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ONTARIO INSURANCE COMPANY

UNDERWRITING GUIDELINES

TABLE OF CONTENTS

General Information

PERSONAL LINES

New Business Applications DepositPhotos Payment PlansAdditional Service Fees Policy Cancellation Broker of Record Claim Reporting Inspection & Audit Agents Responsibility

Page G 1G 1G 1G 1G 2G 2G 2G 2G 2G 3

Ineligible Risks orRisks Which May Not Be Bound

Property Exposures Liability Exposures Miscellaneous

P 1P 1-2P 2

Homeowner Program General Guidelines/Eligibility Bed & Breakfast Program Farm ExposuresSeasonal DwellingsDouble-wide Manufactured Homes ML-3Tenants & Condominiums Replacement Cost –Coverage A ACV- Coverage AMarket Value –Comparable Value Endorsement ML- 16Minimum/ Maximum Coverage

P 3P 3P 3P 3P 4P 4P 4P 4P 4P 5

P 5

Manufactured Home Program General Guidelines/Eligibility P 6

Farmowner Program General Guidelines/Eligibility Bed & BreakfastAdditional Farm Dwellings Barns and Other Structures Farm Personal Property Maximum Binding Authority

P 7P 7P 7P 7P 8P 8

Farm Property Fire Policy P 8

7/05 i



TABLE OF CONTENTS

PERSONAL LINES (continued) Page

Owner Occupied Dwelling Fire General Guidelines/Eligibility P 9Maximum Binding Authority P 9

Non-Owner Occupied Dwelling Fire

Rental Property (1-4 Family)

General Guidelines/Eligibility P 10Property Considerations P 10-11

Liability Considerations P 11Maximum Binding Authority P 12Minimum Coverage A P 12Replacement Cost-Coverage A P 12

Inland Marine Boat (Supplemental to HO, FO,MHO)

Ineligibility P 13Underwriting Considerations P 14

Boatowners Program(Stand Alone)

Ineligibility P 15Underwriting Considerations P 16

Inland Marine

Landlord Package Policy

Personal Lines-General

General Guidelines Maximum Binding Authority Minimum CoverageReplacement Cost Valuation-Coverage A

P 17-18

P 19-20

P 21

5/14 ii



TABLE OF CONTENTS

COMMERCIAL LINES Page

General Information New Business Applications DepositPhotos Payment PlansAdditional Service Fees Policy Cancellation Broker of Record Claim Reporting Inspection & Audit Agents Responsibility

G 1G 1G 1G 1G 2G 2G 2G 2G 2G 3

Ineligible Risks orRisks Which May Not Be Bound

Property Exposures Liability Exposures

C 1C 1

Coverage or TypeBusinesses, Classes, Products or Structures Miscellaneous

C 2C 2-3C 3

Additional Insured Guidelines (All Commercial Risks) Certificates of Insurance

C 4C 4

Inland Marine Commercial Lines-General C 5

Rental Property-Habitational(5-20 Units)

General Guidelines /Eligibility Property Considerations Liability Considerations Maximum Binding Authority Minimum Coverage A Replacement Cost-Coverage A

C 6C 7C 7C 8C 8C 8

Craftsman 12/Pak General Guidelines/Eligibility C 9

Food Service General Guidelines/Eligibility C 10

Home Based Business General Guidelines/Eligibility C 11

Liquor Liability Binding Authority Ineligible Risks Limits

C 12C 12C 12

7/05 iii


STANDARD PROCEDURES FOR ALL POLICIES

New Business Applications Applications must be complete, signed by the insured and agent and sent to OIC within 3

business days of effective date or binding date, whichever is earlier. If a Binder or Certificate is issued, a copy must be sent to OIC the same day. (Completed

application, deposit and photos must follow within 3 business days). Application must be complete in every respect and signed by agent & applicant to be

considered eligible to be bound for processing. Any special credits must have properly completed/signed Certification of Policy Credits Form

accompanying the application for credit to be given. An Auxiliary Heating Device Supplement (Woodstove) must accompany all risks with

woodstoves. Deposit required with each new submission (Appropriate Pay Plan deposit or $100 minimum). Agent must have seen all risks with building or structure coverage prior to binding. Photos (2) required for all structures insured ($3.00 reimbursement for photos of

underwriting quality). Photos (2) must show all 4 sides of any structures insured and be taken within 100 ft. of the structure.

Mailing of application should not be held up for development of photos. Indicate “photos to follow” on application to avoid unnecessary letters or calls.

A diagram showing the buildings and distance between them is required on all risks insuring more than one building at a single location (needed for reinsurance underwriting purposes).

Farm risks require 2 photos of each barn showing all sides along with complete & accurate diagrams.

An existing policy cannot be assigned to a different named insured. Policy must be cancelled and rewritten.

Payment Plans

Full Annual Premium Payment (1 payment) - Due as of effective date of policy

Semi Annual Premium Payment (2 payments) -Available on policies with minimum annual premium of $200. Deposit - 50% of Annual Premium + $6 Service Fee + NYS Fire Fee (if applicable) due by effective date. Balance - 50% due 5 months after effective date of policy + $6 Service Fee.

Trinary Payment (3 payments) Available on policies with minimum annual premium of $350. Deposit – 40% of Annual Premium +$6 Service Fee + NYS Fire Fee (if applicable) due by effective date. 3 Months & 6 Months after effective date of policy (Each 30% due + $6 Service Fee).

Bi-Monthly (4 payments) - Available on policies with minimum annual premium of $400. Deposit - 25% of Annual Premium + $6 Service Fee + NYS Fire Fee (if applicable) due by effective date. 2 Months, 4 Months & 6 Months after effective date of policy (Each 25% due + $6 Service Fee).

Bi-Monthly (5 payments) - Available on policies with minimum annual premium of $600. Deposit - 28% of Annual Premium + $6 Service Fee + NYS Fire Fee (if applicable) due by effective date. 2 Months, 4 Months, 6 Months & 8 Months after effective date of policy (Each 18% due + $6 Service Fee)

Monthly Payments (12 payments) –Available ONLY for ACH direct debit OR recurring credit/debit card payments Twelve equal monthly payments (8.33% of annual premium + $3 Service Fee + NYS Fire Fee (if applicable) NOTE: For 12 pay plan using debit/credit, insured must sign up for recurring payments. Please visit our

website at www.ontarioinsco.com – Click on “Make a Payment” and follow the prompts at Xpress-Pay.com

7/15 G-1

http://www.ontarioinsco.com/


STANDARD PROCEDURES FOR ALL POLICIES (continued)

Additional Service Fees

Returned check or deposited item, redeposit of check/item ($25 Fee) Notice of Cancellation for Non Payment of Premium ($15 Fee)

Cancellation applies when timely payment due is not received by the Invoice Due Date and Notice of Cancellation for Non Payment of Premium is issued.

Reinstatement of Cancelled Policy ($30 Fee) Applies when payment is received after the effective date of cancellation and Company agrees

to reinstate with a gap in coverage.

Policy Cancellations

Cancellation of a policy requires return of the policy with written cancellation instructions or Lost Policy Release signed by each named insured(s). Cancellation date can be no more than 30 days prior to the date a request is received in our office.

Broker of Record

Change of Broker requests must be signed by new agent and insured and currently dated. Acknowledgement of request for Change of Broker will be sent to existing agent allowing 7

calendar days for receipt of a countermanding order. Requests received during the policy term shall not be made effective until the following

anniversary/renewal date. Any exception to this will require a new application/effective date and cancellation of the old policy.

The Company shall not be responsible for late or delayed requests in following the above procedures.

Claim Reporting Procedures

All claims should be reported the same day that you are made aware of the loss. Do not hold up the notice of loss pending estimates from the insured. A written notice of loss (ACORD form) should be immediately sent to the Company even

if it has also been reported by telephone. The Notice of Loss should be completely filled out, including phone numbers, where and how to contact insured, occupation, social security #, previous addresses if new to address (< 3 years), probable amount of loss, police department notified (theft), responding fire department, cause of loss, specific location of where loss occurred.

