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Design and Construction

Professional Indemnity

Insurance Policy

v12.15

Pen Underwriting Pty Ltd

ABN 89 113 929 516 AFSL 290518 Our name comes from the expression ‘to pass the pen’. It reflects what we do and what we bring to the insurance industry – specialist expertise and quality underwriting. We strive to exceed the expectations of brokers by providing professional and flexible solutions for their clients’ risks across a wide range of major and boutique general insurance products.

Contact Details:

Current as at December 2015

Level 9, 60 Edward St Brisbane Qld 4000

GPO Box 541 Brisbane Qld 4001

BRISBANE

P: +61 7 3056 1400 F: +61 7 3056 1477

Level 3, 333 Collins St Melbourne Vic 3000

PO Box 230 Collins St West Vic 8007

MELBOURNE

P: +61 3 9810 0600 F: +61 3 9810 0650

Level 19, 347 Kent St Sydney NSW 2000

GPO Box 4431 Sydney NSW 2001

SYDNEY

P: +61 2 9323 5000 F: +61 2 9323 5077

E: [email protected]

W: www.penunderwriting.com.au

Contents

Important Information 1

1. Insuring Clause 2

2. Automatic Extensions 2

3. Optional Extensions 4

4. Exclusions 4 5. Claims Conditions 6 6. General Conditions 7 7. Definitions 9

Design and Construction Professional Indemnity Insurance Policy v12.15 Page | 1

IMPORTANT INFORMATION This Policy

This Policy is an important document and should be kept in a safe place. Please read it carefully so that you understand the insurance provided.

Your duty of disclosure

Before you enter into an insurance contract, you have a duty to tell us anything that you know, or could reasonably be expected to know, may affect our decision to insure you and on what terms.

You have this duty until we agree to insure you.

You have the same duty before you renew, extend, vary or reinstate an insurance contract.

You do not need to tell us anything that:

reduces the risk we insure you for; or

is common knowledge; or

we know or should know as an insurer; or

we waive your duty to tell us about.

If you do not tell us something

If you do not tell us anything you are required to, we may cancel your contract or reduce the amount we will pay you if you make a claim, or both.

If your failure to tell us is fraudulent, we may refuse to pay a claim and treat the contract as if it never existed.

Claims Made Policy

This Policy is issued on a claims made and notified basis. This means that the Policy only covers the Insured for claims first made against the Insured during the Period of Insurance and notified to the insurer during the Period of Insurance. Section 40(3) of the Insurance Contracts Act 1984 may

provide additional rights at law. That section provides that where the insured gave notice in writing to the insurer of facts that might give rise to a claim against the insured as soon as was reasonably practicable after the insured became aware of those facts but during the period of insurance, the insurer is not relieved of liability under the contract in respect of the claim, when made, by reason only that it was made after the expiration of the period of insurance. Retroactive Date

This Policy does not provide cover in relation to the provision of the Professional Services or the conduct of the Professional Business prior to the Retroactive Date. Privacy

Pen Underwriting handles your personal information with care and in accordance with the Privacy Act 1988 and the Australian Privacy Principles. We collect personal information about you to provide you with insurance and insurance related services. We may disclose your personal information to third parties for the purposes described in our Privacy Policy, including related entities, insurers, reinsurers, agents and service providers, some of whom may be located in the United Kingdom and India. By asking us to provide you with insurance and insurance related services, you consent to the collection, use and disclosure (including overseas disclosure) of your personal information for the purposes described in our Privacy Policy. Where you provide personal information about others, you

represent to us that you have made them aware of that disclosure and of our Privacy Policy and that you have obtained their consent. If you do not consent to provide us with the personal information that we request, or withdraw your consent to the use and disclosure of your personal information at any stage, we may not be able to offer you the products or provide the services that you seek. For information about how to access and or correct the personal information we hold about you or if you have any concerns or complaints, ask us for a copy of our Privacy Policy or visit www.penunderwriting.com.au. Complaints Handling

If you are dissatisfied with a decision Pen Underwriting makes, our service, the service of others we appoint to discuss insurance matters with you, or a claim settlement, we have an internal dispute resolution process to assist you. For further information, ask for a copy of our Complaints and Disputes Resolution Policy or visit www.penunderwriting.com.au. Further Information

Your insurance broker has arranged this insurance on your behalf. If you have any questions or need further information concerning your insurance, you should contact your insurance broker to assist you with your enquiry. You should direct all of your correspondence to us through your insurance broker as he is your agent for this insurance.


