<4D F736F F D20C0E7BBEAC1BEC7D5BAB8C7E820BEE0B0FC2E646F63>

Transcription

1 Package Insurance Policy

2 OPERATIVE CLAUSE WHEREAS THE INSURED named in the Master Schedule hereto has made to Lotte Insurance Co., Ltd. (hereinafter called the Insurers ) a proposal for the purpose of effecting this policy. In consideration of the payment by the Insured named in the Master Schedule hereto of the premium mentioned therein, THE INSURERS AGREE (subject to the Conditions, Provisions and Exclusions contained herein or endorsed or otherwise expressed hereon which shall all be deemed to be conditions precedent to the right of the Insured to recover hereunder) TO INDEMNIFY the Insured in respect of the liabilities, perils and risks hereinafter specified for such amounts up to the limit or limits stated in the Master Schedule or Schedules contained herein. GENERAL EXCLUSIONS IMPORTANT these General Exclusions shall apply to all sections of this package policy UNLESS OTHERWISE EXPRESSLY AGREED this insurance does not cover any loss, destruction or damage occasioned by or through or in consequence of or contributed to, directly or indirectly, by : 1. (a) war, invasion, act of foreign enemy, hostilities or warlike operations (whether war be declared or not), civil war (b) mutiny, civil commotions assuming the proportions of or amounting to a popular rising, military rising, insurrection, rebellion, revolution, military or usurped power (c) acts of terrorism committed by a person or persons acting on behalf of or in connection with any organization. For the purpose of this Exclusion, 1. (c) terrorism means the use of violence for political ends and includes the use of violence for the purpose of putting the public or any section of the public in fear. In any action, suit or other proceeding where the insurer alleges that by reason of the provisions of Exclusion 1. (a), (b) and (c) above, any loss, destruction or damage is not covered by this insurance, the burden of proving that such loss, destruction or damage is covered shall be upon the Insured. (d) ( ⅰ) permanent or temporary dispossessions resulting from confiscation, nationalization, com- mandeering or requisition by any lawfully constituted authority ( ) permanent or temporary dispossession of any building resulting from the unlawful ⅱ occupation of such building by any person - 1 -

3 Provided that the Insurers are not relieved of any liability to the Insured in respect of damage occurring before dispossession. (e) the destruction of property by order of any public authority 2. (a) Nuclear weapons material (b) Ionizing radiations or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel. Solely for the purpose of this Exclusions 2. (b) combustion shall include any self sustaining process of nuclear fusion. 3. Willful acts or willful negligence of the Insured or his representative. GENERAL CONDITIONS IMPORTANT these General Conditions shall apply to all sections of this package policy 1. DUE OBSERVANCES The due observance and fulfillment of the terms of this policy in so far as they relate to anything to be done or complied with by the Insured and the truth of the statements and answers in the Questionnaire and Proposal made by the Insured shall be a condition precedent to any liability of the Insurers. 2. INCORPORATION OF SCHEDULES The Schedule(s) of the Section(s) shall be deemed to be incorporated in and form part of this policy and the expression this policy wherever used in this contract shall be read as including the Schedule and the Section(s). Any word or expression to which a specific meaning has been attached in any part of this policy or of the Schedule or of the Section(s) shall bear such meaning wherever it may appear. 3. INSPECTION Representatives of the Insurers shall at any reasonable time have the right to inspect and examine the risk and the Insured shall provide the representatives of the Insurers with all details and information necessary for the assessment of the risk. 4. CHANGE IN RISK The Insured shall immediately notify the Insurers by telegram and in writing of any material change in the risk and cause at his own expense such additional precautions to be taken as circumstances may require to ensure safe operation of the insured items and the scope of cover and/or premium shall, if necessary, be adjusted accordingly

