by the insured's employees or others, whether the insured is liable as an employer or in any other capacity. Paragraph B which addresses liability arising out of or in the course of employment by the insured or performing duties of such employment does not apply to liability assumed under contract under Supplemental Coverage 2, or to domestic employees who are not eligible for workers compensation coverage. Supplemental coverage 2 is contractual coverage for insured contracts as outlined in that section.

5. ENDANGERMENT OR HARM EXCLUSION We do not insure bodily injury or property damage which is a consequence of an insured's willfully harmful act or knowing endangerment.

6. EXPLOSIVES EXCLUSION

We do not insure bodily injury or property damage resulting from the explosion of explosives that you make, sell, or transport.

7. HANDLING OR MOVEMENT OF PROPERTY EXCLUSION

We do not insure bodily injury or property damage resulting from the handling or movement of any property as follows:

A. Before such property is moved from the place where it is accepted for movement into or onto the covered auto. B. After such property is moved from the covered auto to the place where it is finally delivered. C. By any mechanical device which is not attached to the covered auto, other than a hand truck.

8. OPERATIONS OF EQUIPMENT EXCLUSION

A. We do not insure bodily injury or property damage resulting from the operation of any of the following devices or equipment permanently attached to an auto:

1. Air compressors, generators, or pumps; building cleaning, geophysical exploration, lighting, spraying, welding, or well servicing equipment. 2. Cherry pickers and similar devices used to raise / lower workers.

B. We do not insure bodily injury or property damage resulting from the operation of any device permanently attached to a vehicle that would qualify as mobile equipment, under the definition of mobile equipment, if it were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensed or principally garaged.

ANALYSIS:

The next four exclusions are straightforward. Making, selling, or transporting explosives is inherently dangerous, so any injury or property damage that results from the making, selling or transporting of explosives is excluded.

Also excluded is handling or moving property before it is accepted by the insured to be placed in or on the covered auto, after it is moved from the covered auto, or when it is moved by a mechanical device not attached to the covered auto other than a hand truck. For example, the insured transports furniture from a warehouse to various customers. The insured is picking up a sofa to be delivered. If the sofa is damaged while being moved from the warehouse to the loading dock where the insured is to pick up the sofa, there is no coverage. The sofa is not yet in place to be loaded into the insured's vehicle. Once the sofa is on the loading dock and the insured is putting the sofa into his vehicle, then coverage would apply.

There is coverage while the insured transports the sofa to its final destination, and once the sofa is removed from the insured's vehicle coverage under this policy ends. The insured unloads the sofa from his vehicle onto the loading dock of the store receiving the sofa. At that point coverage ends. If a hand truck is used to help move the sofa out of the insured's vehicle there is still coverage. However, any other mechanical device being used to move the sofa negates coverage under this policy.

The operation of certain types of equipment that is permanently attached to the auto is excluded. Such equipment is: Air compressors Generators Pumps Building cleaning Geophysical exploration Lighting Spraying Welding or Well servicing equipment Cherry pickers and similar devices to raise/lower workers

Likewise, there is no coverage for injury or damage resulting from the operation of any device attached to a covered auto that would fit the definition of mobile equipment, if it was not subject to a compulsory financial responsibility law or other vehicle insurance law in the state in which the equipment is primarily garaged or licensed. So if a covered vehicle has a crane attached and the crane is not secured properly and it hits another vehicle, this would preclude coverage for this accident.

9. POLLUTION / ENVIRONMENTAL DAMAGE EXCLUSION

A. We do not insure bodily injury or property damage arising out of the actual, alleged, or threatened discharge, dispersal, emission, escape, flowing, leakage, migration, release, or seepage of pollutants or other similar forms of environmental damage, regardless of where or how such may take place, as follows:

1. That are, or that are contained in any property that is:

a. Being handled, transported, or towed by, or handled for movement into, onto or from, the covered auto; b. Otherwise in the course of transit by or on behalf of the insured; or c. Being disposed of, processed, stored, or treated in or upon the covered auto.