In consideration of the payment of the Premium and in reliance on the contents of the Proposal, Underwriters will indemnify the Insured in accordance with the terms of this Policy.

1. INSURING CLAUSES

Legal Liability

1.1. Underwriters agree to indemnify the Insured for any sum which the Insured becomes legally liable to pay as a result of a Claim first made against the Insured and notified to Underwriters during the Period of Insurance and arising from any of the following in the provision of the Professional Services:

Acts, Errors and Omissions

(a) an act, error or omission of the Insured, including any breach of professional duty, confidentiality, trust or warranty of authority;

Contractual Liability

(b) contractual liability, provided that:

(i) such liability was assumed by the Insured in the normal course of the provision of Professional Services;

(ii) there is no indemnity for any liability assumed by an Insured by way of contract, warranty, guarantee or indemnity, unless such liability would have attached to the Insured in the absence of the contract, warranty, guarantee or indemnity; and

(iii) the indemnity available to the Insured will not be reduced by the mere fact that contributory negligence is not available as a defence;

Defamation

(c) unintentional defamation;

Dishonesty

(d) dishonest, fraudulent, criminal or malicious acts or omissions of any Insured, provided that:

(i) there is no indemnity for any Claim directly or indirectly based upon, attributable to, or in consequence of loss of money, negotiable instruments, stamps, bearer bonds or coupons, bank or currency notes, electronic funds, or records of electronic funds; and

(ii) there is no indemnity to any Insured who committed or condoned any such act or omission;

Intellectual Property Infringement

(e) unintentional infringement of intellectual property rights;

The Australian Consumer Law

(f) unintentional breaches of the The Australian Consumer Law or any corresponding legislation provided that there is no indemnity:

(i) under any criminal provisions of such legislation; or

(ii) when the Insured knowingly engages in such conduct or condones such conduct.

Costs Insuring Clause

1.2. Underwriters agree to pay the Costs incurred with the prior written consent of Underwriters in the investigation, defence or settlement of any Claim indemnified under Insuring Clause 1.1 Legal Liability.

Mitigation

1.3. Underwriters agree to pay on behalf of the Insured any reasonable costs necessarily incurred by the Insured during the Period of Insurance with the prior consent of Underwriters (such consent not to be unreasonably withheld) in respect of any measures taken by the Insured for the sole purpose of avoiding or mitigating a Claim or potential claim for which the Insured would otherwise, in the absence of such mitigation, be entitled to indemnity under Insuring Clauses 1.1(a) Acts, Errors or Omissions of the Insured, 1.1(b) Contractual Liability and or 1.1(f) The Australian Consumer Law.

2. AUTOMATIC EXTENSIONS

Underwriters agree to extend indemnity as stated in each of the Automatic Extensions, subject to all the terms of this Policy. The Automatic Extensions do not increase the Limit of Indemnity or the Aggregate Limit.

Consultants, Contractors and Agents

2.1. Underwriters agree to indemnify the Insured under the Insuring Clauses for the acts, errors or omissions of the Named Insured’s consultants, contractors and agents in the provision of the Professional Services.

Continuous Cover

2.2. Notwithstanding Exclusion 4.9(e) Known Claims and Circumstances, Underwriters agree to indemnify the Insured under the Insuring Clauses for any Claim first made against the Insured, or any notice of


Criminal Prosecution or Inquiry first received by the Insured during the Period of Insurance arising from facts, matters or circumstances of which the Insured was aware prior to the Period of Insurance provided that:

(a) Underwriters via Pen Underwriting were the Insured’s professional indemnity insurer at the time that the Insured first became aware of such facts, matters or circumstances and Underwriters via Pen Underwriting have continued without interruption to be the Insured’s professional indemnity insurer;

(b) There is an absence of fraudulent non-disclosure; and

(c) The Limit of Indemnity under this Automatic Extension shall be the lesser available under the terms of the Policy in force at the time that the Insured first became aware of the facts, matters or circumstances and this Policy. The terms of this Policy shall otherwise apply.

Criminal Prosecution Defence Costs

2.3. Underwriters agree to indemnify the Insured for Criminal Prosecution Defence Costs provided that: (a) notice of the Criminal Prosecution

is first received by the Insured and notified to Underwriters during the Period of Insurance;

(b) the circumstances giving rise to the Criminal Prosecution could otherwise give rise to a Claim for which indemnity would be available under this Policy;

(c) in Underwriters’ opinion, the defence of the Criminal Prosecution would assist in the defence of any Claim arising from such circumstances;

(d) Underwriters’ written consent is obtained prior to legal costs being incurred;

(e) Underwriters’ shall be entitled to nominate lawyers to represent the Insured; and

(f) Underwriters’ aggregate liability to indemnify the Insured under this Automatic Extension shall not exceed $100,000 in the aggregate for the Period of Insurance.