4 No material alteration shall be made or admitted by the Insured whereby the risk is increased, unless the continuance of the Insurance be confirmed in writing by the Insurers. 5. NOTICE OF ACCIDENTS In the event of any occurrence, which might give rise to a claim under this Policy, the Insured shall (a) immediately notify the Insurers in writing, giving an indication as to the nature and extent of loss or damage. Failure to give any notice within the time specified herein shall not invalidate any claim made by the Insured, if it shall be shown not to have been reasonably possible to give such notice within the prescribed time and that notice was given as soon as reasonably possible. (b) take steps within his power to minimize the extent of the loss or damage. (c) preserve the parts affected and make them available for inspection by representative or survey of the Insurers ; (d) furnish all such information and documentary evidence as the Insurers may require. (e) inform the police authorities in case of loss or damage due to burglary. Upon notification being given to the Insurers under this condition, the Insured may carry out the repairs or replacement of any minor damage with amounts not exceeding US$250,000; in all other cases a representative of the Insurers shall have the opportunity of inspecting the loss or damage before any repairs or alterations are effected. If a representative of the Insurers does not carry out the inspection within 45 days of receipt of notification (unless this is not reasonably possible), the Insured is entitled to proceed with the repairs or replacement. 6. SUBROGATION The Insured shall at the expense of the Insurers do and concur in doing and permit to be done all such acts and things as may be necessary or reasonably required by the Insurers for the purpose of enforcing any rights and remedies, or of obtaining relief or indemnity from parties (other than those Insured under this policy) to which the Insurers shall be or would become entitled or subrogated upon their paying for or making good any loss or damage under this policy whether such acts and things shall be or become necessary or required before or after the Insured's indemnification by the Insurers. 7. APPRAISAL In case the Insured and the Insurer shall fail to agree as to the amount of loss, damage or expense, the same may be ascertained by two competent and disinterested appraisers, the Insured and the Insurer each selecting one, and the two so chosen shall first select a competent and disinterested umpire; the appraisers together shall then estimate and appraise the loss, stating separately the cost to replace and/or replacement value, and, failing to agree, shall submit their differences to the umpire, and the award in writing of either two shall determine the amount of the loss ; the parties thereto shall pay the appraisers respectively selected by them, and shall bear equally the expense of the appraisal and umpire

5 8. FALSE DECLARATION If the claim be in any respect fraudulent, or if any false declaration be made or used in support thereof, or if any fraudulent means or devices are used by the Insured or any one acting on his behalf to obtain any benefit under this policy: or, if the destruction or damage be occasioned by the wilful act, or with the connivance of the Insured: all benefit under this policy shall be forfeited. 9. CONTRIBUTION If at the time any claim arises under this Policy there be any other insurance covering the same loss, damage or liability, the Insurers shall not be liable to pay or contribute more than their ratable proportion of any claim for such loss, damage or liability. 10.CANCELLATION This insurance may be terminated at the request of the Insured at any time before the occurrence of loss or damage, in which case the Insurers will retain the ratable proportion of the premium for the time this Policy has been in force. This insurance may equally be terminated at the option of the Insurers by 30 days notice within the permission of the law or statute in the country apply this Policy to that effect being given to the Insured in which case the Insurers shall be liable to repay on demand a ratable proportion of the premium for the unexpired term from the date of cancellation less any long-term discount on premiums granted. 11.PAYMENT OF CLAIM The indemnity shall be payable without delay after determination by the Insurers of the full amount due. Notwithstanding the above the Insured may, after the Insurers have been duly notified of the loss and have acknowledged their liability, claim as an installment the minimum amount payable under the prevailing circumstances. The running of the periods shall be suspended for the time during which the indemnity is unascertainable or not payable due to reasons within the Insured's control. (a) if there are doubts regarding the Insured's right to receive the indemnity pending receipt by the Insurers of the necessary proof : (b) if in connection with the claim an examination by the police or an inquiry under the criminal law has been instituted against the Insured pending completion of such examination or inquiry. 12.BANKRUPTCY AND INSOLVENCY In the event of the bankruptcy or insolvency of the Insured or any entity comprising the Insured, the Insurers shall not be relieved thereby of the payment of any claims hereunder because of such bankruptcy or insolvency

