About This Policy
This is an excess of loss policy. It covers loss above the limits of the underlying insurance shown in the schedule, up to the limit of liability of this policy. It is not a standalone policy: it adopts the terms of the followed policy, except where this policy says otherwise.
This policy does not drop down. If the underlying insurance does not pay, for any reason, this policy still responds only above the attachment point. Drop-down cover for the insolvency of an underlying insurer, or for exhaustion of an underlying aggregate limit, is available only by endorsement.
This policy, together with your schedule and any endorsements shown in it, forms your contract of insurance with us. Please read it together with the followed policy and the other underlying insurance, and tell us if anything in the schedule is incorrect. Where the schedule and this wording differ, the schedule applies. Words with special meanings are listed in the Definitions section.
This wording is written for businesses and professionals. Some buyers, such as small businesses, may be retail clients under the Corporations Act 2001 (Cth). Where a buyer is a retail client, the issuer must give a Product Disclosure Statement and make a Target Market Determination available. This wording is not itself a Product Disclosure Statement. [WP REVIEW: confirm the retail-client posture statement for excess layers written above retail-eligible primary covers.]
Version and Document History
This document is version-controlled. The version and date shown on the cover page and in the footer of each page govern this text. The version stated in your schedule as current at inception applies for the life of your policy period, unless your schedule or an endorsement states otherwise.
Schedule
(Completed separately for each policy. It contains your specific details.)
The schedule shows:
- The named insured and ABN
- The policy period, start and end dates
- The followed policy: insurer, policy number, wording and version, period, and limit
- The underlying insurance: each policy in the tower below this policy, by insurer, policy number, layer limit, attachment and expiry date
- The attachment point, and any gap excess you bear
- The limit of liability of this policy, in the aggregate, and any limit for any one claim
- Our share of this layer, where this layer is shared between insurers, and the other insurers on the layer
- The retroactive date, where the followed policy is written on a claims-made basis and this policy states a different date
- The defence costs cap, where it differs from the cap in the Defence Costs clause
- The premium, the minimum premium, stamp duty and GST
- The state or territory whose law governs this policy (see the Governing Law condition)
- The endorsements that apply, by code, with their variables
Definitions
These words have the meanings below wherever they appear in this policy, the schedule or an endorsement. The singular includes the plural and the plural includes the singular. A word defined in the followed policy and not defined here has the meaning it has in the followed policy.
| Attachment Point | The amount shown in the schedule as the attachment point. It is the total of the limits of the underlying insurance that apply to a loss, plus any gap excess shown in the schedule. It is fixed at the start of the policy period and does not change if any underlying insurance is reduced, cancelled, not renewed or not paid. The Attachment and Exhaustion clause says when it is reached. |
| Claim | Has the meaning given to it in the followed policy. Where the followed policy responds to a loss rather than a claim, a reference in this policy to a claim means that loss. |
| Control Group | The chief executive officer, chief financial officer, general counsel, head of risk or insurance, and directors of a company that is an insured, or a person performing an equivalent role. |
| Defence Costs | Has the meaning given to it in the followed policy, or the nearest equivalent term in the followed policy for the costs of investigating, defending or settling a claim. |
| Endorsement | A clause in the endorsement library at the end of this policy whose code is shown in the schedule, read with the variables shown for it in the schedule. |
| Followed Policy | The policy named in the schedule as the followed policy, on the wording, version and terms in force at the start of the policy period. It is usually the primary policy. A renewal, replacement or change to it binds us only as the Changes to the Followed Policy clause states. |
| Gap Excess | Any amount shown in the schedule as a gap excess. It sits between the top of the underlying insurance and the attachment point, and you bear it. |
| Limit of Liability | The amount shown in the schedule as the limit of liability of this policy. Where this layer is shared between insurers, our limit of liability is our share of it. |
| Loss | Has the meaning given to it in the followed policy, including defence costs where the followed policy treats defence costs as part of loss. |
| Policy Period | The period shown in the schedule, unless this policy is cancelled earlier. |
| Retroactive Date | Where the followed policy is written on a claims-made basis, the retroactive date of the followed policy, unless the schedule shows a different retroactive date for this policy. Where the schedule shows a later date, this policy does not cover any claim arising from an act, error, omission or matter that first happened before that later date, even if the followed policy covers it. Where the schedule shows an earlier date than the retroactive date of the followed policy, the earlier date does not widen this policy. This policy covers only loss that the followed policy covers, so the retroactive date of the followed policy still applies. |
| Underlying Insurance | The followed policy and every other policy shown in the schedule as underlying insurance, each at the limit, attachment and terms shown in the schedule at the start of the policy period. |
| Underlying Insurer | An insurer that issued any of the underlying insurance. |
| Underlying Limit | For each policy of underlying insurance, its limit shown in the schedule. Where a policy of underlying insurance has both a limit for any one claim and an aggregate limit, the underlying limit is the limit that applies to the loss. |
| We, Us, Our | The insurer or insurers named in the schedule as insurers of this policy, each for its own share. |
| You, Your | Every person or entity that is an insured under the followed policy, including the named insured shown in the schedule. |
What Is Covered
Follow-form Excess Layer
We will pay loss that is covered by the followed policy, to the extent that it exceeds the attachment point, up to the limit of liability.