Medical or Liability claims – Include the following: Name/address/telephone of claimant Name/address of hospital Name/address/telephone of physician Parents names/address/telephone if a minor

Inspections & Audit

OIC will use employees or outside representatives to conduct underwriting, risk management, audit and claim inspections and investigations. From time-to-time, we may also send various questionnaires or self- audit forms directly to the insured. We will advise you of any development, which may require any action or change to the policy. If a self-audit form is not returned to the Company by the due date requested, we reserve the right to automatically increase the payroll and/or receipts by 10% on the renewal.

7/15 G-2

ONTARIO INSURANCE COMPANYAGENTS UNDERWRITING RESPONSIBILITY

The underwriting of a risk begins with you, our Agent. You are responsible for the initial evaluation of the risk. Though you are not expected to deal with all of the aspects of underwriting, you should satisfy yourself that each risk you solicit meets requirements in the following:

Moral Character

The greatest single factor to be considered in risk selection is the character of the prospective insured. Is he a responsible individual? Does he meet his obligations? What is his reputation? Does he do business safely, carefully and take pride in the quality of his work? Responsibility is a principle condition of insurance. If, after investigating and considering the following, you find you do not have confidence in the moral responsibility of the individual, the risk should be avoided:

Management attitude Management reputation for honesty and integrity Financial condition Type and class of business Loss or accident record

Physical Characteristics of Building and Equipment

While the age of the buildings and equipment is important, the condition and maintenance of the buildings, equipment and premises is more indicative of the general character of the risk. In addition, the location of the building, particularly in a deteriorating area, may indicate a questionable risk. The housekeeping of the risk may be an indicator of the entire operation, attitude of the insured and the likelihood of potential claims.

Operations

Are the principals experienced in the operation? Are the employees well trained? Do the principals believe in safety and practice accident prevention throughout the operation? Is there evidence of safety practices in the form of physical safeguards? Are safety rules in writing, posted and enforced?

Insurance History

Unfavorable insurance history as indicated by prior cancellations,, non-renewal and/or poor loss experience does not conclusively indicate that a risk cannot be written. However, it is strong evidence that a very thorough investigation must be made before the coverage can be written.

Successful underwriting is based on good teamwork… with Agent and the Company Underwriter working as a team. The Agent’s team assignment is to handle the first phase of the selection process through exercise of good Agent Underwriting in the areas of Moral Character, Physical Characteristics, Operations and Insurance History. The Agent needs to provide the Company underwriter with the results of Agent Underwriting which should include any additional information which will help carry out the assignment.

We need to recognize that the primary responsibility of the Agent is to efficiently handle the insurance needs of the individual insured. The primary responsibility of the Company is to provide insurance using underwriting practices in risk selection, acceptance and pricing which are fair to its collective policyholder base as well as the preservation of the Company’s financial strength and stability.

2/02 G-3

ONTARIO INSURANCE COMPANYAGENTS UNDERWRITING

GUIDELINES

Ineligible Risksor

Risks Which May Not Be Bound

(Personal Lines & Farmowner Policies)

Property Exposures

Vacant, unoccupied or under renovation/restoration/rehabilitation. May be submitted for consideration if seen by agent along with photographs. Coverage and limits may be restricted.

Property under foreclosure. For sale more than 12 months. Policy in the name of a mortgagee, or interest other than the owner/occupant. More than two (2) mortgagees on property. Unsatisfactory financial condition, reputation or attitude of insured. Cancelled, non-renewed or refused coverage by any company within past 3 years. Cancelled for non-payment by any company within past 12 months or a history of late payments. No prior insurance in effect More than one loss in past 3 years. Any loss $10,000 or greater in past 5 years. Remote locations or not easily accessible to emergency vehicles year-round. Risks not meeting building or municipal codes in all respects. Structures which appear to be in below-average condition and/or inadequately constructed. Below-average housekeeping, maintenance or upkeep of premises, structures or equipment. Residential property without central heating. Dwellings in which central heating system is not the main heat source. Property with space heater, evidence of kerosene or similar type heating. Auxiliary Heating Devices using solid fuels not professionally installed and/or not approved by

local building inspector or unsatisfactory Auxiliary Heating Devices (Woodstove) Questionnaire information.

Manufactured Homes with Auxiliary Heating Devices not installed by the manufacturer. Electrical Service of less than 100 AMP service. Inadequate roof, electrical, plumbing or heating system. Adjacent exposures increasing the hazard (Vacant buildings, high crime or vandalism, brush or

debris, flammable storage material or operations, etc.). Evidence of mold or conditions conducive to mold development.

Liability Exposures

Any liability claim/reserve of $10,000 or more in past 5 years. Any liability claim in past 3 years. Junk, clutter, debris or attractive nuisance on premises. Saddle animals exceeding three (3). No boarding, public exposure or lessons are permitted. Exotic, unusual or wild animals with aggressive potential (Lion, bobcat, coyote, wolf, et al).

7/05 P-1


AGENTS UNDERWRITING GUIDELINES

Ineligible Risksor

Risks Which May Not Be Bound (continued)

(Personal Lines & Farmowner Policies)

Liability Exposures (continued)

Certain dog breeds (Akita, Chow, Doberman, German Shepherds, Presa Canarios, Rottweiler, Certain Terriers {all “bull” & “staffordshire” breeds}, or a mixed breed thereof including any animal with a history or display of aggressive behavior.

Unfenced inground-swimming pools or aboveground pools not meeting local codes or ordinances. Trampolines that are not fenced and/or supervised by an adult during use. Day Care exceeding four (4) persons. No hazardous exposures permitted (aggressive animals,

horses, swimming facilities, clutter etc.). Sidewalks, driveways and steps that are in need of repair, not in good condition or not properly

maintained in all types of weather. Stairsteps without proper railings or banisters. Underground storage tanks (not septic tanks). Evidence of pollution or prior pollution claim.

Risks or exposures listed above may be considered for coverage on a non-binding basis. A completed application with full particulars should be referred to a Company underwriter along with the agent’s recommendations and photographs.

Risks that are ineligible to be bound as listed above or elsewhere in the Underwriting Guidelines will not be considered bound by Ontario Insurance unless prior written approval has been obtained by an Underwriter. Risks determined to be ineligible will be subject to being cancelled or voided. Agents are reminded that their binding authority is limited to the Underwriting Guidelines as permitted under the Agency-Company Agreement or Brokerage Agreement in force for the agency.

Inspections & Audit OIC will use employees or outside representatives to conduct underwriting, risk management, audit and claim inspections and investigations. From time-to-time, we may also send various questionnaires or self- audit forms directly to the insured. We will advise you of any development, which may require any action or change to the policy.

Miscellaneous All coverage, options and limits displayed in the URB rating manuals may not be acceptable or

available from the Company. Refer to Company if any question on availability. Minimum “developed” premium for Personal Lines policies (except ML-4) must be at least $100. Stand-alone IM policies or contents policies for personal lines are not acceptable, other than a tenants

homeowner (ML-4). Rating manuals for each line or policy type may have Minimum Retained Premiums in the event of

cancellation. Liability only policies are not acceptable.

7/05 P-2



HOMEOWNER PROGRAM

GENERAL GUIDELINES

Also refer to Section “Ineligible Risks or Risks Which May Not Be Bound”.

1-2 & 3-4 family owner-occupied dwellings are eligible .

Dwellings under construction may be written on a HO policy provided the construction is being done by professional builders with a contract to complete within 90 days of the effective date of the policy. Copy of the contract must be provided to OIC with application. A Certificate of Occupancy must be provided prior to occupancy and the occupancy must be completed within 90 days of the effective date of the policy.

Bed & Breakfast facilities up to 5 rooms (units) may be written, if owner-occupied. Breakfast only served Smoke detectors in each room required Liquor liability exclusion endorsement required No swimming facilities No horseback riding Base premiums receive 10 % credit. Mandatory liability charge under Incidental Business Exposures Rule (ML-326, ML-327) Optional property coverage using HO, Commercial and Inland Marine forms and rates.