6 13.BREACH OF WARRANTY In the event of any warranty or condition being breached in any form or endorsement attached to or made part of this insurance, then this insurance shall be void from the date of such breach of warranty or condition. 14.DUE DILIGENCE The Insured shall at all times act with due diligence to prevent or minimize the extent of any loss, destruction of or damage to the property insured. 15.INNOCENT BREACH OF CONDITIONS This insurance shall not be affected by failure of the Insured to comply with any of the warranties or conditions of this policy or endorsed hereon over which Insured has no control. 16.EXTENDED EXPIRATION If this policy should expire or be cancelled while an occurrence giving rise to a loss is in progress, it is understood and agreed that said loss, subject to all other terms and conditions and Limit of Liability of this insurance will be covered under this Policy as if the entire loss had occurred prior to the expiration or cancellation. 17.LONG TERM AGREEMENT (not applicable to Section Ⅳ ) Where a discount of % has been allowed off the premium on this policy in consideration Long Term Agreement, the Insured undertakes to offer annually for from to renew the insurance under this policy on the terms and conditions in force at the expiry of each period of insurance, it being understood, however, that the Insurers shall be under no obligation to accept an offer made in accordance with the said undertaking. It is further agreed and understood that the sum insured may be reduced or increased at any time to correspond with any reduction or increase in value and that the above mentioned undertaking applies to any policy or policies which the Insurers may issue in substitution for this policy. ANY COVERAGE REFERRED TO IN THESE GENERAL CONDITIONS IS ALWAYS SUBJECT TO THE SPE- CIFIC TERMS AND CONDITIONS OF THE RELATIVE SECTIONS CONTAINED ELSEWHERE IN THIS PACK- AGE POLICY

7 SECTION Ⅰ PROPERTY ALL RISKS COVER SCOPE OF COVER SUDDEN AND ACCIDENTAL DIRECT PHYSICAL DESTRUCTION OF OR DAMAGE TO THE PROPERTY WHILST ON THE INSURED'S PREMISES MORE FULLY DESCRIBED IN THE SCHEDULE HERETO DIRECTLY AND WHOLLY ATTRIBUTABLE TO ANY CAUSE, EXCEPT AS HEREINAFTER PROVIDED, OCCURRING DURING THE CURRENCY OF THE POLICY. SPECIAL EXCLUSIONS TO SECTION Ⅰ A. EXCEPTED CAUSES UNLESS OTHERWISE EXPRESSLY AGREED this insurance does not cover any destruction or damage occasioned by or through or in consequence of or contributed to, directly or indirectly by: 1. Destruction of or damage, costs or expenses in connection with any kind or description of seepage and/or pollution and/or contamination arising from any cause whatsoever. However, if the insured property is the subject of direct physical destruction or damage for which the Insurer have paid or agreed to pay, then this policy (subject to its terms, conditions and limitations) insures against direct physical destruction or damage to the property insured hereunder caused by resulting seepage and/or pollution and/or contamination. The Insured shall give notice to the Insurer of intent to claim no later than 12 months after the date of the original physical destruction or damage. 2. The deliberate and sustained operation of the Insured's plant, machinery, pipeline or other equipment in excess of its design limitations and safe limits on the specific and intentional instructions of the Insured. 3. Withdrawal or go-slow of labor or cessation of work 4. Subsidence, settlement, landslip, shrinkage or expansion or erosion of soil 5. Wear and tear, gradual deterioration, rusting, corrosion, metal fatigue, oxidation, auto-oxidation, damp, change in temperature or humidity, action of air or light or natural heating or drying. 6. Fermentation, evaporation, loss of weight, contamination or change in quality (except where such is directly caused by an occurrence which is not otherwise excluded) - 6 -