2. Before the pollutants or any property in which the pollutants are contained are moved from the place where they are accepted by the insured for movement into or onto the covered auto. 3. After the pollutants or any property in which the pollutants are contained are moved from the covered auto to the place where they are finally abandoned, delivered, or disposed of by the insured.

B. Paragraph A of this Exclusion does not apply to exhaust fumes, fluids, fuels, lubricants, or other similar pollutants that are needed for or result from the normal electrical, hydraulic, or mechanical functioning of a covered auto or its parts, provided:

1. The discharge, dispersal, emission, escape, flowing, leakage, migration, release, or seepage of the pollutants is from an auto part designed by its manufacturer to dispose of, hold, receive, or store such pollutants; and 2. The bodily injury or property damage does not result from the operation of any of the following devices or equipment permanently attached to an auto:

a. Air compressors, generators, or pumps; building cleaning, geophysical exploration, lighting, spraying, welding, or well servicing equipment. b. Cherry pickers and similar devices used to raise / lower workers. Paragraphs A. 2 and 3 of this Exclusion do not apply to accidents occurring away from premises owned by, leased or rented to an insured with respect to pollutants that are not in or upon a covered auto, provided:

1. The pollutants or any property in which the pollutants are contained are damaged, overturned, or upset as a result of the maintenance, operation, or use of a covered auto; and 2. The discharge, dispersal, emission, escape, flowing, leakage, migration, release, or seepage of the pollutants results directly from such damage, overturn, or upset.

ANALYSIS:

As with most policies, the injury or damage from the escape of pollutants is excluded, regardless of where or how the escape occurs. The exclusionary language is fairly standard except that it also excludes other similar forms of environmental damage; this broadens the pollution exclusion to ensure that all such substances are excluded. The actual or alleged discharge, escape, dispersal, leakage, release, migration of pollution or other similar environmental damage is excluded as follows:

The release of any pollutants that are contained in any property that is:

a. Being handled, transported, towed by, or handled from movement into, onto or from a covered auto; b. Otherwise in the course of transit by or on behalf of the insured; or c. Being disposed of, processed, stored or treated in or upon a covered auto.

Pollutants are also excluded both before or after the containers holding the pollutants are moved from the place where they are accepted and moved from the covered auto to the place where they are abandoned by the insured.

For example, the insured is hired to move barrels of a toxic chemical from a warehouse to a disposal site. If a barrel ruptures while being moved from the back of the warehouse to the loading dock where the insured will pick up the barrel, that is not covered under this policy. Likewise, once the insured has delivered a barrel of toxic chemicals at the disposal site, if the barrel ruptures once it has been delivered, that release of pollutants is not covered.

There are some exceptions. The exclusion does not apply to exhaust fumes, fluids, fuels, or  similar pollutants that are needed for the normal mechanical or electrical functioning of a covered auto or its parts, as long as the release of the pollutants is from an auto part designed to hold or store such pollutants, and the discharge doesn't result from the operation of certain equipment permanently attached to the auto. The excluded permanently attached equipment is air compressors, generators, pumps; building cleaning, geophysical exploration, lighting, spraying, welding, well services equipment, and cherry pickers and similar equipment to raise or lower workers. So if there is a vehicle accident that ruptures the gas tank, this exception would cover cleanup of the spilled gas.

The exclusion for property before being loaded onto a covered auto or after being unloaded from a covered auto does not apply to accidents that occur away from the premises owned by, leased or rented to an insured with respect to pollutants that are not in or upon a covered auto as long as the pollutants or any containers of pollutants are damaged, overturned, or upset as a result of the maintenance, use or operation of the use of a covered auto and the discharge results directly from such damage, overturn or upset. For example, the insured drives to a warehouse to pick up barrels of toxic chemicals and while pulling into the parking lot the insured hits and ruptures one of the barrels of toxic chemicals waiting to be picked up. The release of those chemicals would be covered by this exception to the pollution exclusion.

C. We do not insure under this policy any cost, expense, liability, or loss arising out of any of the following:

1. Any demand, directive, order, or request that any insured or others clean up, contain, detoxify, monitor, neutralize, remove, test for, treat, or in any way assess the effects of or respond to pollutants, or 2. Any claim or suit by, or on behalf of, any governmental authority for damages or reimbursement because of cleaning up, containing, detoxifying, monitoring, neutralizing, removing, testing for, treating, or in any way assessing the effects of or responding to pollutants.