Incidental farm exposures may be written subject to the following: Maximum 100 acres for all contiguous property associated with main residence/deed. Maximum total of 3 farm animals. Limited farm equipment & machinery ($25,000 maximum). Operation must be rental only or part-time operation by insured. HO/MHO PSE required excluding Coverage B perils on barns (fire forms may be attached if

coverage acceptable/desired).

Barns with no farming exposure or use on premises may be written on HO subject to: Barn Exclusion Endorsement attached (HO/MSE PSE) to exclude Barns from Cov.B. Fire Forms & Rates may be used if coverage desired on barns.

Seasonal dwellings may be written if exclusively owner-occupied (no rentals) at least 5 months during the year.

CPL must be deleted and included under primary residence policy. Secondary/Seasonal endorsement ML- 416 must be attached. ML-8 is only form available if OIC does not write main residence. ML-1 or ML-2 may be

considered on a non-binding basis if main home is written with OIC. ML-3 is not available. Replacement Cost may not be available based on underwriting considerations.

6/04 P-3



HOMEOWNER PROGRAM (continued)

Double-wide manufactured homes may be written subject to the following: Must be on a full continuous masonry foundation. (Photograph required with application). MHO must be less than 10 years old when initially written with OIC. ML-3 available only on homes less than 5 years old when initially written. Replacement cost on Coverage A for units up to 5 years old at a minimum of $75,000. Minimum ACV amount is $30,000.

Form ML-3 may not be written on the following: Roof and hot water heater not replaced in past 25 years. History of ice back-up or ice damming

Form ML-5 may not be bound and is subject to the following: Home must be less than 10 years old. Minimum amount of Coverage A is $150,000. Must be insured to 100% of replacement cost as determined by OIC. Must include Inflation Guard ML-243 for at least 4%. Doublewides, Seasonal and Unprotected are ineligible.

Tenants & Condominiums Minimum $10,000. Condominiums should include Unit Owners Additions & Alterations (ML-31) of at least $2000,

Miscellaneous Real Property (ML-34) of at least $1000 and Loss Assessment Coverage (ML-35) of at least $5000.

Replacement Cost Valuation – Coverage A Minimum Coverage A amount is $90,000 (except seasonal). Inflation Guard (ML-243) is mandatory on all policies (ACV & Replacement) except ML-4

forms. Note: No premium charge for ML 243 up to 6% annual inflation guard. Minimum Replacement Cost basis is 100% at all times. OIC reserves the right to change the risk to an ACV basis if the amount of insurance and/or

Inflation Guard % is deemed inadequate. Replacement Cost coverage is subject to prior underwriting approval where a substantial

difference (over 50%) exists between Replacement Cost and Actual Cash Value or Market Value.

Dwellings may not be written on Replacement Cost unless roof and hot water heater are replaced within past 25 years. Electrical panel & wiring and plumbing fixtures must have been updated & modernized and in above average condition. Furnaces over 30 years old must have a copy of maintenance invoice or certificate dated within the past 2 years verifying good working condition or operation.

Current year Replacement Cost Estimator must accompany all requests for Replacement Cost on Coverage A.

Guaranteed Replacement Cost Endorsement ML-24 or ML-24A is not available.

ACV Valuation - Coverage A Risks written on ACV basis shall also include Inflation Guard Endorsement ML-243

7/15 P-4



HOMEOWNER PROGRAM (continued)

Market Value or Comparable Value Homeowner Endorsement (ML 16) Home must be built prior to 1940 Coverage A amount must be at least 100% of market value Market value must be 50-80% of replacement cost (current year costimator required) Construction grade/type of “economy” or “Class I” are ineligible

ML-70 (Liability on 1-2 Family Rentals) – Ineligible under OIC Homeowner Program

Home Based Business exposures (maximum $10,000 receipts) may be covered under Incidental Business Exposures Rule.

Minimum Coverage A or C Amounts

Main Residence Seasonal Double- Wides

Form ACV Replacement ACV Replacement ACV Replacement

1 $50,000 $90,000 Refer to Company $40,000 $75,0002 60,000 90,000 Refer to Company 50,000 75,0003 75,000 90,000 N/A N/A 60,000 75,0004 Cov C 10,000 15,000 7,000 10,000 10,000 15,0005 N/A 150,000 N/A N/A N/A N/A8 50,000 90,000 30,000 75,000 40,000 75,000

Note 1: Do not bind any risks for which a minimum amount of Cov A is not shown. Note 2: Maximum Coverage A binding authority is $250,000 on Main residence. Note 3: Maximum Coverage A binding authority is $150,000 on Seasonal residence.Note 4: Maximum binding authority total risk for all property coverage (Cov A, B, C, D & IM is

$500,000 due to reinsurance requirements.

Maximum Personal Liability Limit (Cov L) binding authority is $500,000.

7/05 P-5


AGENTS UNDERWRITING

GUIDELINES MANUFACTURED

HOME PROGRAM

GENERAL GUIDELINES

Also refer to Section “Ineligible Risks or Risks Which May Not Be Bound”.

Owner-occupied in good or better than average condition. Unprotected risks may be written provided MHO is not in a remote or inaccessible location and is

accessible to emergency vehicles all year round. Statement as to accessibility must be provided for all unprotected risks before binding.

MHOs with additions not professionally installed are not eligible. MHOs with Auxiliary Heating Devices (woodstoves) are not eligible. MHOs over 15 years old are not eligible for new business. MHOs up to 15 years old are eligible for ML 2. MHOs up to 7 years old are eligible for ML 3. ML4 must meet all of the same eligibility underwriting requirements as other forms. Seasonal units are eligible for ML 1 only. ML 26 Trip Collision and ML 25 (Consent to move MHO) may not be bound without prior approval. Replacement Cost (Coverage A) is available on units up to 8 years old at a minimum of $20,000

and 100% insurance to value. Replacement Cost (Coverage A) is not available on MHO’s where a substantial difference exists

between Replacement Cost and market value, book value or ACV. Incidental Farming exposures may be written (See HO section for guidelines). Barns - Same as HO requirements. Tie-Down credit applies to MHOs that are provided with tie-down systems installed in accordance

with part 1223 of the State Uniform Fire Prevention and Building Code, as certified by the dealer/installer or authorized inspector.

ML70 is not permitted. Home Based Business - Same as HO Minimum Coverage A is $6000. Minimum Coverage C for ML4 is $5000.

7/05 P-6



FARMOWNER PROGRAM

GENERAL GUIDELINES

Also refer to Section “Ineligible Risks or Risks Which May Not Be Bound”. Horse Farms are not eligible. Any risk with any milk contamination loss in the previous 3 years may not be bound. Exotic or unusual birds and animals may not be bound.

1-2 & 3-4 family owner-occupied dwellings are eligible. Dwellings under construction may be written on a FO policy provided the construction is being done

by professional builders with a contract to complete within 90 days of the effective date of the policy. Copy of the contract must be provided to OIC with application. A Certificate of Occupancy must be provided prior to occupancy and the occupancy must be completed within 90 days of the effective date of the policy.

Bed & Breakfast facilities up to 5 rooms (units) may be written, if owner-occupied. Breakfast only served Smoke detectors in each room required Liquor liability exclusion endorsement required No swimming facilities No horseback riding Base premiums receive 10 % credit. Mandatory liability charge under Incidental Business Exposures Rule (ML-326,ML-327) Optional property coverage using FO, Commercial and Inland Marine forms and rates.

Other Coverage A requirements Refer to HO Section regarding mandatory inflation guard, replacement cost, ACV, prime cut, seasonal, forms available et.al.

Additional Farm Dwellings located on the insured farm premises. Occupied by farm employees or tenants. They may be included under Coverage F for ML 6 perils by

scheduling on ML 303 and extending liability on ML 70. If additional perils or broader form are desired and they qualify, they may be written under the Dwelling Program as non-owner occupied dwellings using the rates and forms for that program.