Inquiry Costs

2.4. Underwriters agree to indemnify the Insured for Inquiry Costs provided that: (a) notice of the Inquiry is first

received by the Insured and notified to Underwriters during the Period of Insurance;

(b) the Insured’s attendance is directly related to the Insured’s provision of Professional Services;

(c) Underwriters’ written consent is obtained prior to legal costs being incurred;

(d) Underwriters shall be entitled to nominate lawyers to represent the Insured; and

(e) Underwriters’ aggregate liability to indemnify the Insured under this Automatic Extension shall not exceed the Limit of Indemnity for the Period of Insurance.

Joint Venture Liability

2.5. Underwriters agree to indemnify the Insured under the Insuring Clauses for the Insured’s proportion of liability resulting from the Insured’s participation in any joint venture in the provision of Professional Services, provided that the Insured’s income from the joint venture has been declared to Underwriters and assessed for the purposes of calculating Premium.

Loss of Documents

2.6. Underwriters agree to indemnify the Insured against all costs and expenses reasonably incurred in replacing and or restoring lost or damaged Documents, provided that: (a) such loss or damage is sustained

during the Period of Insurance and notified to Underwriters during the Period of Insurance and within twenty-eight days of the loss or damage;

(b) at the time the loss or damage was sustained, the Documents were in the Insured’s physical custody or control in the course of the normal provision of Professional Services;

(c) there is no indemnity under this Automatic Extension for loss or damage caused by normal wear and tear or gradual deterioration;

(d) the costs and expenses shall be substantiated by invoices and accounts, which shall be subject to approval by Underwriters;

(e) Underwriters’ liability to indemnify the Insured under this Automatic Extension shall not exceed $500,000 in the aggregate for the Period of Insurance.

Run-Off Cover

2.7. Underwriters agree that, where the Named Insured is an entity and that entity ceases to exist or operate or is consolidated with, merged into or acquired by any other entity then the coverage provided to any Insured under


this Policy with respect to that entity shall continue until the expiry of the Period of Insurance but only in respect to Professional Services provided prior to the date that the entity ceased to exist, operate, or was consolidated with, merged into or acquired by any other entity.

3. OPTIONAL EXTENSIONS

Where an Optional Extension is stated as included in the Schedule, Underwriters agree to extend indemnity as stated in that Optional Extension, subject to all the terms of this Policy. The Optional Extensions do not increase the Limit of Indemnity or the Aggregate Limit.

Fidelity

3.1. Underwriters agree to indemnify the Insured against loss of money, negotiable instruments, bearer bonds or coupons, stamps, bank or currency notes belonging to the Named Insured or for which the Named Insured is legally liable in the provision of Professional Services, where such loss is sustained in consequence of any dishonest or fraudulent act or omission of any Insured, provided that: (a) such loss is first discovered by the

Insured during the Period of Insurance and is notified in writing to Underwriters within the Period of Insurance and within twenty-eight days of first discovery;

(b) there is no indemnity for any loss sustained after the date of the Insured’s first discovery of any loss or any such act or omission, or the date upon which the Insured had reasonable cause for suspicion of any loss or any such act or omission;

(c) there is no indemnity to any Insured who committed or condoned any such act or omission;

(d) the Insured shall, at its own cost and expense, provide such documentation and information as is reasonably necessary, in Underwriter’s opinion, to substantiate the existence of and amount of any such loss;

(e) the Excess shall apply to each and every individual dishonest or fraudulent act or omission; and

(f) Underwriters’ liability to indemnify the Insured under this Optional Extension shall not exceed the Fidelity Sub-Limit stated in the Schedule in the aggregate for the Period of Insurance.

Previous Business

3.2. Underwriters agree to extend indemnity under the Insuring Clauses to the Principals where the Claim arises from a Principal’s conduct of the Previous Business stated in the Schedule. For the purposes of this Automatic Extension only, the Retroactive Date shall be unlimited.

Reinstatement of the Limit of Indemnity

3.3. Underwriters agree to reinstate the Limit of Indemnity during the Period of Insurance provided that Underwriters’ total liability under this Policy shall not exceed: (a) in respect of any one Claim, the

Limit of Indemnity; and

(b) in respect of all Claims, the Aggregate Limit.