Paragraph C does not apply to such pollution costs or expenses arising out of those accidents that are covered (not excluded) under Paragraph B of this Exclusion.

Coverage applies only if there is either bodily injury or property damage covered by this policy that results from the same accident.

ANALYSIS:

This part of the exclusion bars coverage for any cleanup costs of pollutants or any investigative costs in testing, assessing the effects of, or responding to pollutants. This is excluded regardless of who or why the cleanup is ordered, or if there is any claim or suit by or on behalf of any governmental authority for damages or reimbursement associated with the pollutants.

There is an exception for pollution costs or expenses, or any bodily injury or property damage, arising out of an accident covered by the pollution exceptions in Paragraph B above.

Using the same example of the ruptured barrel of toxic chemicals that is provided in the exception described in the analysis of Paragraph B, if the toxic chemicals from the ruptured barrel had to be cleaned up and environmental damage assessed, the exception in Paragraph C would provide coverage for these costs. If someone near the accident sustained bodily injury from contact with the toxic chemicals when the barrel ruptured, the exception will cover that bodily injury claim.

10. PROFESSIONAL ACTIVITIES EXCLUSION

We do not insure bodily injury or property damage arising out of the following:

A. The rendering or failure to render any sort of professional advice, product, or service, or the furnishing of food or drink with such. B. Handling of corpses.

ANALYSIS:

Professional liability is excluded on the general liability as these exposures are more appropriately covered under a professional liability policy. This is due in large part because each professional exposure is specific to that particular professional service or product. While professional is not defined in the form, Merriam-Webster defines it as "of, relating to, or characteristic of a profession". Other standard definitions define it similarly, with all definitions referring the word back to a "profession". The applicable definition of profession by Merriam-Webster describes it as follows:

"A calling requiring specialized knowledge and often long and intensive academic preparation; A principal calling, vocation, or employment; The whole body of persons engaged in a calling."

Suffice to say, if the profession requires specific learning requiring the passing of a test, a certification, or a degree, then it is the type of professional liability that will fall within this exclusion. Examples would include a CNA, a nurse, a chef, an attorney, a reverend, etc.

The second part of the exclusion precludes coverage for any handling of corpses, which would encompass the services of a mortuary, embalmer, one who dresses, applies makeup and/or fixes hair for a corpse, anyone who touches a corpse in any manner for any reason.

11. RACING EXCLUSION

We do not insure bodily injury or property damage arising out of any covered auto while being used in a prearranged demolition, racing, or speed contest or stunting activity, including preparation or practice for such.

ANALYSIS:

This is a standard exclusion found in most commercial auto policies. The excluded activities are all ultra hazardous exposures requiring specialized coverage. The policy isn't going to cover the use of a covered auto in even the practice or preparation of any of these activities.

12. SALES EXCLUSION

With respect to a covered auto that is used as a mobile showroom or store, we do not insure bodily injury or property damage resulting from any condition, handling, or use of any item that the insured distributes, manufactures, rents, or sells when such injury or damage occurs after the insured has relinquished possession of the item to others.

ANALYSIS:

The sales exclusion is geared towards excluding any injury or damage arising out of items an insured manufactures, distributes, rents or sells once the insured has relinquished possession of the item. The insured may use a covered auto as a mobile showroom or store, however the items the insured handles are not covered once they are no longer in the insured's possession. For example, an insured travels across the country selling their handmade jewelry, using their covered van as the showroom. Once a customer completes a purchase, if they fall and are injured while leaving the van, there would be coverage for the bodily injury as the customer was occupying the covered auto. However, if as a result of the fall the purchased jewelry item was broken, there would be no property damage coverage for the jewelry.

13. WRONG DELIVERY OF LIQUID PRODUCTS EXCLUSION

We do not insure bodily injury or property damage resulting from the following if such injury or damage occurs after the delivery has been completed:

A. The delivery of any liquid to the wrong address. B. The delivery of any liquid into the wrong receptacle. C. The delivery of one liquid instead of another.