8 7. Failure, breakdown, malfunction, derangement, collapse or rupture of any mechanical or electrical or electronic machine, apparatus or equipment whatsoever. 8. Short-circuiting, self-heating, leakage or surge of electrical current, overloading or excessive power. 9. The cost of replacing, repairing or rectifying defective parts, materials, workmanship, design or defect or omission in design or specification or latent defect. 10. Clean-up costs other than as provided under the Debris Removal and Cost of Clean-up Extension. 11. Leakage or overflowing of the contents of any storage tank, vessel or other container of the flaring of products. PROVISO: Notwithstanding the above stated excluded causes this policy shall provide cover for ensuant destruction or damage, which (but for the existence of such exclusion) would otherwise be recoverable hereunder. B. EXCLUDED PROPERTY UNLESS OTHERWISE EXPRESSLY AGREED this insurance does not cover destruction of, or damage to any of the following: 1. cash, bullion, coins, cheques, stamps, precious stones, works of art, antiques, securities, obligations or documents of any kind, books of account or other business books or records, computer records or data, manuscripts, plans, drawings or designs, patterns or models 2. property in course of construction or erection or dismantling or undergoing testing or commissioning including mechanical, performance testing and business interruption resulting therefrom ; nevertheless, this exclusion shall not apply in respect of normal maintenance testing and decommissioning of such property 3. road vehicles, railway rolling stock, water-borne or airborne vessels or craft 4. animals, birds, fish or other living creatures 5. standing timber or growing crops - 7 -

9 6. land (including topsoil, backfill, drainage work, revetment or culverts) roads, driveways, runways, railway lines, canals, dams or tunnels 7. property underground other than tunnels and piping therein, contents of piping, electric facilities and foundations 8. property offshore 9. goods or property in transit 10. catalysts and consumable materials whilst in process, production or manufacture - 8 -

10 SPECIAL EXTENSIONS APPLICABLE TO SECTION Ⅰ DEBRIS REMOVAL AND COST OF CLEAN UP EXTENSION Notwithstanding any provision respecting seepage and/or pollution and/or contamination, and/or debris removal and/or cost of clean up in the policy, in the event of direct physical destruction or damage to the property insured hereunder, this policy (subject otherwise to its terms, conditions and limitations, including but not limited to any applicable deductible) also insures, within the sum insured but not exceeding Refer to the Schedule (a) expenses reasonably incurred in removal of debris of the property insured hereunder destroyed or damaged from the premises of the Insured; and/or (b) cost of clean up, at the premises of the Insured, made necessary as a result of such direct physical loss or damage; Provided that this policy does not insure against the costs of decontamination or removal of water, soil or any other substance on or under such premises. It is a condition precedent to recovery under this extension that the Insurer shall have paid or agreed to pay for direct physical destruction or damage to the property Insured hereunder unless such payment is precluded solely by the operation of any deductible and that the Insured shall give notice to the Insurer of intent to claim for cost of removal of debris or cost of clean up NOT LATER THAN 12 MONTHS AFTER THE DATE OF SUCH PHYSICAL DESTRUCTION OR DAMAGE. AUTHORITIES EXCLUSION Notwithstanding any of the preceding provisions of the debris removal and cost of clean up extension or any provision of the policy, this policy does not insure against loss, damage, costs, expenses, fines of penalties incurred or sustained by or imposed on the Insured at the order of any Government Agency, Court or other Authority arising from any cause whatsoever. TEMPORARY REMOVAL Subject to the following provisions, the property insured by this policy (other than stocks if insured hereby) is covered whilst temporarily removed for cleaning, renovation, repair or other similar purposes, elsewhere on the same or to any other premises and in transit thereto and therefrom by road, rail or inland waterway anywhere in KOREA. The amount recoverable under this extension in respect of each item of the policy shall not exceed the amount which would have been recoverable had the destruction or damage occurred in that part of the premises from which the property is temporarily removed

11 This extension does not apply to property if and so far as it is otherwise insured, nor property held by the Insured in trust, other than machinery and plant. MINOR WORKS CLAUSE It is understood and agreed that this insurance includes minor additions/construction and/or reconstruction work carried out on any of the facilities in respect of contracts not exceeding Refer to the Schedule. This extension shall not apply in respect of alteration/maintenance/ modifications carried out in the normal course of operations (which the Insured so deems) in respect of which cover is granted by this policy subject to all terms and conditions of this policy. Notwithstanding other terms and conditions herein this policy shall only pay in excess of more specific insurance, if any, arranged in respect of minor works. Notwithstanding the above this policy will not respond to any advanced loss of profits. CAPITAL ADDITIONS The insurance by this policy shall, subject to its terms and conditions, extend to cover: (a) any newly acquired buildings, machinery and plant in so far as the same are not otherwise insured, and (b) alterations, additions and improvements to buildings, machinery and plant during the current period of insurance at any of the premises hereby insured, provided that : 1. at any one situation this cover shall not exceed Refer to the Schedule 2. the Insured undertake to give particulars of any such capital additions within 2 months and additional premiums in respect of any amendment as provided for within this clause shall be payable at expiry at daily pro rata of annual rates/premiums agreed by the Insurers at inception or at the time of declaration as applicable. FIRE FIGHTING EXPENSES Insurers agree to pay for fire fighting expenses necessarily and reasonably incurred by the Insured to prevent or minimize the extent of any insured destruction of or damage to the insured property including the cost of materials expended but excluding salaries, wages and similar disbursements to own personnel or personnel on contract or secondment to the Insured and only to the extent that such expenses are not recoverable from a public authority or any other party