4. EXCLUSIONS

Underwriters shall not be liable under this Policy to provide indemnity in respect of any Claim, Costs, Criminal Prosecution Defence Costs, Inquiry Costs, costs, expenses or loss directly or indirectly based upon, attributable to, or in consequence of:

Asbestos

4.1. asbestos or any materials containing asbestos in whatever form or quantity.

Costs Estimates

4.2. any estimate of construction cost or any cost estimate being exceeded, except where such estimate has been completed by a suitably qualified and/or experienced quantity surveyor only.

Directors’ and Officers’ Liability

4.3. any Insured’s functions or duties as a director or officer of an incorporated entity.

Dishonesty and Fraud

4.4. any actual or alleged: (a) dishonest, fraudulent, criminal or

malicious act or omission of any Insured or their consultants, contractors or agents, unless covered by Insuring Clause 1.1(d) Dishonesty, Automatic Extension 2.3 Criminal Prosecution Defence Costs or, if stated in the Schedule as included, Optional Extension 3.1 Fidelity;

(b) wilful breach of any statute, contract or duty by any Insured or their consultants, contractors or agents; or

(c) conduct of any Insured or their consultants, contractors or agents with a reckless disregard for the consequences thereof.


Employer’s Liability

4.5. (a) death, bodily injury, mental injury, illness or disease of any Employee, or damage to or destruction of any property of any Employee, arising out of, or in the course of, their employment; or

(b) any breach of any obligation owed by an Insured as an employer to any Employee or applicant for employment, or any dispute in connection with employment.

Finance and Insurance

4.6. (a) any actual or alleged failure by the Insured to arrange, provide, effect or maintain any finance, bond, surety or insurance; or

(b) any actual or alleged advice provided by or on behalf of the Insured in respect to financial, accounting, taxation or insurance matters.

Fines and Penalties

4.7. punitive, aggravated, multiple or exemplary damages, or any fines or penalties, provided that this Exclusion shall not apply to penalties of a purely compensatory nature.

Insolvency

4.8. the insolvency, receivership, administration, bankruptcy or liquidation of any Insured.

Known Claims and Circumstances

4.9. (a) any Claim made against any Insured prior to the Period of Insurance;

(b) any Criminal Prosecution or Inquiry notice of which is received by the Insured prior to the Period of Insurance;

(c) any fact, matter or circumstance disclosed by any Insured to Underwriters prior to the inception of this Policy;

(d) any fact, matter or circumstance disclosed by any Insured to any prior insurer; or

(e) any fact, matter or circumstance of which any Insured was aware prior to the Period of Insurance and which the Insured knew, or ought reasonably to have known might give rise to a Claim or loss under this Policy.

Nuclear

4.10. nuclear incidents, nuclear material, or any radiation or contamination from any nuclear fuel, nuclear component or nuclear waste.

Owners’ & Occupiers’ Liability

4.11. (a) the ownership, leasing, use, maintenance or operation by or on

behalf of any Insured of any aircraft, watercraft, motor vehicle, or immobile property of any kind; or

(b) the ownership, management, control or occupation of any real property by or on behalf of any Insured.

Personal Injury

4.12. death, bodily injury, mental injury, sickness or disease, emotional distress or mental anguish of any person unless resulting directly from the Professional Services.

Pollution

4.13. any actual or alleged Pollution caused directly or indirectly by any act, error or omission of any Insured, provided that this Exclusion shall not apply where the Pollution is sudden, identifiable, unexpected and unintended and takes place in its entirety at a specific time and place and results directly from an act, error or omission of the Insured in the provision of the Professional Services. Underwriters’ aggregate liability to indemnify the Insured in respect of Pollution shall not exceed the Limit of Indemnity for the Period of Insurance.

Professional Fees, Profit and Trading Debts

4.14. (a) any fee, commission or disbursement charged, received or incurred by any Insured or any Claim to refund, account for, or pay damages calculated by reference to any such fee, commission or disbursement;

(b) any of the Insured’s own profit that may be included in the cost of rectifying any defects in work or Professional Services performed by or on behalf of the Insured; or

(c) any trading debt, loan, or personal debt of any Insured.

Products and Workmanship

4.15. (a) any actual or alleged defect in any good or product manufactured, supplied, sold, installed, assembled, constructed, erected, repaired, serviced, treated or maintained by or on behalf of any Insured, except where such defect arises directly from the provision of the Professional Services;

(b) any actual or alleged defective or inadequate workmanship or defective materials except where such defect or inadequacy arises directly from the provision of the Professional Services.