Except where this policy states otherwise, this policy adopts the terms of the followed policy as they are at the start of the policy period, including its insuring clauses, definitions, exclusions, conditions, claims trigger, geographical limits and jurisdiction limits, subject to the definition of Retroactive Date. Where the followed policy has a sub-limit for a particular loss, this policy does not cover that loss unless the schedule shows that this policy sits excess of that sub-limit.
Where this policy and the followed policy differ, this policy applies. This does not apply to a term of the followed policy that protects an insured from avoidance or reduction of cover, or from the imputation of another insured's knowledge or conduct. This policy always follows those terms, including a non-avoidance or severability promise, and the Your Duty of Disclosure condition and the How the Exclusions Apply exclusion are read subject to them. Where a term of the followed policy cannot sensibly apply to an excess layer (for example a premium, excess, notification address or limit), the corresponding term of this policy applies instead.
Attachment and Exhaustion
This policy responds to a loss only once the attachment point has been reached for that loss.
The attachment point is reached when the full underlying limit of each policy of underlying insurance that applies to the loss, and any gap excess, has been paid by any one or more of:
- the underlying insurers;
- you;
- any other insurer, or any other person, paying on your behalf.
A payment counts towards the attachment point only if it is a payment of loss that would be covered by the underlying insurance under which it is counted, disregarding any deductible, excess or retention under that underlying insurance. It does not matter whether the payment was made by way of judgment, award or settlement, or in what order the payments were made.
A settlement for less than an underlying limit does not prevent the attachment point being reached, as long as the difference is paid by you or on your behalf. We are not bound by the amount or terms of any settlement between you and an underlying insurer for the purpose of deciding whether the loss is covered under this policy.
[WP REVIEW: confirm the Australian authority, if any, on exhaustion by payment of an underlying limit, and that this clause achieves the intended result that payment by the insured fills the underlying layer.]
No Drop-down
This policy does not drop down to replace any underlying insurance, and does not pay any part of a loss below the attachment point. That applies whatever the reason the underlying insurance does not pay, including:
- the insolvency, administration or liquidation of an underlying insurer, or its inability to pay;
- the reduction or exhaustion of an aggregate underlying limit by other losses;
- the cancellation, non-renewal, expiry, avoidance or reduction of any underlying insurance;
- a refusal by an underlying insurer to pay all or part of a loss, for any reason.
In each of these cases you bear the amount below the attachment point that the underlying insurance does not pay. This clause does not apply to the extent that the E03 Drop-down for Underlying Aggregate Exhaustion endorsement or the E09 Drop-down for Underlying Insurer Insolvency endorsement applies.
Narrower Followed Policy
This policy covers only loss that the followed policy covers. Where any other underlying insurance is broader than the followed policy, this policy does not follow the broader terms. Where any other underlying insurance is narrower than the followed policy, a loss falling within the gap reaches the attachment point only if the underlying limit of the narrower policy is paid by you or on your behalf, as the Attachment and Exhaustion clause provides.
This clause does not apply to the differences in cover specified in the E01 Difference in Conditions endorsement where that endorsement applies.
Changes to the Followed Policy
This policy follows the followed policy as it is at the start of the policy period. A change to the followed policy or any other underlying insurance during the policy period, including an endorsement, a change of wording or version, or a change of limit, excess or retroactive date, binds us only if we agree to it in writing.