Occupied by insured or co-owner(s) of the farm. They may be included under Coverage F for ML 6 perils by scheduling on ML 303. Liability may be extended under Additional Residence Premises rule 6-–c –1 or Additional Interests rule 6-e-2/6-e-3, as appropriate. If additional perils or broader form are desired and they qualify, they may be written under the Homeowner Program and their Farm Liability maintained on the FO policy.

Barns and Other Structures - Coverage F (No automatic coverage under Coverage B). May be scheduled on ML 303 for ML 6 Perils. All items insured must be listed under Coverage F Photos of all barn sides required (minimum of 2 photos) Barns not acceptable for ML6 perils may be considered for Fire & Lightning only using farm

properties manual (fire) and forms.

Note: Application must indicate how much personal property is stored in each barn. (See above)

2/02 P-7

ONTARIO INSURANCE COMPANYAGENTS UNDERWRITING

GUIDELINES

FARMOWNER PROGRAM (continued)

Farm Personal Property (Produce, supplies, machinery, poultry, livestock) Coverage E May be scheduled on ML 300 for ML 6 perils. Must be insured to at least 80% of ACV at all times due to Co-Insurance clause in form ML6.

Incidental Farming Credit Applies if insured is not engaged in farm activities but has farm related exposures that do not meet

the Incidental Farming criteria in HO Manual.

ML 70 is permitted on FO Program for dwellings on insured farm premises only

Farm diagram showing all buildings, structures and farm personal property (produce, hay, silage, machinery, and livestock) whether insured or not must accompany application. The diagram should indicate the distance between each of the structures. The barn/building where each category of farm personal property is stored must be indicated, including the amount (value) in each structure.

Maximum Binding Authority

Coverage A – Same as HO Program Barns (Any one barn and contents) - $250,000 Agent must have seen all sides of barn and at least

two (2) pictures submitted for each barn showing all sides and angles. Any one risk (all property coverage within 75 feet of each other including dwellings, barns, other

structures, farm personal property and inland marine) - $400.000 Scheduled Farm Personal Property - $75,000. Any single article - $5000 Inland Marine

Livestock & Machinery - $200,000 per risko Each item/animal must be individually scheduled to at least 80% of the ACV due to

Coinsurance Clause in form.o Smaller machinery items may be listed as a group with a maximum value of $500 per

item subject to the coinsurance clause. Same applies with similar animals but with an appropriate value per head.

o Leased or rented equipment necessary for the farm operation may be added to an existing policy.

Maximum per head – Grade Cattle ($1500), Grade Swine ($200), Grade Sheep ($100), Grade Horses ($1500).

Registered Livestock - $5000. Registration papers must accompany application and must provide for a verification of value before being bound.

Farm Liability - $500,000 Farm Pollution Liability - $50,000

FARM PROPERTIES (Fire policy)

Same requirements as FO Program but intended for non-owner occupied risks. Rates are developed from Farm Properties Manual located after the Dwelling Manual pages. Minimum developed policy premium is $100. Farm Liability (FL-OLT-F or FL-OLT-FE) may be added.

2/02 P-8

ONTARIO INSURANCE COMPANYDWELLING or STANDARD FIRE PROGRAM

Owner-Occupied

(For rented dwellings refer to Residential Rental Property Program)

Dwellings not meeting our other “package” policy requirements (HO, FO, and MHO) such as for lower minimums, non owner-occupied, seasonal occupancy etc. may be considered under this program. Risks which do not meet underwriting requirements of our other programs or the general guidelines for all policies under the Section “Ineligible Risks or Risks Which May Not Be Bound” may not be bound and require prior approval.

Risks that have inherent defects, increased hazards or are not in good condition should not be submitted.

Perils and coverage may be restricted for certain risks presenting increased exposure or hazards, such as Fire/Lighting only, Fire & EC w/o VMM. The form and perils offered would vary by the exposure and hazards presented for each risk.

We will consider vacant and unoccupied risks under this program for a limited period (up to one year) which have a plan for utility purposes/value. Coverage would be subject to limited perils and a minimum $500 Deductible. We must be insuring the property continuously under another policy (HO, FO, MHO) and the risk is no longer eligible under the previous program solely due to a change in occupancy. We would not be interested in a risk where the insured has moved out of the state.

MHO’s/Trailers over 20 years old as new business are not eligible. FL-1 only between 16-20 years old.

FL-2 (Broad Form) is subject to the following: Property in good repair and properly maintained Seasonal property is not eligible Manufactured Homes/Trailers may not be more than 15 years old Hot water heater and roof replaced within past 25 years Central Heat Property is owner-occupied at least 9 months out of the year Property is not unprotected fire classification

FL-3 (Special Form) is subject to the following: Property must be in above average repair and well maintained Seasonal property is not eligible Manufactured Homes/Trailers may not be more than 10 years old Hot water heater and roof replaced within past 25 years Central Heat Property is owner-occupied at least 9 months out of the year Property is not unprotected fire classification


Coverage A - $200,000 (Protected & Semi-Protected only can be bound) Liability Cov L - $500.000 Forms - FL-1, FL-2 & FL-3.

7/05 P-9

ONTARIO INSURANCE COMPANYRESIDENTIAL RENTAL PROPERTY (1-4

Family)

Non-Owner Occupied

GENERAL GUIDELINES

The underwriting and pricing of residential rental-property packages are designed for the average to better- than-average 1-4 family rental unit with owners demonstrating financial stability, pride of ownership, full time property management, signed leases and long standing stable tenants. Our intent is to insure the incidental ownership of rental property (up to 4 units) rather than the risk that owns or speculates with commercial income property. The guidelines that follow help to achieve the objectives but are incomplete without the assistance and recommendations of the agent.

Also refer to Section for “Ineligible Risks or Risks Which May Not Be Bound” for Personal Lines policies.

Owner & Financial Considerations Mortgagee must be of the conventional/commercial type (i.e. not an individual). No liens on any property owned by applicant/insured other than first or second mortgage. Property may not be for sale or in process for sale. Property units may not be unoccupied or vacant for more than 30 consecutive days. Owner may not be an absentee landlord who does not regularly see property. Any prior losses on this rental property require prior approval before binding (consideration given

only where condition eliminated for prior cause of loss).

Tenant/Rental Considerations All tenants must be gainfully employed full-time (except retirees). Tenants who are students or student status are unacceptable. Rooming houses, fraternity/sorority houses and property rented to groups are ineligible. Stable turnover rate (minimum 3 years at insured location for each tenant). Lease with security deposit for each tenant required and/or evidence of tenant’s liability coverage

(renter’s policy), including fire legal liability with another carrier.

Property/Considerations 1-4 family units may not be attached to or part of other adjoining units (i.e. rowhouses) whether or not

separated by fire walls/divisions.

Manufactured Homes/Trailers over 20 years old are not eligible as new business.

Age – Dwellings built prior to 1960 must have approved update (professionally installed or certified) since 1960 for electrical, plumbing, heating and roof to be written. Also, refer to Electrical, Plumbing, Heating and Roof sections.

. Roof – Flat roofs or tar-paper roofs are unacceptable due to the weight of ice and snow

peril/exposure

Electrical – All major appliances operated by electric should be on a separate circuit. Circuits must provide approved amperage for number of residential units and potential usage. Service entrance panel and wiring must be professional installed or certified by local building/fire inspector.

8/14 P-10


RESIDENTIAL RENTAL PROPERTY (continued)

Non-Owner Occupied

Property Considerations (continued)

Plumbing – Adequate number of hot water heater units in relation to number of tenants/apartments and size of tank (approx. 2-4).

Heating – Central heating in all units required. Space heaters, auxiliary heating devices (woodburning stoves), fireplaces, kerosene heaters or similar devices are unacceptable (Owner- occupied units may be considered for woodstove/fireplace subject to satisfactory woodstove questionnaire accompanying application.). Heating vessel (boiler, furnace) should be inspected annually.

3-4 Family Units – Number of units must not exceed number or original design unless professionally remodeled and certified.