Delivery is deemed completed even if further correction, maintenance, repair, replacement, or service is necessary because of such wrong delivery.

ANALYSIS:

As in the sales exclusion, once a delivery of liquids has been completed there is no coverage for any resulting bodily injury or property damage. Specifically excluded delivery actions are delivery of liquids to a wrong address, delivery of liquids to the wrong receptacle, and delivery of the wrong liquid anywhere. For example, a distributor of oils makes a delivery of twelve cases of canola oil to a grocery store that was supposed to be twelve cases of olive oil and the delivery was accepted by the grocery store's employee. Two of the cases were punctured by a forklift when moving the cases from the loading dock to the store, damaging the bottles and spilling the oil contents. It was then discovered that the wrong oils were delivered; however because the delivery was complete there is no coverage under this policy for the resulting property damage to the oils in the two cases, even though the distributor agreed to replace all twelve cases with the proper oil.

THE FOLLOWING ADDITIONAL EXCLUSIONS APPLY ONLY TO COVERAGE B

Exclusions 14 through 18 only apply to Coverage B., Medical Payments coverage.

14. AUTO BUSINESS EXCLUSION We do not insure medical expenses in connection with bodily injury to any insured while working in a business that parks, repairs, sells, services, or stores autos. However, this Exclusion does not apply if such business is yours.

ANALYSIS:

The importance of this exclusion is to limit the insurance coverage to the insured's business and not the business of others. As an example, if someone is traveling with the insured and they fall and become injured at the service station while the insured is pumping gas, the injury will not be covered under the insured's medical payments coverage unless the service station is the insured's business.

15. OTHER VEHICLE EXCLUSION We do not insure medical expenses in connection with bodily injury to:

A. You or any family member while occupying or, while a pedestrian, when struck by any vehicle owned by you or furnished or available for your regular use that is not a covered auto. B. Any family member while occupying or, while a pedestrian, when struck by any vehicle owned by or furnished or available for the regular use of any family member that is not a covered auto.

ANALYSIS:

The purpose of this exclusion is to restrict bodily injury medical expense coverage to apply only to covered autos, with respect to injury of the insured or family members. In doing so, if an insured or family member were injured by or while in any other vehicle, this medical expense coverage would not pay for that injury. However, if a family member was involved in an accident in a covered auto, the medical expense coverage will pay for the family member's injury.

16. USED AS A PREMISES EXCLUSION We do not insure medical expenses in connection with bodily injury to any insured while occupying a vehicle that is located for use as a premises.

ANALYSIS:

This exclusion bars medical expense coverage for an insured when the injury is sustained while the insured was occupying a vehicle that is located for use as a premises. Premises is not defined, so it will be given its common meaning of deeded land, with or without buildings on it. For example, if an insured is injured while occupying a vehicle used as a residence, the medical expense coverage will not extend to that bodily injury.

17. USED WITHOUT PERMISSION EXCLUSION We do not insure medical expenses in connection with bodily injury to any person while using a vehicle without a reasonable belief that such person is permitted to use such vehicle.

ANALYSIS:

This excludes medical expenses for anyone sustaining bodily injury while using a vehicle without permission to use that vehicle. If the person has a reasonable belief that they had permission to use the vehicle however, the exclusion will not apply.

18. YOUR MEDICAL SERVICES / GENERAL MEDICAL EXCLUSIONS A. We do not insure medical expenses in connection with medical services that are provided by you, your employees, or others under contract to you to provide medical services, including first aid to others at the time of an accident. B. We do not insure any medical expenses in connection with any bodily injury otherwise excluded in this policy.

ANALYSIS:

The first part of this exclusion precludes coverage for medical expenses provided under contract, regardless if such medical services were provided by an insured or the insured's employees, or anyone under the contract. For example, if an insured is involved in an accident and the insured administers first aid to another person, those medical expenses for the other person will not be covered under this policy.

The second part of the exclusion is a 'catch-all' exclusion that precludes coverage for any medical expenses if the bodily injury is one that is excluded anywhere in the policy.