If the followed policy is renewed or replaced during the policy period on terms that are no wider than, and a limit that is not less than, the terms and limit shown in the schedule, this policy follows the renewal or replacement on the terms shown in the schedule.
Defence Costs
Defence costs are treated under this policy as they are under the followed policy. Where the followed policy pays defence costs within its limit, defence costs paid by us are within, and reduce, the limit of liability, unless the E04 Defence Costs in Addition to the Limit endorsement applies. Where the followed policy pays defence costs in addition to its limit, we pay defence costs in the proportion that our payment of loss bears to the total loss, in addition to the limit of liability, up to the defence costs cap. The defence costs cap is 50% of the limit of liability, unless the schedule shows a different amount.
We will pay defence costs as they are incurred once the attachment point has been reached. Our consent to defence costs is needed only where the followed policy requires the consent of the primary insurer, and we will not unreasonably withhold or delay it.
Where defence costs are advanced in a civil penalty or criminal proceeding, we advance them as they are incurred. The insured repays them if a final adjudication, or a court's finding, establishes conduct that this policy, the followed policy or the law does not allow to be covered.
Extended Reporting and Run-off
The limit of liability applies to claims first made during the policy period, or, where the followed policy responds to a loss rather than a claim, to loss first discovered during the policy period.
If the followed policy gives an extended reporting period or discovery period because it is cancelled or not renewed, and this policy is also cancelled or not renewed at the same time and you have not replaced it with other excess insurance, this policy follows that period for the same length of time. A claim first made in that period is treated as first made during the policy period. The limit of liability is not reinstated or increased: it applies once across the policy period and that period together.
In any other case, this policy does not cover a claim first made after the policy period ends, even if the followed policy covers it in an extended reporting period or discovery period.
[WP REVIEW: confirm that following the followed policy's extended reporting period only where this policy ends at the same time is appropriate, and the position where the followed policy renews but this policy does not.]
What Is Not Covered
Every exclusion in the followed policy applies to this policy. This policy also has the exclusions below, which apply whether or not the followed policy has a corresponding exclusion.
Amounts Below the Attachment Point
Any part of a loss that falls below the attachment point, including any deductible, excess or retention under any underlying insurance, any gap excess, and any amount that an underlying insurer does not pay.
Fines and Penalties
Any fine, penalty, punitive, exemplary or aggravated damages, or civil pecuniary penalty, unless the followed policy covers it and the law allows it to be insured.
We do not pay any fine or penalty that the law does not allow to be insured, whatever law governs this policy. In particular, we do not pay a penalty imposed under work health and safety law in a State or Territory whose law prohibits insurance of it (including New South Wales, Victoria and Queensland), and we do not pay a criminal fine. We do not cover any amount that it is unlawful for us to pay, including a penalty that statute prohibits a person from insuring, or a liability that the Corporations Act 2001 (Cth), sections 199A and 199B condition describes.
[WP REVIEW: confirm the list of jurisdictions that prohibit insurance of WHS penalties; library sources differ on WA and Victoria.]
War, Terrorism and Nuclear
Any loss arising directly or indirectly from:
- war, invasion, act of foreign enemy, hostilities or warlike operations (whether war is declared or not), civil war, rebellion, revolution, insurrection, or military or usurped power;
- an act of terrorism, meaning an act, or the threat of an act, that involves the use of force or violence, or harm to life, property or infrastructure, by any person or group, done or threatened for political, religious, ideological or similar purposes, including to influence a government or to put the public or any section of it in fear; or
- ionising radiation or contamination by radioactivity from any nuclear fuel or nuclear waste, or the radioactive, toxic, explosive or other hazardous properties of any nuclear assembly or component.
The act of terrorism part of this exclusion does not apply to the extent that the followed policy covers loss arising from an act of terrorism and the schedule shows that this policy follows that cover.
How the Exclusions Apply
Where the followed policy has a write-back, carve-back or sub-limit for a matter excluded above, that write-back, carve-back or sub-limit does not extend this policy unless the schedule shows that this policy sits excess of it. The conduct of one insured is not imputed to another insured for the purpose of these exclusions, except as the followed policy provides.