Protective Security Devices – Operating smoke detectors must be in each rental unit and common entrance ways/hallways. Fire extinguishers must be conveniently available to each unit and clearly marked/visible.

Unprotected Classification – Property classified as unprotected fire class is not eligible.

Seasonal Property – Such property may not be bound.

Rehabilitation Property – Such property is not eligible.

Locations, Adjacent Exposures –The following exposures are ineligible to be bound: Properties subject to above average exposure to crime, arson and vandalism. Mercantile occupancy/exposure in close proximity (100 ft.). Adjacent buildings within 15 ft. of insured property. Fire carrying media – debris, brush, trash or other combustible material in or around premises.

Exits - A minimum of 2 exterior exits from building, including approved means of egress from units above first floor are required.

Maintenance & Housekeeping – Premises internally and externally must be well maintained, neat, clean and structurally sound.

Liability Considerations - The following liability exposures are unacceptable: Uneven/broken sidewalks, broken or sagging steps/porches; Absence of handrails/banisters or loose handrails/banisters (interior and exterior); Evidence of lead paint poison hazard; Certain dog breeds (Akita, Chow, Doberman, German Shepherds, Presa Canarios, Rottweiler,

Certain Terriers {all “bull” & “staffordshire” breeds}, or a mixed breed thereof including any animal with a history or display of aggressive behavior;

Loose carpeting, linoleum, tile; Swimming pools/bodies of water on or adjoining premises; Business activities/pursuits on premises by owner or tenants.

7/05 P-11

ONTARIO INSURANCE COMPANYRESIDENTIAL RENTAL PROPERTY (continued)

Non-Owner Occupied


Coverage A - $200,000 (Protected & Semi-Protected only can be bound)Liability Cov L - $500,000Forms - FL-1, FL-2 & FL-3.

Note 1: FL-3 available only on well-maintained dwellings in which roof and hot water heater have been replaced in past 25 years.

Note 2: Manufactured Homes/Trailers - FL-3 available up to 10 years old. FL-2 available up to 15 years old.

Minimum Coverage A - (ACV)

Dwellings - $25,000 Manufactured Homes/Trailers - $5000

Replacement Cost Valuation – Coverage A

Minimum Coverage A amount is $90,000. Minimum Replacement Cost basis is 90% at all times. Automatic Increase in Coverage A (FL 10) required. OIC reserves the right to change the risk to an ACV basis if the amount of insurance is

deemed inadequate. Replacement Cost is not available on dwellings where a substantial difference exists

between Replacement Cost and Market Value or ACV. Dwellings may not be written on Replacement Cost unless roof & hot water heater have

been replaced or updated within past 25 years. Electrical panel & wiring and plumbing fixtures must have been updated & modernized and in above average condition. Furnaces over 30 years old must have a copy of maintenance invoice or certificate dated within the past 2 years verifying good working condition or operation.


7/05 P-12


INLAND MARINE BOATOWNER SUPPLEMENTAL UNDERWRITING GUIDE(Attachment to HO, FO or MHO Policies)

Refer to Boatowners Program for stand-alone boat policies

Air propelled or powered boats Amphibious vehicles Converted automobile engines

Ineligible Boat Types

Boats used or developed for experimental purposes Boats capable of speeds in excess of 50 MPH and/or exceeding manufacturers

recommended HP or MPH Boats with high mileage and/or below average condition Boats exceeding 35 feet in length Boats used for business, charter or other commercial purpose Boats with split or multiple hulls (other than Catamaran’s less than 16 feet in length) Converted military surplus vessels Home-built or kit-built boats House Boats used as year-round or seasonal residences Hovercraft Hydrofoils or Hydroplanes Ice Boats Inflatables Personal Watercraft (“Jet skis”, Skidoos”, “Wave runners”, etc.) Pontoon Boats (unless sectioned or ballasts filled with foam or other stabilizing material) Power Boats owned or used for racing Sailboards or windsurfers Submersible watercraft Values exceeding $75,000.

Ineligible Owners and/or Operators

Boats owned or registered to other than a covered insured under the HO/FO/MHO policy Owner or principal operator with less than three years boating operation experience Owner or principal operator not familiar with primary waters to be navigated (Must reside or own a

residence within 100 miles of primary waters navigated) Extensive-use operators under 18 years of age Owner or operator with a major conviction in past 10 years (DWI, DWAI, etc.) Owner or operator with a license revocation or suspension in past 10 years Owner or operator with a combination of 2 or more accidents/violations in past 3 years Three (3) or more accidents /violations for all operators/owner(s) combined in past 3 years More than one (1) boating accident in past 3 years

Ineligible to Be Bound(May be submitted on a non-binding application)

Liability Limits in excess of $500,000 Risks cancelled, declined or non-renewed in past 5 years Boats for sale (new business) Wooden Boats over 15 years old (new business) Boats over 25 years old (new business)7/05 P-13


INLAND MARINE BOATOWNER SUPPLEMENTAL UNDERWRITING GUIDERefer to Boatowners Program for stand-alone boat policies

(Attachment to HO, FO or MHO Policies)

Ineligible to Be Bound (continued)*(May be submitted on a non-binding application)

Values exceeding $40,000. Miscellaneous Property Values (equipment, accessories) exceeding $10,000. Boats with existing damage Boats rented or loaned to others

* Risks listed above may be considered on a non-binding application accompanied by full particulars relating to the ineligibility.

Other Underwriting Considerations

Either agent or OIC must verify driving record prior to binding with currently dated MVR’s. Operators under the age of 16 must be accompanied by another operator with a valid automobile

drivers license or adult (21 years of age or older) An adult (21 yrs of age or older) must be present (on-board) during water-skiing operations Photographs required for the following:

Wooden Hulls over 15 years old Fiberglass/Metal Hulls over 20 yrs old Values over $40,000 (except new models)

OIC reimburses at $3.00 each for photographs and $5.00 each for currently dated, satisfactory (eligible) MVR’s.

7/05 P-14



BOATOWNERS PROGRAM(Stand- Alone Policy)

INELIGIBLE BOAT TYPES

Air propelled or powered boats Amphibious vehicles Converted automobile engines Boats used or developed for experimental purposes Boats capable of speeds in excess of 45 MPH and/or exceeding manufacturers

recommended HP or MPH Boats with high mileage and/or below average condition Boats exceeding 30 feet in length Boats used for business, charter or other commercial purpose Boats with split or multiple hulls (other than Catamaran’s less than 16 feet in length) Converted military surplus vessels Home-built or kit-built boats House Boats used as year-round or seasonal residences Hovercraft Hydrofoils or Hydroplanes Ice Boats Inflatables Personal Watercraft (“Jetskis”, Skidoos”, “Waverunners”, etc.) Pontoon Boats (unless sectioned or ballasts filled with foam or other stabilizing material) Power Boats owned or used for racing Sailboards or windsurfers Submersible watercraft Values exceeding $75,000.

INELIGIBLE OWNERS and/or OPERATORS

Boats owned or registered to other than an individual or husband and wife Owner or principal operator with less than three years boating operation experience Owner or principal operator not familiar with primary waters to be navigated (Must reside or own a

residence within 100 miles of primary waters navigated) Extensive-use operators under 18 years of age Owner or operator with a major conviction in past 10 years (DWI, DWAI, etc.) Owner or operator with a license revocation or suspension in past 10 years Owner or operator with a combination of 2 or more accidents/violations in past 3 years Three (3) or more accidents /violations for all operators/owner(s) combined in past 3 years More than one (1) boating accident in past 3 years

12/97 P-15



BOATOWNERS PROGRAM (Continued)

(Stand- Alone Policy)

INELIGIBLE TO BE BOUND

Liability Limits in excess of $500,000 Medical Payments in excess of $5,000 per person Risks cancelled, declined or non-renewed in past 5 years Boats for sale (new business) Wooden Boats over 10 years old (new business) Fiberglass or metal boats over 15 years old (new business) Values exceeding $75,000. Miscellaneous Property Values (equipment, accessories) exceeding $25,000. Boats with existing damage Boats rented or loaned to others

Risks listed above may be considered on a non-binding application accompanied by full particulars relating to the ineligibility.