PART II D — SPECIAL LIABILITY CONDITIONS

1. DUTIES OF INSUREDS — WHAT TO DO IN CASE OF ACCIDENT, CLAIM, INJURY, OR SUIT You, other insureds, and other coverage beneficiaries must do all of the following things:

A. Immediately notify us of all relevant circumstances relating to a claim or any incident which may result in a claim, with all necessary information. For example: who you are; the time, place, and circumstances of the accident or injury; the names and addresses of injured persons and witnesses.

B. Immediately send us all bills, documents, notices, papers, or summonses related to any claim or suit brought against any insured or to any medical expense claims.

C. Cooperate with us in matters relevant to the claim or suit. Assist us in: conducting suits, including by attending hearings and trials and giving evidence; enforcing any insured's rights of contribution or indemnity against others; investigating accidents; making settlements; obtaining records (or other information) or the attendance of witnesses.

D. Submit to examination and provide statements under oath and sign and swear to such. If more than one person is examined, we reserve the right to examine and receive statements from each person separately and out of the presence of the others. We also reserve the right to video record any examination.

E. Refrain from voluntarily making payments, assuming obligations, or incurring defense, investigative, or any other expenses – unless with our specific written authorization to do so (otherwise such undertakings will be at the insured's own expense and we will not pay for them).

F. With regard to Coverage B, coverage beneficiaries must, as we may reasonably require: provide written proof of claim (under oath, if required); submit, at our expense, to physical examinations by physicians of our choice; and authorize us to obtain medical records.

Failure to comply with these (or other conditions) can alter or void our obligations under this policy.

ANALYSIS:

In every policy of insurance, an insured has certain duties of responsibility in the event coverage under the policy may be triggered. Paragraph 1 lists six duties of any insured or others who might receive coverage benefits under this insurance policy.

The first duty is to notify: the insurer must be notified immediately and be given all relevant circumstances relating to a claim or any incident which may result in a claim, with all necessary information. Since no one really knows when an incident might later result in a claim, it is best to notify the insurer of all incidents involving the subject of this insurance. Examples of required information are who (insured and anyone else involved) when (time), where (place), and what (circumstances) of the accident or injury; the names and addresses of injured persons and witnesses.

The second duty is to send: the insured must send all bills, documents, notices, papers, or summonses related to any claim or suit brought against any insured, or anything related to medical expense claims.

The third duty is to cooperate and assist: the insured must cooperate with the insurer in any and all matters related to a claim or suit; and assist the insurer in all aspects of this insurance and in fulfilling its obligations under the policy. This can include such things as conducting suits, including attending hearings and trials and giving evidence; enforcing any insured's rights of contribution or indemnity against others; investigating accidents; making settlements; obtaining records (or other information) or the attendance of witnesses.

The fourth duty is to submit: the insurer needs to conduct investigations of claims and suits under the policy and as such the insured and others involved may be required to submit to examinations and attest to statements under oath by signature. This may be done individually without being in the presence of others, and the insurer may also video the examinations.

The fifth duty is to not obligate the insurer in any manner: the insured may not make any payment, assume any obligation, or incur any defense or investigative expenses, or any other expenses without the insurer's specific written authorization to do so. Any deviation from this requirement will be solely at the insured's own expense

The sixth duty pertains to Coverage B beneficiaries: such coverage beneficiaries must provide the insurer with written proof of their claim (by oath if required), and submit to physical examinations by physicians chosen by the insurer (at insurer's expense), and authorize the insurer to obtain medical records. This must be done as often as required by the insurer.

2. LIMITS OF LIABILITY Our maximum total liability payable for the sum of all damages, injury, liability and loss covered by this policy is limited as follows – regardless of the number of covered autos, insureds, premiums paid, vehicles involved in the accident, or claims made or suits brought by one or more persons or organizations. Our obligation to make payments ceases when the applicable limit is used up in payment of judgment or settlements.

A. Accident Limits – Coverage A Our maximum limit of liability payable under Coverage A in any one accident is the accident limit shown in the Declarations.

B. Accident / Per Person Limits – Coverage B Our maximum limit of liability payable under Coverage B for any one person in any one accident is the "per person" limit shown in the Declarations.