How Much We Will Pay
Limit of Liability
The most we will pay for all loss under this policy during the policy period, including under any endorsement, is the limit of liability, unless the E02 Reinstatement of the Limit of Liability endorsement applies. Where the schedule also shows a limit for any one claim, the most we will pay for any one claim is that limit, and the limit of liability still applies to all claims together.
Claims that the followed policy treats as one claim, or as related, are one claim under this policy, subject to the limit of liability and the policy period that the followed policy assigns to them.
Shared Layer
Where this layer is shared between insurers, each insurer is liable only for its own share of each loss within the layer, and of the limit of liability, as shown in the schedule. We are not liable for the share of any other insurer, including if that insurer is insolvent or does not pay.
Order of Payment
This policy is liable only after the attachment point has been reached, and then only for the part of a loss above it, up to the limit of liability. Any insurance above this policy responds only after the limit of liability has been paid. Where an underlying limit is restored or reinstated after a loss, the attachment point for later losses includes the restored or reinstated amount.
Other Insurance
This policy is written as a true excess layer above the underlying insurance named in the schedule. It is excess of, and does not contribute with, that underlying insurance, and pays only after the attachment point is reached.
If a loss covered by this policy is also covered by another insurance policy that is not shown in the schedule, we will not refuse or reduce our payment because of that other insurance. We may seek contribution from the other insurer as the law allows. Where that other policy covers the same loss in the same layer, we contribute with the other insurer in the proportion that our limit of liability bears to the total limits for that layer.
Recoveries
Any amount recovered from a third party in respect of a loss paid under this policy and the underlying insurance, after deducting the reasonable costs of the recovery, is applied first to the layer above this policy, if any, then to this policy, then to the underlying insurance, in that order, and lastly to you. Each layer receives no more than it paid. This provision does not apply to the extent that a different order is required by law.
Your Obligations
This section sets out what you must do. The Insurance Contracts Act 1984 (Cth) condition limits what we may do if you do not comply.
Maintain the Underlying Insurance
You must keep the underlying insurance in force throughout the policy period, at the limits and on the terms shown in the schedule, except for the reduction or exhaustion of an aggregate underlying limit by payment of loss.
If you do not, this policy still applies as if the underlying insurance had been kept in force, and the attachment point does not change. We are not liable for any loss that the underlying insurance would have paid had it been kept in force.
Tell Us About Claims
You must give us notice of any claim, and of any circumstance, within the time and in the manner required by the followed policy. A notice given to the insurer of the followed policy under its terms is notice to us, as long as we also receive a copy within a reasonable time.
You must also tell us as soon as reasonably practicable when you become aware that a loss, including reserves for defence costs, is likely to exceed half of the attachment point, or that an underlying limit is likely to be paid in full. Notification of circumstances that may give rise to a claim has the effect provided in s.40(3) of the Insurance Contracts Act 1984 (Cth).
Cooperate With Us
You must give us the information, documents and help that we reasonably ask for about any claim that may involve this policy. We may take part, at our own cost, in the investigation, defence and settlement of any such claim, and you must keep us informed of significant developments in it.
Settlement Consent
You must not settle a claim, or agree to any judgment, for an amount that is likely to involve this policy, without our written consent. We will not unreasonably withhold or delay our consent.
Tell Us About Changes
You must tell us as soon as reasonably practicable if any underlying insurance is cancelled, not renewed, changed, or reduced other than by payment of loss, or if an underlying insurer becomes insolvent or enters administration or liquidation.
General Conditions
Insurance Contracts Act 1984 (Cth)
Nothing in this policy excludes, restricts or modifies the operation of the Insurance Contracts Act 1984 (Cth). Where this policy is inconsistent with the Act, the Act prevails.
If this policy would otherwise let us refuse to pay a claim, in whole or in part, because of something you did or did not do after this policy was entered into, section 54 of the Act applies. We may not refuse to pay the claim only because of that act or omission. Our liability is reduced by the amount that fairly represents the extent to which our interests were prejudiced. Where the act or omission could reasonably be regarded as capable of causing or contributing to the loss, we may refuse to pay only the part of the claim that the act or omission caused or contributed to. We may not refuse any part that you prove the act or omission did not cause. This applies to every condition, exclusion, limit and obligation in this policy, not only to the claims conditions.