OTHER UNDERWRITING CONSIDERATIONS

Either agent or OYIC must verify driving record prior to binding with currently dated MVR’s. Operators under the age of 16 must be accompanied by another operator with a valid automobile

drivers license or adult (21 years of age or older) An adult (21 yrs of age or older) must be present (on-board) during water-skiing operations Photographs required for the following:

Wooden Hulls over 10 years old Fiberglass/Metal Hulls over 15 yrs old Values over $40,000 (except new models)

OIC reimburses at $3.00 each for photographs and $5.00 each for currently dated, satisfactory (eligible) MVR’s.

12/97 P-16


INLAND MARINE

PERSONAL LINES CLASSES

GENERAL

May not be written on a stand-alone policy. Must be written with a minimum of $100 Deductible. Certain classes may require a higher

deductible due to the exposure. Items insured must be consistent with background, lifestyle and occupation. A current appraisal (within 18 months) must be submitted prior to binding. Periodic re-appraisals may be required to maintain coverage. Original date of purchase or date acquired, including name & address of seller/merchant

required. Original purchase price required. If not purchased, was it a gift or inherited? A current bill of sale will be accepted for newly acquired items provided the description is

complete. Photographs required when appraiser has not personally seen all items. Business or professional use or exposure is not permitted for use with Personal Lines

classes of IM, such as musical instruments and photography equipment. Trip Transit, Pedigree Animals and Recreational Vehicles such as snowmobiles, ATV’s are

not eligible. Boats – Refer to Boatowners program for stand-alone Boat policy or Boatowners

Supplemental Underwriting Guide for attachment to HO, MHO or FO policy.

MAXIMUM BINDING LIMITS

$5000 single item, $15,000 total schedule

JEWELRY

Jewelry must be appraised by a graduate gemologist and include at least the 4 “C’s” (color, cut, clarity & carats).

Men’s jewelry must be referred for prior approval (except watches). Are items owned and worn by named insured or spouse who each reside in same household? If

not, by whom? Do they reside in same household as named insured? Is item (s) worn daily or only on special occasions? When not worn, is it kept at home or at a bank vault/safety deposit box? If kept at home, what security devices exist? Damaged articles are not eligible. Pearl necklaces must be individually knotted. Charm bracelets must be specifically described, including number and type of charms.

OTHER SCHEDULED CLASSES

Hearing Aids are not eligible. NO items subject to obsolescence are permitted. NO professional use or business property are permitted.

Appraisal must adequately describe the item(s), be on proper letterhead and the appraiser must be qualified to appraise the item (s) described.

7/05 P-17


INLAND MARINE

PERSONAL LINES CLASSES (Continued)

Photographs are required when item(s) have not been seen by an appraiser and are being “updated” from a prior appraisal or price list. Damaged items are not acceptable. Fine Arts – Due to the subjective nature of Fine Arts a current appraisal on letterhead by a

recognized and qualified appraiser (not auctioneers or gift shops) must support and accompany any bills of sale.

Paintings, lithographs and similar type items are not eligible to be bound. Breakage coverage must be written with a minimum $250 Deductible. Rugs are not eligible… only wall tapestries.

7/05 P-18


LANDLORD PACKAGE POLICY (1-4 Family)

Non-Owner Occupied Only

GENERAL GUIDELINES

The underwriting and pricing of residential rental-property packages (Landlord Package Policy) are designed for the average to better-than-average 1-4 family rental unit with owners demonstrating financial stability, pride of ownership, full time property management, signed leases and long standing stable tenants.Our intent is to insure the incidental ownership of rental property (up to 4 units) rather than the risk that owns or speculates with commercial income property. The guidelines that follow help to achieve the objectives but are incomplete without the assistance and good risk selection judgment of the agent.

Also refer to Sections “Standard Procedures for All Policies” and “Ineligible Risks or Risks Which May Not Be Bound” for Personal Lines policies.

Owner & Financial Considerations No liens on any property owned by applicant/insured other than first or second mortgage. Property may not be for sale or in process for sale. Property units may not be unoccupied or vacant for more than 30 consecutive days. Owner may not be an absentee landlord who does not regularly see property unless the property is

managed by a professional property manager. Any prior losses on this rental property require prior approval before binding (consideration

given only where condition eliminated for prior cause of loss).

Tenant/Rental Considerations All tenants must be gainfully employed full-time (except retirees). Tenants who are students or student status are unacceptable. Rooming houses, fraternity/sorority houses and property rented to groups are ineligible. Stable turnover rate (minimum 3 years at insured location for each tenant). Lease with security deposit for each tenant required and/or evidence of tenant’s liability coverage




Manufactured Homes/Trailers are not eligible.



peril/exposure


8/14 P- 19


Landlord Package Policy (1 – 4 Family) (continued)




Heating – Central heating in all units required. Space heaters, auxiliary heating devices (woodburning stoves), fireplaces, kerosene heaters or similar devices are unacceptable. Heating vessel (boiler, furnace) should be inspected annually.

3-4 Family Units – Number of units must not exceed number or original design unless professionally remodeled and certified.









Loose carpeting, linoleum, tile; Swimming pools/bodies of water on or adjoining premises; Business activities/pursuits on premises by owner or tenants.

5/14 P- 20


Landlord Package Policy (1 – 4 Family) (continued)



Coverage A - $200,000 Liability Cov L - $500,000 Forms - FL-1, FL-2 & FL-3.

Note 1: FL-3 available only on well-maintained dwellings in which roof has been replaced in past 10 years.


Dwellings - $60,000


Minimum Coverage A amount is $90,000. Minimum Replacement Cost basis is 90% at all times. Automatic Increase in Coverage A (FL 185) required. OIC reserves the right to change the risk to an ACV basis if the amount of insurance is

deemed inadequate. Replacement Cost is not available on dwellings where a substantial difference exists

between Replacement Cost and Market Value or ACV. Dwellings may not be written on Replacement Cost unless roof has been replaced or

updated within past 10 years. Electrical panel & wiring, hot water heater and plumbing fixtures must have been updated & modernized and in above average condition. Furnaces over 30 years old must have a copy of maintenance invoice or certificate dated within the past 2 years verifying good working condition or operation.


5/14 P- 21


COMMERCIAL PROGRAMSAGENTS UNDERWRITING GUIDELINES

Ineligible Risksor

Risks Which May Not Be Bound(Commercial Lines)

Ineligible Property Exposures

Vacant, unoccupied or under renovation/restoration/rehabilitation. May be submitted for consideration if seen by agent along with photographs. Coverage and limits may be restricted.

Property under foreclosure. For sale more than 12 months. Policy in the name of a mortgagee, or interest other than the owner/occupant. More than two (2) mortgagees on property. Unsatisfactory financial condition, reputation or attitude of insured. Cancelled, non-renewed or refused coverage by any company within past 3 years. Cancelled for non-payment by any company within past 12 months or a history of late payments. No prior insurance in effect More than one loss in past 3 years. Any loss $10,000 or greater in past 5 years. Remote locations or not accessible to emergency vehicles year-round. Risks not meeting building or municipal codes in all respects. Structures that appear to be in below-average condition and/or inadequately constructed. Below-average housekeeping, maintenance or upkeep of premises, structures or equipment. Habitational property without central heat or central heat is not main heat source. Property with space heater, woodstove, evidence of kerosene or similar type heating. Electrical Service of less than 150 AMP service. Inadequate roof, electrical, plumbing or heating system. Adjacent exposures increasing the hazard (Vacant buildings, high crime or vandalism, brush or

debris, flammable storage material or operations, etc.). Evidence of mold or conditions conducive to mold development.

Ineligible Liability Exposures

Any liability claim/reserve of $10,000 or more in past 5 years. Any liability claim in past 3 years involving a condition of premises. Junk, clutter, debris or attractive nuisance on premises. Sidewalks, driveways and steps that are in need of repair, not in good condition or not properly

maintained in all types of weather. Stairsteps without proper railings or banisters. Underground storage tanks (not septic tanks). Evidence of pollution or prior pollution claim Risks/exposures outside of NY State.