12 The cover provided by this extension is limited in amount to Refer to the Schedule and it is agreed and understood that any payment under this extension shall not increase Insurer's total liability under the policy. EXPEDITING EXPENSE In the event of damage to or destruction of insured property by the peril(s) insured against during the term of this policy, the Insurer shall be liable for the reasonable extra cost of temporary repair and of expediting the repair and / or replacement of damaged property, including, but not limited to overtime, night work, work on public holidays, express freight or other rapid means of transportation, but not exceeding Refer to the Schedule each and every loss. SUE AND LABOUR In the event of loss, destruction or damage insured under this policy, the Insurer will indemnify the Insured for any expense or sacrifice incurred as a result of immediate action taken, reasonable at the time of the loss occurrence to minimize such loss, destruction, damage or liability being incurred provided such expenses or sacrifices made are reasonable having regard to the value of the insured property at risk and/or the Insured limit. In the event the action taken was also to protect physical damage to property of the Insured not indemnifiable under this policy, the Insurer's indemnification under this provision shall be proportionate to the value of the property insured, which was immediately and directly endangered by the loss occurrence. Nothing in this clause however shall increase Insurer's total liability for any one loss beyond the limit/sums insured hereon. PUBLIC AUTHORITIES CLAUSE The policy cover includes within the Sum Insured specified in the Schedule, such additional cost of reinstatement of the destroyed or damaged section of the property caused by a contingency insured against as may be incurred solely by reason of the necessity to comply with any regulations, by-laws or statutory provisions relating to the reinstatement of property provided that: The amount recoverable under this extension shall not include: The cost of complying with any such regulation, by-laws or statutory provisions where destruction or damage occurs prior to inception of this Clause, or is not insured by this policy or where notice to comply has been served upon the Insured prior to the occurrence of any destruction or damage in respect of any undamaged sections of the property. The work of reinstatement must be completed within 15 months of the date of occurrence of any loss, destruction or damage, unless otherwise permitted by the Insurers within 15 months and may be carried out wholly or partially upon another site, provided that the liability of the Insurers is not increased thereby

13 ARCHITECTS, SURVEYORS AND CONSULTING ENGINEERS The Sum(s) Insured in the Schedule is/are declared to include an amount for Architects', Surveyors', Consulting Engineers' or other professional fees of similar nature necessarily incurred in the reinstatement of such property consequent upon its loss or damage but not for preparing any claim. This extension, however, is not to supercede or in any way modify any requirements or obligation imposed on the Insured by the conditions of the policy. PROVISIONS APPLYING TO SECTION Ⅰ MEMO 1 - BASIS OF INDEMNIFICATION In the event of destruction of or damage to property insured (other than inventory) hereunder by a contingency insured against, the amount payable under each of the items of the policy shall be calculated on the basis of the reinstatement or replacement of the property destroyed or damaged, subject to the following provisions : Reinstatement or replacement shall mean, (a) Where property is destroyed, the rebuilding of any buildings or the replacement by similar property of any other property, in either case in a condition equal to but not better or more extensive than its condition when new. (b) where property is damaged or destroyed in part only, the repair of the damage and the restoration of the damaged portion of the property to a condition substantially the same as but not better or more extensive than its condition when new. (c) where by reason of the above provisions no payment is to be made for rebuilding or replacement or if the Insured elects not to rebuild or replace, the Insurers will pay to the Insured the actual value of the property at the time of the happening of its destruction or damage. SPECIAL PROVISIONS (to MEMO 1 - BASIS OF INDEMNIFICATION) 1. The work of reinstatement (which may be carried out upon another site and in any manner suitable to the requirements of the Insured subject to the liability of the Insurers not being thereby increased) must be commenced within 12 months of the date of damage, otherwise no payment beyond the amount which would have been payable under this policy if this clause had not been incorporated herein shall be made