[WP REVIEW: confirm that the maintenance consequence in the Maintain the Underlying Insurance obligation (fixed attachment point) operates as a definition of the layer insured and not as a refusal to pay to which s.54 applies.]
Corporations Act 2001 (Cth), sections 199A and 199B
Section 199A of the Corporations Act 2001 (Cth) limits the liabilities and legal costs for which a company may indemnify its officers. Section 199B prevents a company from paying a premium for insurance that covers an officer against a liability, other than one for legal costs, arising out of conduct involving a wilful breach of duty in relation to the company, or a contravention of section 182 or 183 of that Act.
To the extent the company pays the premium, this policy does not cover an officer who is insured under the followed policy for a liability, other than legal costs, that section 199B prevents the company from insuring. This does not reduce cover for any other liability, or for legal costs.
[WP REVIEW: confirm this statement of ss 199A and 199B, and whether cover for a liability within s 199B can be provided where the insured person pays the relevant part of the premium.]
Your Duty of Disclosure
This is a contract of insurance for a business. It is not a consumer insurance contract. Before you enter into this policy with us, you have the duty of disclosure in section 21 of the Insurance Contracts Act 1984 (Cth): you must tell us every matter that you know, or that a reasonable person in the circumstances could be expected to know, is relevant to our decision whether to accept the risk of the insurance and, if so, on what terms. You have the same duty before you renew, extend, vary or reinstate this policy. For a company that is an insured, what it knows is what a member of its control group knows (see the definition of Control Group).
You do not need to tell us anything that reduces the risk we insure you for, that is common knowledge, that we know or should know as an insurer, or that we waive your duty to tell us about.
If you do not tell us something you are required to, we may reduce the amount we will pay you if you make a claim, or cancel this policy, or both, only as the Insurance Contracts Act 1984 (Cth) allows. If your failure is fraudulent, we may refuse to pay a claim and treat this policy as if it never existed.
Severability. Disclosure is assessed separately for each insured. The non-disclosure or misrepresentation, or the knowledge or conduct, of one insured is not imputed to another insured. Where the followed policy gives an insured greater protection than this paragraph, because it promises not to avoid the policy, not to reduce a claim, or not to impute one insured's knowledge or conduct to another, this policy gives the same protection to the same insured. The Follow-form Excess Layer clause says that this policy always follows those terms.
Cancellation
You may cancel this policy at any time by telling us. We refund the premium for the unexpired period of insurance on a pro-rata basis, less any non-refundable government charges.
We may cancel this policy only as the Insurance Contracts Act 1984 (Cth) allows, by giving you written notice as that Act requires. We refund the premium for the unexpired period on a pro-rata basis.
The cancellation or expiry of the followed policy does not by itself cancel this policy.
Sanctions
We do not provide cover, pay any claim or provide any benefit under this policy to the extent that doing so would expose us to any sanction, prohibition or restriction under:
- the Autonomous Sanctions Act 2011 (Cth), the Charter of the United Nations Act 1945 (Cth), or regulations made under either Act; or
- the trade or economic sanctions laws of the United Kingdom, the United States of America or the European Union, to the extent they apply to us.
[WP REVIEW: confirm that naming the UK, US and EU regimes is appropriate for Australian capacity; this is a deliberate library-wide scope choice.]
Governing Law
This policy is governed by the law of the state or territory of Australia shown in the schedule for this purpose. If none is shown, it is governed by the law that governs the followed policy at the start of the policy period.
Jurisdiction
You and we submit to the non-exclusive jurisdiction of the courts of the state or territory whose law governs this policy under the Governing Law condition, and the courts that hear appeals from those courts.
GST
Where we pay a loss, we will reduce the amount we pay by any input tax credit that you are entitled to claim for the loss. You must tell us your entitlement to input tax credits when you make a claim.
Several Liability
Where more than one insurer is named in the schedule, each insurer's liability is several and not joint, and is limited to its own share. An insurer is not responsible for the share of any other insurer.
Assignment
You may not assign this policy or any right under it without our written consent.
Headings and References
Headings are for convenience only and do not affect the meaning of this policy. A reference to an Act includes any regulation made under it and any amendment or replacement of it.
Disputes and Complaints
If you are unhappy with a decision, please contact us. We will follow our internal dispute resolution process and try to resolve the matter within 30 days.