7/05 C-1



Ineligible Risksor

Risks Which May Not Be Bound (continued)(Commercial Lines)

Ineligible Coverage or Types of Insurance

Monoline General Liability, Burglary or Glass policies. Those coverages are made available only as parts of our package products (BOP, SMP, and Craftsman). However, we do write monoline Commercial Property policies.

Automobile Liability Insurance, except as permitted under GL policies for Employers Non-Owned Auto Liability and Hired Auto under Multi-Peril type policies.

Non-Owned Auto Liability – May not be written for certain types of risks providing delivery service (Ex. Pizza Shops).

Professional Malpractice Liability Cemetery or Morticians’ Liability, Clergyperson Professional Liability, Druggists Liability and

other Professional Liability except Beauty Parlor or Barber Shop (LS-44). Pollution, Seepage and/or Environmental Impairment Flood Hail damage to standing or growing crops Financial Guarantee & Insolvency Aviation or Aircraft Liability Workers Compensation, except in conjunction with Homeowner type policies

Ineligible Businesses, Classes , Products or Structures

Manufacturers and Contractors (M&C) classifications and exposures except those eligible classes written through the Craftsman 12 Program which meet underwriting requirements of the Craftsman Program. Refer to the Craftsman Underwriting Guide and rating manual for more detailed information.

Adult Care & Homes for Aged, Athletic Activities/Contests/Events/Facilities, Beaches & Swimming Facilities, Bowling Alleys, Day Care/Nurseries, Dance Studios, Fairs & Fairgrounds, Parks & Playgrounds, Pet Shops, Race Tracks and/or Riding Lessons, Recreation Center, Schools, Shooting Ranges, Tavern, Vacant Buildings.

Airports Alarm Manufacturing/Installation Buildings greater than 3 stories Government Buildings, Municipalities Infrastructure risks (Bridges, dams, tunnels, shipping ports) Landmark buildings Major Educational Facilities

7/05 C-2



Ineligible Risksor

Risks Which May Not Be Bound (continued)(Commercial Lines)

Places of public assembly (Arenas, stadiums, convention centers & amusement parks and similar type exposures)

Products involving chemicals, petrochemicals, fertilizers, assembly of military goods, pharmaceuticals

Security Firms Sprinkler System Manufacturing/Installation Utilities (Water/sewage treatment facilities, gas companies, communication/telecom operations

including ISP’s, power plants & nuclear facilities)

Note 1: The above does not constitute a complete list of businesses, classifications, products or type of insurance which are ineligible for coverage. Call an Underwriter if you have any question on eligible risks.

Note 2: All coverage, options and limits displayed in the URB rating manuals may not be acceptable or available from the Company. Refer to Company if any question on availability.

Miscellaneous

Risks or exposures listed above may be considered for coverage on a non-binding basis. Also refer to the list of acceptable classifications. A completed application with full particulars should be referred to a Company Underwriter along with the agent’s recommendations and photographs.

Risks that are ineligible to be bound as listed above or elsewhere in the Underwriting Guidelines will not be considered bound by Ontario Insurance unless prior written approval has been obtained by an Underwriter.

All coverage, options and limits displayed in the URB rating manuals may not be acceptable or available from the Company. Refer to Company if any question on availability.

Minimum “developed” premium for stand-alone Commercial Inland Marine policies is $200. Rating manuals for each line or policy type have Minimum Retained Premiums in the event of

cancellation.

Inspections & Audit

OIC will use employees or outside representatives to conduct underwriting, risk management, audit and claim inspections and investigations. From time-to-time, we may also send various questionnaires or self- audit forms directly to the insured. We will advise you of any development, which may require any action or change to the policy. If a self-audit form is not returned to the Company by the due date requested, we reserve the right to automatically increase the payroll and/or receipts by 10% on the renewal.

7/05 C-3


ADDITIONAL INSURED GUIDELINES(All Commercial Policies)

General Contractors and/or Sub-Contractors are not permitted as Additional Insureds.

Hold Harmless Agreements are not permitted.

Additional Insured endorsement requests may not be bound unless the following have been reviewed prior to binding by agent and such information accompanies the endorsement request to the Company:

Copy of the letter and/or contract agreement outlining the specific insurance requirements required of the Insured.

Interest and/or relationship of the Additional Insured to the insured’s operations.

Specific work/activities performed by insured for Additional Insured.

Specific work/activities (if any) performed by Additional Insured for Insured.

Business Address of Additional Insured.

Location (s) or job site (s) addresses where insured performs or engages in activities for the Additional Insured.

Period of time (duration) for which the Additional Insured is to be listed on policy.

Certificates of Insurance may not be issued unless the above are fully complied with.Improper or incorrect Certificates of Insurance will require a direct written communication to the insured and all interests on the Certificate.

8/02 C-4

ONTARIO INSURANCE COMPANYINLAND MARINE

COMMERCIAL LINES

o DJ EquipmentINELIGIBLE CLASSES

o Professional Musical Instrumentso Professional Photography Equipmento Commercial Boats, Equipment rented to otherso Items regularly on exhibitiono Items regularly located or taken out-of-stateo Other classes or situations may be ineligible depending upon the risk or exposure.

Short -Term policies Motor Truck Cargo

INELIGIBLE RISKS

Ocean, River & Lake Cargo Risks requiring Motor Vehicle Filings, ICC or similar filings Out-of-State or foreign country exposures Negative Films Jewelers Block Aviation Hulls Birds or Animals Crops Registered Mail

ENDORSEMENTS TO POLICIES

$250 Deductible Minimum. Current appraisals or receipts required prior to binding.

Risks may not be bound

STAND-ALONE POLICIES

Available for risks not eligible for property & liability coverage with OIC Intended for unregulated IM classes not included or eligible for other standard (regulated) IM classes Company individually determines rates for each risk based on exposures and perils to be written Property must be owned by insured or on a long-term lease Maximum for total schedule (all items) is $500,000 Maximum for a single item is $100,000 Minimum Deductible is $500 for schedules with all items under $25,000 in value

o Single item values between $25,000 - $100,000 require a Minimum $1000 Deductible on each such item in this range.

Minimum Developed Premium is $500

7/06 C-5

ONTARIO INSURANCE COMPANYHABITATIONAL RENTAL PROPERTY

(Commercial)

5-20 Units

GENERAL GUIDELINES

Owner & Financial Considerations Mortgagee must be of the conventional/commercial type (i.e. not an individual). No liens on any property owned by applicant/insured other than first or second mortgage. Property may not be for sale or in process for sale. Property units may not be unoccupied or vacant for more than 30 consecutive days. Owner or professional property manager must see property regularly. Any prior losses on this rental property require prior approval before binding (consideration given

only where condition eliminated for prior cause of loss).

Tenant/Rental Considerations Tenants who are students or student status are unacceptable. Rooming houses, fraternity/sorority houses and property rented to groups are ineligible. Stable turnover rate (minimum 3 years at location for each tenant). Lease with security deposit for each tenant required and/or evidence of tenant’s liability coverage




Manufactured Homes/Trailers over 20 years old are not eligible as new business.



peril/exposure


8/14 C-6


HABITATIONAL RENTAL PROPERTY (continued)

(Commercial)


5-20 Units


Heating – Central heating in all units required. Space heaters, auxiliary heating devices (woodburning stoves), fireplaces, kerosene heaters or similar devices are unacceptable (Owner- occupied units may be considered for woodstove/fireplace subject to satisfactory woodstove questionnaire accompanying application.). Heating vessel (boiler, furnace) should be inspected annually.



Seasonal Property – Such property may not be bound.







Loose carpeting, linoleum, tile; Swimming pools/bodies of water on or adjoining premises;

7/05 C-7


HABITATIONAL RENTAL PROPERTY (continued)

(Commercial)

5-20 Units


Coverage A - $250,000 (Protected & Semi-Protected only can be bound) Liability - $500,000 Forms - SF-1, SF-2 & SF-3.