14 2. where any property is damaged or destroyed in part only, the liability of the Insurers shall not exceed the sum representing the cost which the Insurers could have been called upon to pay for reinstatement if such property had been wholly destroyed. 3. if at the time of reinstatement the sum representing the cost which would have been incurred in the reinstatement if the whole property covered by such item had been destroyed exceeds the sum insured thereon at the commencement of any destruction of or damage, then the Insured shall be considered as being his own Insurer for the difference between the sum insured and the sum representing the cost of reinstatement of the whole of the property and shall bear a ratable proportion of the loss accordingly. 4. no payment beyond the amount which would have been payable under this policy if this clause had not been incorporated therein shall be made if at the time of any destruction or damage such property shall be covered by any other insurance effected by or on behalf of the Insured which is not upon the identical basis of reinstatement as stated in this policy. 5. if as a result of the application of any of these special provisions no payment is to be made beyond the amount which would have been payable under the policy if this clause had not been incorporated therein, the rights and liabilities of the Insured and Insurer in respect of the destruction or damage shall be subject to the terms and conditions of the policy including any Condition of Average as if this memorandum had not been incorporated therein. MEMO 2 - CERTIFIED VALUATION In consideration of the Insured having commissioned the services of a Professional Surveyor, and having agreed to use the Certified Valuation produced by that surveyor as the basis for calculating the sum(s) insured at inception and at any subsequent renewal for All Property insured hereunder excluding inventory, Insurers agree to delete any Condition of Average that may apply to any Property Damage settlement hereunder. It is further noted and agreed that the Certified Valuation shall make due allowance for inflation during the policy term and that Insurers shall hold covered any increases to the sum(s) insured brought about by inflation. In consideration of that additional cover, the Insured agrees to pay an Additional Premium calculated at 50 percent of the applicable premium rate applied to the increase in sum insured during the policy period. MEMO 3 - INVENTORY / STOCK VALUATION AND DECLARATION / ADJUSTMENT Valuation of Inventory/Stock for the purposes of calculating a loss under this policy shall be the actual value thereof, of like kind and quality at the time of replacement including all cost and duty to be applicable to point of final storage or processing

15 Where an item in respect of Stocks is indicated in the Schedule to be subject to declaration, the following conditions shall apply: 1. The First and Annual Premiums in respect of the item(s) are provisional, being 75% of the estimated premiums, and shall on the expiry of each period of insurance be adjusted as hereinafter provided. 2. The value of the property on the last day of each calendar month shall be declared in writing by the Insured to the Insurer within thirty days thereafter, and if a declaration be not so given the Insured shall be deemed to have declared the maximum sum insured as the value. 3. On the expiry of each period of insurance the actual premium for the said item shall be calculated at the appropriate rate on the average amount declared, i.e. the total of the sums declared divided by the number of declarations. If the actual premium be greater than the First Premium (or in the case of the second and subsequent periods of insurance the Annual Premium) the Insured shall pay the difference: if it be less, the difference shall be repaid to the Insured, but such repayment shall not exceed one third of the First or Annual Premiums respectively. 4. In consideration of the insurance not being reduced by the amount of any claim the Insured shall pay the appropriate extra premium on the amount of the claim from the date thereof to the date of the expiry of the period of insurance. MEMO 4 - LIMITS OF LIABILITY The Limit of Liability shown in the appendix is the most the Insurer will pay for the sum of damage and expenses incurred under Property All Risks Cover Section due to property damage arising out of any one occurrence. MEMO 5 - DEDUCTIBLE If the cover in respect of the property insured or any specified part of such property is indicated in the Schedule as being subject to a deductible, the Insured shall, in respect of each and every occurrence giving rise to a claim, first bear the full amount stated in the Schedule and the Insurer's liability, after taking all other adjustments to the claim presented by the Insured, shall be reduced accordingly. MEMO 6 - DESIGNATION OF PROPERTY For the purpose of determining where necessary, the headings under which any property is insured, the Insurers agree to accept the designation under which such property has been entered in the Insured's Books