If you are not satisfied, you can refer the matter to the Australian Financial Complaints Authority (AFCA): www.afca.org.au, info@afca.org.au, 1800 931 678. AFCA provides a free and independent dispute resolution service. Time limits may apply, and AFCA's rules decide whether it can hear a complaint about this policy.
Privacy
We collect, use and disclose your personal information in accordance with the Privacy Act 1988 (Cth) and the Australian Privacy Principles, to assess and administer this policy and claims under it. We may share it with the underlying insurers, reinsurers and our service providers for those purposes.
How to Make a Claim
Tell the insurer of the followed policy first, as the followed policy requires, and send us a copy. Tell us directly as soon as reasonably practicable when a loss is likely to reach this policy, as the Tell Us About Claims obligation sets out. Our contact details are in the schedule.
How Excess Layer Cover Works
This guide explains this policy. It does not change its terms.
An excess layer sits above other insurance. Each layer pays only after the layers below it have been paid in full. For example, where the followed policy has a limit of $5 million and this policy has a limit of liability of $10 million in excess of $5 million:
- for a loss of $8 million, the primary layer pays its full $5 million (less your primary excess, which you pay), and this policy pays $3 million;
- for a loss of $20 million, the primary layer pays $5 million, this policy pays $10 million, and the remaining $5 million is yours unless there is a further excess layer.
If the primary insurer agrees to settle for $4 million and you pay the other $1 million, the $5 million primary layer is treated as paid in full and this policy pays from that point.
If the primary insurer cannot pay, for example because it is insolvent, this policy does not move down to replace it unless your schedule shows a drop-down endorsement.
Endorsement Library
An endorsement applies only if its code is shown in the schedule. Each endorsement changes this policy only as it states, and is read together with the variables shown for it in the schedule. Where an endorsement and the rest of this policy conflict, the endorsement applies to the extent of the conflict. If a variable an endorsement needs is not shown in the schedule, the default stated in the endorsement applies; if it has no default, the endorsement does not apply until we show the variable in the schedule.
| Code | Endorsement | Effect |
|---|---|---|
| E01 | Difference in Conditions | Covers the specified differences between the followed policy and other underlying insurance |
| E02 | Reinstatement of the Limit of Liability | Reinstates the limit of liability once, for an additional premium |
| E03 | Drop-down for Underlying Aggregate Exhaustion | Moves the attachment point down when an aggregate underlying limit is reduced by paid loss |
| E04 | Defence Costs in Addition to the Limit | Pays defence costs in addition to the limit of liability where the followed policy pays them within its limit |
| E05 | Self-insured Retention | Allows a self-insured retention in place of underlying insurance for a specified cover |
| E06 | Multi-year Underlying | Fixes the underlying insurance for a multi-year followed policy |
| E07 | USA and Canada | Covers claims brought in the USA and Canada where the followed policy covers them |
| E08 | Specified Exclusion Changes | Changes specified exclusions of the followed policy for this layer only |
| E09 | Drop-down for Underlying Insurer Insolvency | Moves the attachment point down to replace an insolvent underlying insurer, to a sub-limit |
E01 Difference in Conditions
For the differences in cover specified in the schedule for this endorsement only, the Narrower Followed Policy clause does not apply, and this policy covers loss that the other underlying insurance named in the schedule covers but the followed policy does not.
For loss covered only because of this endorsement, the attachment point is reached when the underlying limit of the policy that covers the loss has been paid as the Attachment and Exhaustion clause provides, and we pay no more than the sub-limit shown for this endorsement, which is part of and not in addition to the limit of liability.
Schedule variables: the specified differences; the underlying policy that covers them; the sub-limit.
Questions
- Do you want this layer to cover differences between the followed policy and other underlying insurance?
qs.xol.endorsements.dic_requested
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.endorsements.dic_requested == true: Refer to the underwriter, with the endorsement pre-selected
Underwriter responses (on a referral or suggestion): Attach; Attach with premium loading; Do not attach
Reason shown on the quote and schedule: Referred because you asked for cover for differences between the followed policy and other underlying insurance.
E02 Reinstatement of the Limit of Liability
Once the limit of liability has been paid in full, it is reinstated once, for the rest of the policy period, for loss arising from claims first made, or losses first occurring, after the date of the reinstatement. The reinstated limit is not available for any claim or loss that the followed policy treats as related to a claim or loss that exhausted the original limit.