Note : SF-3 available only on well-maintained dwellings in which roof and hot water heater have been replaced in past 25 years.


Buildings - $50,000


Minimum Coverage A amount is $100,000.

Minimum Replacement Cost basis is 90% at all times.

Automatic Increase in Coverage A (SF 98) required.

OIC reserves the right to change the risk to an ACV basis if the amount of insurance is deemed inadequate.

Replacement Cost is not available on buildings where a substantial difference existsbetween Replacement Cost and Market Value or ACV.

Buildings may not be written on Replacement Cost unless roof & hot water heater have been replaced or updated within past 25 years. Electrical panel & wiring and plumbing fixtures must have been updated & modernized and in above average condition. Furnaces over 30 years old must have a copy of maintenance invoice or certificate dated within the past 2 years verifying good working condition or operation.

7/05 C-8

ONTARIO INSURANCE COMPANYCRAFTSMAN 12/PAK UNDERWRITING GUIDELINES

No general contractors permitted as Insureds

General Contractors & Subcontractors are not permitted as Additional Insureds

Hold Harmless Agreements are not permitted

Regular sub-contracting (more than 10%) is ineligible.

Full-time operations only permitted. Must be an ongoing year-round business, not seasonal.

No more than three employees.

Maximum $250,000 Gross Receipts, $150,000 Payroll.

Only classifications and operations listed in C/12 Manual may be considered; however, not all classes, rules and coverages may be acceptable based on underwriting considerations. Risks with more than one operation shall be classified using the highest rated class applicable.

Ineligible classes: Air Conditioning/Heating, Chimney Cleaner, Excavator, Floor Waxing, Gunsmith, Paving/Blacktopping (except residential), Roofing, Snowplowing, Surveyors.

Risks handling or disposing of pollutants or hazardous wastes (including janitorial services) are ineligible.

X, C, U (Explosion, Collapse and Underground Property Damage) exposures are ineligible exposures and not intended to be covered.

New ventures must have minimum three years full-time experience working for others in same type of business. Names and addresses of prior employers (not customers) for past three years and dates of employment with each employer are required to be listed on the application. Maximum limits $300,000/$500,000. Eligible only for LS-3.

Minimum of three years full-time experience operating in own business name for LS-5 or LS-6coverage. (Prior approval for LS-6).

No rental or leasing of equipment to others permitted.

Any risk cancelled, non-renewed or refused insurance for any reason (including non-payment) in past three years may not be bound without prior approval.

Any risk with a prior liability (BI or PD) completed operations or theft loss claim may not be bound without prior approval.

Risks operating outside of NY State or more than 100 miles from the business location listed on the policy are ineligible.

Maximum limits that may be bound are $500,000. Limits over $500,000 may not be bound.

7/05 C-9

ONTARIO INSURANCE COMPANYFOOD SERVICE UNDERWRITING GUIDELINES

• Binding authority limits outlined in Agents Binding Authority Section.

• Non-Owned Automobile Liability coverage may not be bound.

• Taverns, Sports Bars, Cocktail Lounges are ineligible.

• No entertainment, dancing, video games, bowling games, dartboards, etc. exposures permitted.

• Stable neighborhood and patrons.

• Alcohol beverage sales may not exceed 25 % of total sales. Closing hours at 11:00 P.M. if alcohol served.

Liquor liability coverage may not be bound. A separate non-binding LL application must be submitted for prior approval

• Approved Hood and Duct system in accordance with NFPA 96 standards covering all cooking areas.

• Approved automatic fire suppression system (ansul or comparable) covering all cooking areas.

• Minimum (2) portable fire extinguishers within 30 feet of stove/fryer (dry chemical type, minimum 40BC rating).

• Minimum (2) smoke detectors at each level/section, excluding kitchen.

• Regular (semi-annual) inspection/servicing of extinguishing system by qualified person.

• Shut off of fuel supply required.

• Minimum 16" from cooker/fryer pot to burner/flame. Minimum 48" from charbroiler to grease filter.

• Duct System - Clean out doors for every bend of duct system. Shall not pass through fire walls/partitions or connected with other ventilation or exhaust system.

• Positive moral character of owner and employees known to exist by agent (Sound financial condition, positive management attitude, reputation for honesty and integrity).

• No prior declination, cancellation or non-renewal (excluding non-payment) in previous 3 years.

• No fire, electrical or liability loss in past 3 years. No more than 2 claims of any type in past 3 years.

• Property characteristics - Proper condition, housekeeping and maintenance of building, equipment and premises. Electrical and plumbing meet local and state building code requirements.

• Proper disposition of smoking material.

• Liability characteristics - Proper number of exits and means of egress. Proper lighting inside/outside of premises including parking lot. Proper railings, walkways, flooring, staircases and absence of obvious liability hazards or attractive nuisances.

2/02 C-10


HOME BASED BUSINESS UNDERWRITING GUIDE

Designed for those who operate a small business out of their primary residence premises.The types of enterprise specifically targeted are individuals engaged in service, repair and retail distribution of products with operation conducted in or from their home.

Eligibility:

Operated from insured’s place of residence, sales, primarily away from residence (Malls, Farm & Craft Markets, etc.), repair and service business done exclusively at the insured residence premises described in the Policy Declarations.

Only those classes listed in the manual may be bound. Operated by the insured or other immediate family member. Must be incidental to occupancy of building as residence. Maximum of $20,000 business personal property. Maximum of $50,000 gross annual sales or receipts.

Underwriting Guidelines:

Business activities or operations outside of State of NY State are ineligible. Dwellings are not eligible for building coverage The limit of insurance must be at least 80% of actual value of all business personal property

and buildings. Applicant does not operate any other business under the same legal name. Must have good maintenance and loss control for business areas open to the public. HomeBase Program is not intended to be a pricing substitute for another more appropriate

program (i.e.-Farmowner, SMP, BOP, Craftsman).

Mandatory Coverages: (LS-6, SF-20, SF-4, SF-44, OY-133)

$1000 Extra Expense $5,000 Cause of Loss Not Otherwise Excluded coverage on business personal property (an

and off premises, in-transit) $250 Deductible $300,000 Business Liability including Products ($500,000 Aggregate) $50,000 Fire Legal Liability $50,000 Personal & Advertising Liability

Optional Coverages:

Buildings other than dwelling Valuable Papers & RecordsComputer Equipment Accounts ReceivableAdditional Insured’s Money & SecuritiesIncreased Limits of Liability: Customers GoodsBPP On/Off Premises SignsExtra Expense Replacement Cost Provision

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$25,000 $25,000$50,000 $50,000$100,000 $100,000$200,000 $200,000$250,000 $250,000$300,000 $300,000$500,000 $500,000


LIQUOR LIABILITY UNDERWRITING GUIDE

Liquor Liability may not be bound and must be requested by submission of a completed and signed Liquor Liability application. Please call OIC for Liquor Liability application.

Ineligible Risks

Liquor Package Stores, Pubs, Taverns, Sports Bars, Cocktail Lounges or similar type establishments

Establishments located close to colleges where sale of alcohol to minors is likely Establishments offering “Happy Hours”, “Ladies Nights” or similar drinking incentives Establishments with more than 25% of total receipts from the sale of alcohol beverages Establishments which are not primarily dining/eating establishments Live entertainment, dancing, video games, pool tables, bowling games, dartboards, pinball

machines etc. on premises Unstable neighborhoods or patrons Establishments which serve alcohol after 11:00 PM Owner convicted of a prior felony Owner charged with prior violations of liquor license or suspension of license in any name Liquor License is not currently in effect Termination of Liquor Liability insurance in past 3 years for any business owned/operated by

applicant Liquor liability claim in past 3 years for any business owned/operated by applicant Poor condition or upkeep of premises (inside or outside)

Liability Limits

Limits may not be greater than the General Liability Limit Following Limits are available: Each

Claim / Each Common Cause

Minimum Premium for Liquor Liability is in addition to other Standard Minimum Premiums.

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