Property Damage

4.16. loss, damage or destruction of any real or personal property (other than Documents


covered under Automatic Extension 2.6 Loss of Documents) including loss of use thereof, or any consequential loss flowing from such loss, damage or destruction, unless resulting directly from the Professional Services.

Related Parties

4.17. any actual or alleged liability to any other Insured, any Family Member of any Insured, any Subsidiary, any parent company, or any firm, company or partnership in which any Insured has a financial or executive interest unless the Claim originally emanates from an independent and unrelated third party.

Retroactive Liability

4.18. the provision of the Professional Services prior to the Retroactive Date.

Toxic Mould

4.19. Toxic Mould.

USA and Canada

4.20. (a) any actual or alleged act, error or omission committed within the territorial limits of the United States of America or the Dominion of Canada or their territories or protectorates;

(b) any Claim brought in a court of law within the territorial limits of the United States of America or the Dominion of Canada or their territories or protectorates; or

(c) the enforcement of any judgment, order or award obtained within, or determined pursuant to the laws of the United States of America or the Dominion of Canada or their territories or protectorates.

War and Terrorism

4.21. (a) war, invasion, acts of foreign enemies, hostilities or warlike operations (whether war be declared or not), civil war, rebellion, revolution, insurrection, civil commotion assuming the proportions of or amounting to an uprising, military or usurped power;

(b) confiscation, nationalisation, requisition, or destruction of or damage to property by or under the order of any government or public or local authority; or

(c) Terrorism, or any action taken in controlling, preventing, suppressing, or in any way relating to Terrorism.

Sanctions

Underwriters shall not be deemed to provide cover and shall not be liable to pay any Claim or provide any benefit to the extent that the provision of such cover, payment of such Claim

or provision of such benefit would expose Underwriters to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, Commonwealth of Australia, United Kingdom or United States of America.

5. CLAIMS CONDITIONS

Claims Co-operation

5.1. (a) Each Insured shall diligently do, and allow to be done, everything reasonably practicable to avoid or diminish any liability in respect of a potential Claim, a Claim, or any loss, costs or expense otherwise indemnified by this Policy.

(b) Each Insured shall, at their own expense, immediately give to Underwriters all assistance and information which Underwriters reasonably require to investigate and defend a Claim or loss, costs or expense under this Policy and to enable Underwriters to ascertain their liability under this Policy.

Claims Reporting

5.2. In the event of a Claim arising under this Policy, the Insured shall give immediate notice of the Claim during the Period of Insurance in which the Claim is made. Notice of any Claim shall be given in writing to Pen Underwriting at the address stated in the Schedule.

Investigation, Defence and Settlement

5.3. (a) The Insured agrees not to settle any Claim, incur any Costs, costs or expense, make any admission, offer or payment or otherwise assume any contractual obligation with respect to any Claim or loss, Costs, costs or expense without Underwriters’ prior written consent, which consent shall not be unreasonably withheld. Underwriters shall not be liable for any settlement, Costs, costs or expense, admission, offer or payment, or assumed obligation to which Underwriters have not first consented in writing.

(b) Underwriters shall be entitled at any time to take over and conduct, in the name of the Insured, the defence or settlement of any Claim, and Underwriters shall have full discretion in the conduct of any such proceedings and in the settlement of any such Claim.

(c) Underwriters may allow or instruct the Insured to conduct the defence of the Claim, if Underwriters believe the Claim will


not exceed the Excess. In this event, the Insured will be required to provide Underwriters with regular progress reports and Underwriters reserve the right to take over conduct of the defence or settlement of any such Claim at any time.

(d) Lawyers retained by Underwriters to conduct the investigation, defence or settlement of any Claim on behalf of the Insured and Underwriters may also provide advice solely to Underwriters regarding their liability to indemnify the Insured. All communications between Pen Underwriting, Underwriters and the lawyers in regard to the Insured’s entitlement to indemnity are privileged as between the lawyers, Pen Underwriting and Underwriters. The lawyers are free to disclose to Pen Underwriting and Underwriters any information obtained while acting on behalf of the Insured and the Insured agrees to waive any legal professional privilege as between the Insured, the lawyers, Pen Underwriting and Underwriters. If any actual or apparent conflict arises between the interests of Underwriters and the Insured’s interests, the lawyers retained by Underwriters may cease acting on behalf of the Insured and may continue to act on behalf of Underwriters in relation to any dispute between Underwriters and the Insured with respect to the Insured’s entitlement to indemnity under this Policy.