You must pay the reinstatement premium shown in the schedule, calculated as the schedule states. The Limit of Liability provision is read as allowing two limits of liability in total for the policy period.
Schedule variables: the reinstatement premium, as an amount or as a percentage of the annual premium, and whether it is pro rata as to time.
Questions
- Do you want the limit of liability reinstated once after it is exhausted?
qs.xol.endorsements.reinstatement_requested
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.endorsements.reinstatement_requested == true: Refer to the underwriter, with the endorsement pre-selected
Underwriter responses (on a referral or suggestion): Attach; Attach with premium loading; Do not attach
Reason shown on the quote and schedule: Referred because you asked for the limit of liability to be reinstated.
E03 Drop-down for Underlying Aggregate Exhaustion
Where an aggregate underlying limit is reduced or exhausted by payment of covered loss during the policy period, the attachment point is reduced by the amount of that payment, and the No Drop-down clause does not apply to that extent. Where the aggregate underlying limit is exhausted, this policy responds as the first layer of insurance for that cover, subject to the deductible or excess of the followed policy, which you bear.
The most we will pay for loss in the part of the tower that this endorsement brings into cover is the drop-down sub-limit shown in the schedule, which is part of and not in addition to the limit of liability. This endorsement does not apply to a reduction caused by loss paid before the start of the policy period, unless the schedule says so.
Schedule variables: the underlying policies to which it applies; the drop-down sub-limit; whether prior-period erosion counts.
Questions
- Do you want this layer to drop down when an aggregate underlying limit is reduced by paid loss?
qs.xol.endorsements.dropdown_aggregate_requested - Has any aggregate underlying limit been reduced by paid or reserved loss in the current period? If yes, by how much?
qs.xol.underlying.aggregate_eroded
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.endorsements.dropdown_aggregate_requested == true: Refer to the underwriter, with the endorsement pre-selected
Underwriter responses (on a referral or suggestion): Attach; Attach with amended sub-limit; Attach with premium loading; Do not attach
Reason shown on the quote and schedule: Referred because you asked for this layer to drop down when an aggregate underlying limit is reduced by paid loss.
E04 Defence Costs in Addition to the Limit
Where the followed policy pays defence costs within its limit, we will pay defence costs in addition to the limit of liability, in the proportion that our payment of loss bears to the total loss, up to the defence costs sub-limit shown in the schedule for this endorsement. If no sub-limit is shown, the sub-limit is equal to the limit of liability. The attachment point is still reached only as the Attachment and Exhaustion clause provides.
Schedule variables: the defence costs sub-limit.
Questions
- Does the followed policy pay defence costs within its limit or in addition to it?
qs.xol.underlying.defence_costs_basis
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.underlying.defence_costs_basis == 'within': Offer as a priced option
Underwriter responses (on a referral or suggestion): Attach; Attach with amended sub-limit; Attach with premium loading; Do not attach
Reason shown on the quote and schedule: Offered because the followed policy pays defence costs within its limit.
E05 Self-insured Retention
For the cover named in the schedule for this endorsement, there is no underlying insurance in the layer shown, and you retain that layer yourself as a self-insured retention. The self-insured retention counts towards the attachment point only when you have paid it in full, or it has been paid on your behalf, in loss that would have been covered by the followed policy. You must not insure the self-insured retention without our consent.
Schedule variables: the cover; the self-insured retention amount and layer; any aggregate for the retention.
Questions
- Will the insured retain any layer of the tower itself in place of underlying insurance?
qs.xol.endorsements.sir_requested
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.endorsements.sir_requested == true: Refer to the underwriter, with the endorsement pre-selected
Underwriter responses (on a referral or suggestion): Attach; Attach with premium loading; Do not attach; Decline risk
Reason shown on the quote and schedule: Referred because you asked to retain part of the tower yourself in place of underlying insurance.
E06 Multi-year Underlying
Where the followed policy has a period longer than the policy period, this policy follows the followed policy as it was at its own inception, as shown in the schedule, for the whole of the policy period. A single aggregate underlying limit that runs across more than one policy period of this policy is counted towards the attachment point in each policy period only for loss paid in that policy period, unless the E03 Drop-down for Underlying Aggregate Exhaustion endorsement applies.