C. Application of Limits

1. The limits described above apply separately to each consecutive 12 month period, beginning with the policy term shown in the Declarations. 2. If the policy is originally issued for more than 12 consecutive months with a terminal period less than 12 months, the limits apply separately to each consecutive 12 month period and the terminal period. For example; if the policy is issued for a period of 27 months: 12 months, 12 months; 3 months. However, if extended after issuance, the terminal period is included in the last 12 month period. For example, 12 months and 15 months.

No one will be entitled to receive duplicate payments for the same elements of damages, expenses, or loss under this policy and any Uninsured or Underinsured Motorists Coverage added to this policy.

ANALYSIS:

The limit of insurance is an aggregate limit, as it is the most the insurer will pay for all damages, injury, liability and loss, regardless of the number of covered autos, insureds, premiums paid, vehicles involved in the accident, or claims made or suits brought by one or more persons or organizations. The limit of insurance ceases when the applicable limit of insurance has been used up in the payment of judgments or settlements.

There are two separate limits; one for Coverage A and another limit for Coverage B. The Coverage A limit is the most the insurer will pay in any one accident; while the Coverage B limit is the most the insurer will pay for any one person in any one accident, shown as the "per person" limit in the Declarations. If an insured has more than one accident in the policy term, the accident limit shown in the Declarations will be available for each accident, until the maximum limit has been paid out. In each accident, the per person limit will be available to each person involved in the accident, until such time as the maximum limit has been paid out.

For example, an insured has a Coverage A limit of $1 million and a coverage B limit of $300,000. The aggregate limit for the policy is $2 million. The policy runs from January to January, and the insured has an accident in April, injuring two people with injuries of $75,000 for the first person and $225,000 for the second person, and $30,000 for the vehicle. The total of the accident is $330,000, and all amounts are paid out as they are within the policy limits. A few months later the insured has another accident, this time with $50,000 in vehicle damage and $70,000 medical payments for the first person, $100,000 for the second person, $115,000 for the third person and $50,000 for the fourth person. This is a total of $335,000. While no individual person exceeded the $300,000 limit, the total has been exceeded by the amount of injuries among the victims. Therefore, the payments will be adjusted so that only $300,000 will be paid out in total for the second accident. A few months later the insured has yet another accident, with $100,000 paid out for vehicle damage and $1,200,000 paid out for the first injured person and $500,000 for the second injured person. Not only does this accident exceed the coverage limits for coverage B, but the aggregate limits have been exceeded as well among all the accidents for the year; the total losses come up to $2,515,000. Therefore, the amounts paid out for this last accident will not completely pay for the injuries as the aggregate has been exceeded.

The limits apply to each consecutive twelve month period, beginning with the policy term shown in the Declarations, referred to as the terminal period. If the policy is extended past twelve months for an extended period of less than twelve months, the same limits will apply for the twelve months plus the extended period; in other words, the limits will not increase beyond the initial twelve month policy limits. For example; if the policy is issued for a period of twenty-seven months: twelve months, twelve months; three months. However, if extended after issuance, the terminal period is included in the last twelve month period. For example, twelve months and fifteen months.

There is no stacking of limits for this coverage and Uninsured or Underinsured Motorists Coverage added to this policy. For example, if an insured receives payment under the Accident Limit for an accident involving an uninsured vehicle, he cannot receive payment under the Uninsured Motorists Coverage for the same accident.

3. OTHER CONDITIONS A. Except for the limits of liability and any duties / rights assigned to the first named insured, this insurance applies separately: to each insured against whom claim is made or suit is brought; to each named insured as if the only named insured. B. Bankruptcy of the insured does not relieve us of our obligations under this policy.

ANALYSIS:

Other condition A is the severability of interest provision. The limits, rights and duties under the policy apply individually to each insured as if they were the only insured. In other words, the applicable limit does not get shared among insureds, as each insured has the same rights to coverage and defense under the policy, but each insured is also responsible for fulfilling the duties as if they were the named insured.

Other condition B assures the insured that in the event of bankruptcy, the policy will remain intact and the insurer will still pay claims and settle losses according to the policy contract.