Multiple Claims

5.4. All Claims, together with all claims by the Insured for indemnity under this Policy under Insuring Clause 1.3 Mitigation, Automatic Extension 2.3 Criminal Prosecution Defence Costs, Automatic Extension 2.4 Inquiry Costs and Automatic Extension 2.6 Loss of Documents, which arise from a single act, error or omission, or which arise from causally connected or interrelated acts, errors or omissions shall be regarded as one claim under this Policy, and the Limit of Indemnity (and any applicable sub-limits) and the Excess shall apply accordingly. Where more than one Excess applies, the highest applicable amount of Excess shall be payable by the Insured. Provided that this Claim Condition does not apply to Optional Extension 3.1 Fidelity.

Right to Contest

5.5. In the event that Underwriters recommend a settlement in respect of any Claim and the Insured does not agree to that recommendation and decides to contest the Claim, then Underwriters’ liability in respect to such Claim shall be limited to the amount of the recommended settlement plus Costs, less the Excess, up to the time of the Insured’s decision to contest the Claim.

Senior Counsel

5.6. Underwriters shall not require the Insured to contest any Claim unless a Senior Counsel, to be appointed by mutual agreement of the Insured and Underwriters and as part of the Costs, advises that the Claim should be contested having regard to the economics of the matter and the prospects of successfully defending the Claim.

Subrogation

5.7. In respect of any payment made under this Policy, Underwriters become entitled to any rights the Insured may have against any party. The Insured must assist Underwriters and provide such information and execute all documents, including giving evidence at any civil trial and providing signed statements, as is reasonably required to enable Underwriters to exercise such rights of subrogation.

6. GENERAL CONDITIONS

Alteration to Risk

6.1. The Insured shall give to Underwriters written notice as soon as practicable and within thirty days of any material alteration to the risk during the Period of Insurance, including but not limited to:

(a) any material change in the nature of the Professional Services;

(b) the appointment of an administrator, receiver, or liquidator to any Insured, any act of insolvency of any Insured, or the bankruptcy of any Insured; or

(c) the cancellation, suspension or termination of any Insured’s license, registration or membership of any professional association which is relevant to the provision of the Professional Services.

Cancellation

6.2. (a) Underwriters may cancel this Policy at their discretion in accordance with the provisions of


the Insurance Contracts Act 1984. In the event of cancellation, Underwriters will allow a refund of Premium calculated in accordance with Pen Underwriting’ short term cancellation rates for the unexpired Period of Insurance.

(b) The Insured may cancel this Policy at any time in writing to Pen Underwriting at the address shown on this Policy. In the event of cancellation, Underwriters will allow a refund of Premium calculated in accordance with Pen Underwriting’s short term cancellation rates for the unexpired Period of Insurance.

(c) Pen Underwriting’s fee is deemed earned upon inception of this Policy and is non-refundable.

Excess

6.3. (a) The Insured is liable for the amount of the Excess in respect of each Claim, each claim for indemnity under Insuring Clause 1.3 Mitigation, each claim for indemnity in respect of Criminal Prosecution, Inquiry, and in respect of each and every loss under Automatic Extension 2.6 Loss of Documents, subject to the operation of Claims Condition 5.4 Multiple Claims. If Optional Extension 3.1 Fidelity is stated in the Schedule as included, the Insured is liable for the amount of the Excess in respect of each and every individual dishonest or fraudulent act or omission.

(b) Where the Excess is stated in the Schedule as costs inclusive, the Excess shall also apply to Costs, but not collectively exceeding the amount of the Excess. The amount of the Excess is net of any GST payable in respect of Costs.

(c) Underwriters shall only be liable to indemnify the Insured for amounts payable above the Excess.

(d) Any legal costs and expenses incurred by Underwriters to determine whether Underwriters have a liability to indemnify the Insured under this Policy shall be borne by Underwriters and shall not be subject to the Excess.

GST

6.4. (a) The Premium includes an amount for GST.

(b) Underwriters’ liability to indemnify the Insured under this Policy is calculated less any Input Tax Credit to which the Insured is

entitled for any relevant Acquisition, or to which the Insured would have been entitled had it made a relevant Acquisition. The Insured must inform Underwriters of the extent to which it is entitled to an Input Tax Credit for that GST amount each time that it notifies a Claim under this Policy, and any GST liability arising from the Insured’s provision of incorrect advice is payable by the Insured.

Governing Law

6.5. This Policy will be construed in accordance with the laws of Australia. Any disputes relating to interpretation will be submitted to the exclusive jurisdiction of the Courts of Australia.