Schedule variables: the followed policy's period and inception date.
Questions
- Is the followed policy written for a period longer than twelve months?
qs.xol.underlying.multi_year
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.underlying.multi_year == true: Suggest to the underwriter (quote not held)
Underwriter responses (on a referral or suggestion): Attach; Do not attach
Reason shown on the quote and schedule: Suggested because the followed policy has a period longer than twelve months.
E07 USA and Canada
Where the followed policy covers claims brought in the USA or Canada, or claims to enforce a judgment made there, this policy follows that cover, subject to the separate attachment point, if any, and the sub-limit shown in the schedule for this endorsement, which is part of and not in addition to the limit of liability. Without this endorsement, this policy does not cover any such claim.
Schedule variables: the USA and Canada attachment point, if different; the sub-limit.
Questions
- Does the insured have assets, operations, revenue or clients in the USA or Canada?
qs.xol.exposure.usa_canada
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.exposure.usa_canada == true: Refer to the underwriter, with the endorsement pre-selected
Underwriter responses (on a referral or suggestion): Attach; Attach with special excess; Attach with premium loading; Do not attach; Decline risk
Reason shown on the quote and schedule: Referred because you have exposure to claims brought in the USA or Canada.
E08 Specified Exclusion Changes
The exclusions of the followed policy named in the schedule for this endorsement apply to this policy as changed in the schedule, or do not apply, as the schedule states. A change made by this endorsement does not change the attachment point: a loss covered only because of it reaches the attachment point only if the underlying limits are paid by you or on your behalf as the Attachment and Exhaustion clause provides.
Schedule variables: each exclusion named; the change to it; any sub-limit.
Questions
- Do you want any exclusion of the followed policy changed for this layer?
qs.xol.endorsements.exclusion_changes_requested
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.endorsements.exclusion_changes_requested == true: Refer to the underwriter, with the endorsement pre-selected
Underwriter responses (on a referral or suggestion): Attach; Attach with premium loading; Do not attach
Reason shown on the quote and schedule: Referred because you asked for changes to the exclusions of the followed policy for this layer.
E09 Drop-down for Underlying Insurer Insolvency
Where an underlying insurer named in the schedule for this endorsement becomes subject to an insolvency event during the policy period and, solely because of that event, does not pay loss that its policy covers, we will treat its unpaid share of its underlying limit as paid for the purpose of the Attachment and Exhaustion clause, and pay that loss as if this policy attached at that point, up to the drop-down sub-limit shown in the schedule, which is part of and not in addition to the limit of liability.
An insolvency event means the appointment of a liquidator, provisional liquidator, administrator, judicial manager or receiver to the underlying insurer, or the underlying insurer becoming unable to pay its debts as they fall due, or the equivalent under the law of its place of incorporation.
Once we pay, we are subrogated to your rights against the underlying insurer and its estate, including under the Financial Claims Scheme, to the extent of our payment.
Schedule variables: the underlying insurers to which it applies; the drop-down sub-limit.
Questions
- Do you want this layer to replace an underlying insurer that becomes insolvent?
qs.xol.endorsements.dropdown_insolvency_requested - Is every underlying insurer authorised by APRA or a Lloyd's syndicate?
qs.xol.underlying.insurers_apra_authorised
Default rules (the first rule that matches applies; agencies may set their own actions and thresholds)
- When
qs.xol.endorsements.dropdown_insolvency_requested == true: Refer to the underwriter, with the endorsement pre-selected
Underwriter responses (on a referral or suggestion): Attach; Attach with amended sub-limit; Attach with premium loading; Do not attach
Reason shown on the quote and schedule: Referred because you asked for this layer to replace an underlying insurer that becomes insolvent.
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This wording is provided for general use and adaptation. Adopting agencies and their advisers are responsible for obtaining their own legal, regulatory, and reinsurance advice before use, and use of this wording requires the approval of the relevant capacity provider. Any Wording Partner review and sign-off letter issued in respect of this wording runs to Cuttleflow Pty Ltd t/a Cuttleflow Systems only and does not constitute legal advice to any adopting agency or insured.
Designed for the Australian market. Assumes application of the Insurance Contracts Act 1984 (Cth). Users are responsible for their own legal review, regulatory compliance, and reinsurance alignment.
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