16 However, in no event shall this override any of the terms, conditions or exclusions contained or endorsed in this policy. SECTION Ⅱ MACHINERY BREAKDOWN COVER The Insurer agrees that subject to the terms, exceptions, limits and conditions contained herein or endorsed hereon, the Insurer will indemnify the Insured against Breakdown of Property Insured as hereinafter defined. Breakdown shall mean sudden and accidental physical loss or damage necessitating repair or replacement before working can be resumed resulting from 1. defects in material, design, construction, erection or assembly or 2. fortuitous working accidents such as vibration, maladjustment, loosening of parts, molecular fatigue, centrifugal force, abnormal stresses, defective or accidental lack of lubrication, water hammer or local overheating (except in the case of boilers or similar plant when followed by explosion), failure of faults in protection devices, failure or faults in connected machines or 3. excessive or insufficient electrical pressure, failure of insulation, short circuits, open circuits or arcing or the effects of static electricity or 4. incompetence, lack of skill, or negligent acts of employees or third parties or 5. falling, impact, collision or similar occurrences, obstruction or the entry of foreign bodies or 6. any other cause not hereinafter excluded. This Insurance applies whilst the Property Insured is working or at rest or being dismantled or moved for the purpose of cleaning, inspection, overhauling or being re-erected in another position within the Situation shown in the Schedule including during inland transit (including inland waterways) and elsewhere within Korea and as per Temporary Removal Extension. The liability of the Insurer in any Period of Insurance shall not exceed the Sum Insured

17 SPECIAL EXCLUSION TO SECTION Ⅱ The Insurers shall not be liable for 1. loss or damage caused by fire, the extinguishing of a fire, direct lightning, explosion, aircraft and other aerial devices or articles dropped therefrom, collapse of buildings, theft or any attempt thereat. Explosion shall not mean the bursting or disruption of turbines, compressors, engine cylinders, hydraulic cylinders, flywheels or other parts subject to centrifugal force, transformer switches or oil immersed switchgear. 2. (a) wastage of material, wearing away or wearing out of any part of a machine caused by or resulting from ordinary usage, rust, boiler scale or other deposits, corrosion or deterioration due to chemical or atmospheric conditions or otherwise scratching of painted or polished surfaces (b) slowly developing deformation, distortion, cracks, fractures, blisters, laminations, flaws or grooving or the making good of defective tube joints or other defective joints or seams unless such defects result in damage otherwise insured under the policy 3. loss or damage before the property has successfully completed performance testing, running at 100 percent design capacity for an adequate length of time ; or any loss or damage that is directly or indirectly related to an incident during the testing and commissioning period. 4. loss or damage caused by the imposition of abnormal conditions directly or indirectly resulting from testing or willful overload beyond safe limits, or experiments it being understood that bringing up from shutdown shall not be construed as testing 5. loss of use of any machine or consequential loss of any nature whatsoever. 6. loss or damage caused by earthquake, seaquake, tidal wave, subsidence, landslide, rockfall, hurricane, typhoon, cyclone, volcanic eruption or other convulsion of nature, flood, inundation or escape of water from watercontaining apparatus. 7. loss or damage caused by the willful act or willful neglect of the Insured or his representatives. However, acts of malicious damage by employees and/or representatives of the Insured are covered 8. (a) loss of or damage to or loss of use of Property directly or indirectly caused by seepage or pollution (b) the cost of removing, nullifying or cleaning-up, seeping, polluting or contaminating substances