Limit of Indemnity

6.6. (a) Underwriters’ total liability under this Policy in respect of any one Claim shall not exceed the Limit of Indemnity, and in respect of all Claims shall not exceed the Aggregate Limit. Amounts payable by Underwriters under Insuring Clause 1.3 Mitigation shall not exceed the Limit of Indemnity. Amounts payable by Underwriters for Criminal Prosecution Defence Costs, Inquiry Costs, costs and expenses and loss under Automatic Extension 2.5 Loss of Documents and, if stated in the Schedule as included, Optional Extension 3.1 Fidelity, form part of the Limit of Indemnity and are subject to the aggregate liability limits for the Period of Insurance as set out in the relevant Extension.

(b) Where the Limit of Indemnity is stated in the Schedule to be costs exclusive, Underwriters agree to pay Costs in addition to the Limit of Indemnity, provided that if an amount is required to dispose of a Claim which is in excess of the Limit of Indemnity, Underwriters’ liability for Costs shall be limited to the proportion that the Limit of Indemnity bears to the amount required to dispose of the Claim.

Non-imputation and Severability

6.7. Underwriters agree that, where this Policy insures more than one Named Insured, any conduct on the part of any Principal or Employee of a Named Insured, whereby such person failed to comply with their duty of disclosure under the Insurance Contracts Act 1984, or made a misrepresentation to Underwriters before this contract of


insurance was entered into, shall not prejudice the right of any other Named Insured, or Principal or Employee of any other Named Insured, to indemnity under this Policy, provided that:

(a) such other Named Insured, Principal and Employee of such other Named Insured shall be entirely innocent of and have no prior knowledge of such conduct;

(b) such other Named Insured, Principal and Employee of such other Named Insured shall, as soon as is reasonably practicable upon becoming aware of any such conduct, advise Underwriters in writing of all known facts in relation to such conduct; and

(c) enquiry was made, before this contract of insurance was entered into, of each Insured for the purposes of complying with the duty of disclosure under the Insurance Contracts Act 1984. This provision is not intended in any way to limit the duty of disclosure owed by each Insured.

Payment of Premium

6.8. Indemnity under this Policy is in consideration of the payment of the Premium. The Premium shall be paid within forty-five days of inception of this Policy.

Policy Interpretation

6.9. (a) Paragraph titles in this Policy are for descriptive purposes only and do not form part of this Policy for the purposes of its construction or interpretation

(b) In this Policy, the singular includes the plural and vice versa.

7. DEFINITIONS

7.1. “Aggregate Limit” means the amount stated as the Aggregate Limit in the Schedule. Where no Aggregate Limit is stated, the Aggregate Limit is the Limit of Indemnity.

7.2. “Claim” means: (a) the receipt by the Insured of any

written demand for compensation made by a third party against the Insured;

(b) any writ, summons, application, statement of claim or other form of legal or arbitral process served upon the Insured containing a demand for compensation made by a third party against the Insured.

7.3. “Costs” means the reasonable legal costs and other expenses incurred by or on

behalf of the Insured or by Underwriters in the investigation, defence or settlement of a Claim.

7.4. “Criminal Prosecution” means criminal proceedings brought against the Insured in respect to an alleged breach of any construction industry statutory regulation in the provision of the Professional Services, but does not mean any criminal proceedings in connection with a failure by any Insured to be properly licensed, registered or accredited to conduct its business of building, construction, installation or engineering contractors or to perform the Professional Services.

7.5. “Criminal Prosecution Defence Costs” means all legal costs reasonably incurred in connection with the Insured’s representation at a Criminal Prosecution.

7.6. “Documents” means deeds, wills, agreements, maps, plans, books, letters, policies, certificates, forms and documents of any nature whatsoever, whether written, printed or reproduced by any method including computer records and electronic data material but shall not include bearer bonds or coupons, stamps, bank or currency notes or any other negotiable instrument.

7.7. “Employee” means any person employed by the Named Insured under a contract of service, traineeship or apprenticeship.

7.8. “Excess” means the amount payable by the Insured stated as the Excess in the Schedule.

7.9. “Family Member” means: (a) any spouse or domestic partner;

(b) any sibling or child;

(c) any parent, or parent of any spouse or domestic partner,

of any Insured.

7.10. “GST”, “Input Tax Credit” and “Acquisition” have the meaning given to those words in A New Tax System (Goods and Services Tax) Act 1999.

7.11. “Insured” means: (a) the Named Insured;

(b) Principals and Employees of the Named Insured during the Period of Insurance;

(c) former Principals and Employees of the Named Insured but only in respect to work performed while a Principal or Employee of the Named Insured;

(d) estates and legal representatives of any Insured;

(e) Subsidiaries newly incorporated or acquired by the Named Insured and practising in the same


professional discipline as the Professional Services, for a maximum period of thirty days from the date of incorporation or acquisition. The retroactive date applicable for such Subsidiaries is the date of incorporation or acquisition; or

(f) entities, merged with or acquired by the Insured and practising in the same professional discipline as the Professional Services, for a maximum period of thirty days from the date of merger or acquisition. The retroactive date applicable for such entities is the date of merger or acquisition.

7.12. “Inquiry” means an inquiry, investigation, examination, or other proceeding relating to the Professional Services where the findings from such inquiry, investigation, examination or other proceeding could lead to a Claim being made against an Insured which may be indemnified under this Policy.

7.13. “Inquiry Costs” means all legal costs reasonably incurred in connection with the Insured’s attendance at an Inquiry.

7.14. “Limit of Indemnity” means the amount stated in the Schedule as the Limit of Indemnity.

7.15. “Named Insured” means the person, partnership or entity stated as the Named Insured in the Schedule.

7.16. “Pen Underwriting” means Pen Underwriting Pty Ltd ABN 89 113 929 516 AFSL 290518.

7.17. “Period of Insurance” means the Period of Insurance stated in the Schedule or, in the event of Policy cancellation, the period from inception to the effective date of cancellation of this Policy.

7.18. “Policy” means this policy wording, the Schedule, any endorsements attaching to this policy wording, and the Proposal.

7.19. “Pollutants” means any solid, liquid, gaseous or thermal irritant or contaminant, including but not limited to smoke, vapour, soot, fumes, acids, alkalis, chemicals, or any waste materials, recycled, reconditioned or reclaimed materials, or any other air emission, odour, waste water, oil, oil products, infectious or medical waste, or any noise or air emission.

7.20. “Pollution” means the discharge, dispersal, release, seepage, migration or escape of Pollutants into or upon land, the atmosphere, or any water course or body of water.

7.21. “Premium” means the amount stated as Premium in the Schedule and in any endorsement to this Policy.

7.22. “Principal” means where the Named Insured is an individual, that individual, where the Named Insured is a firm, a partner of that firm, or where the Named Insured is a company, a director of that company.

7.23. “Professional Services” means one or more of the following services provided by or on behalf of the Named Insured as part of or incidental to the Named Insured’s business as building, construction, installation or engineering contractors, and which services and business the Insured is licensed and or registered to provide and conduct where licensing or registration is required by law:

(a) advice in relation to design or specification;

(b) design; (c) drafting; (d) feasibility studies; (e) inspection; (f) measurement, testing and/or

certification of materials; (g) programming and time flow

management; (h) project management or

construction management for a specified fee;

(i) quality and/or loss control; (j) quantity surveying; (k) specification; (l) surveying; (m) technical calculation; (n) testing and/or commissioning; (o) training in respect of (a) to (n)

above; and (p) the duty to warn of defects in the

professional services of others,

provided that the service is performed by or under the direct supervision of a properly registered engineer, architect or surveyor, a properly qualified quantity surveyor, or any other person providing a professional service of a skilful character according to an established discipline.

Professional Services do not include the day to day supervision of manual operatives or labour and physical building, construction or installation work usually undertaken by building, construction, installation or engineering contractors.

7.24. “Proposal” means the written proposal made by the Insured to Underwriters in application for this insurance, which has been relied upon by Underwriters to determine whether to provide this Policy and on what terms.


7.25. “Retroactive Date” means the Retroactive Date stated in the Schedule.

7.26. “Schedule” means the Certificate of Insurance and Schedule to this Policy signed and issued by Pen Underwriting or Underwriters.

7.27. “Senior Counsel” means a practising barrister who is entitled to use the post-nominals QC or SC.

7.28. “Subsidiary” means any entity over which the Named Insured is in a position to exercise effective direction or control through ownership or control of more than fifty percent of the issued voting shares of that entity, or any entity deemed at law to be a subsidiary of the Named Insured.

7.29. “Terrorism” means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group of persons, whether acting alone or on behalf of or in connection with any organisation or government, which from its nature or context is committed for or in connection with political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public in fear.

7.30. “Toxic Mould” means fungus, mould, mildew, yeast, spores, or any toxins, substance, vapour, gas, or other emission produced by or emanating from fungus, mould, mildew, yeast or spores.

7.31. “Underwriters” means certain Underwriters at Lloyd’s and insurers participating in this Policy.