18 9. loss or damage due to any faults or defects known to the Insured at the time this Insurance was arranged and not disclosed to the Insurer. 10. accidental damage indemnifiable under Section Ⅰ of this policy. 11. loss of or damage to foundations and masonry unless specifically included in and described in the Schedule of Machinery, catalysts, exchangeable or replaceable parts and attachments such as flexible drives or tools used for cutting, drilling, grinding, polishing or similar purposes or moulds, patterns pulverizing and crushing surfaces, screens and sieves, engraved cylinders, ropes, chains, belts, elevator and conveyor bands, batteries, tires, connecting wires and cables, flexible pipes, joining and packing materials and all other parts not made of metal (except the insulation of electrical conductors), fuels, filter fillings, cooling media, lubricants, chemicals or other operating media. SPECIAL EXTENSIONS APPLICABLE TO SECTION Ⅱ TEMPORARY REMOVAL Subject to the following provisions, the property insured by this policy (other than stocks if insured hereby) is covered whilst temporarily removed for cleaning, renovation, repair or other similar purposes, elsewhere on the same or to any other premises and in transit thereto and therefrom by road, rail or inland waterway anywhere in Korea. The amount recoverable under this extension in respect of each item of the policy shall not exceed the amount which would have been recoverable had the destruction or damage occurred in that part of the premises from which the property is temporarily removed. This extension does not apply to property if and so far as it is otherwise insured, nor property held by the insured in trust, other than machinery and plant. EXPEDITING COSTS In the event of damage to or destruction of insured property by the peril(s) insured against during the term of this policy, the Insurer shall be liable for the reasonable extra cost of temporary repair and of expediting the repair of damaged property, including, but not limited to overtime, night work, work on public holidays, express freight or other rapid means of transportation, but not exceeding Refer to the Schedule each and every loss

19 ARCHITECTS, SURVEYORS AND CONSULTING ENGINEERS The Sum(s) Insured in the Schedule is/are declared to include an amount for Architects', Surveyors', Consulting Engineers' or other professional fees of similar nature necessarily incurred in the reinstatement of such property consequent upon its loss or damage but not for preparing any claim This extension, however, is not to supercede or in any way modify any requirements or obligation imposed on the Insured by the conditions of the policy. PROVISIONS APPLYING TO SECTION Ⅱ 1. SUM INSURED It shall be a requirement of this policy that the sum insured is equal to the cost of replacement of the insured machinery by new machinery of the same kind and capacity, which means its cost of replacement including, e.g. freight, dues and customs duties, if any, and cost of erection. If the sum insured is less than the amount required to be insured, the Insurers shall pay only in such proportion as the sum insured bears to the amount required to be insured. Every item if more than one shall be subject to this condition separately. 2. BASIS OF INDEMNITY The Insurers will indemnify the Insured in respect of such loss or damage, as hereinafter provided, by payment in cash, replacement or repair (at the Insurers' option) up to an amount not exceeding in any one year of insurance in respect of each of the items specified in the Appendix the sum set opposite thereto and not exceeding in all the total sum expressed in the Appendix as insured hereby. In case of loss or damage, the basis of adjustment unless otherwise endorsed hereon shall be the replacement cost. Replacement cost shall mean all expenses necessarily incurred to repair, rebuild or replace with new materials of like kind and quality including dismantling and re-erection charges incurred for the purpose of effecting repair. Replacement cost shall be determined as of the date of settlement of any claim for loss or damage under this policy. In the event that any property is not repaired, rebuilt or replaced, the basis of adjustment shall be the actual cash value of such Property

20 3. CERTIFIED VALUATION In consideration of the Insured having commissioned the services of Professional Surveyor, and having agreed to use the Certified Valuation produced by that surveyor as the basis for calculating the sum(s) insured at inception and at any subsequent renewal for All Property insured hereunder excluding inventory, Insurers agree to delete any Condition of Average that may apply to any Property Damage settlement hereunder. It is further noted and agreed that the Certified Valuation shall make due allowance for inflation during the policy term and that Insurers shall hold covered any increases to the sum(s) insured brought about by inflation. In consideration of that additional cover, the Insured agrees to pay an Additional Premium calculated at 50 percent of the applicable premium rate applied to the increase in sum insured during the policy period. 4. LIMITS OF LIABILITY The Limit of Liability shown in the appendix is the most the Insurer will pay for the sum of damage and expenses incurred under machinery Breakdown Cover Section due to Machinery Breakdown arising out of any one occurrence. 5. REPAIRS In the event of Breakdown of any Property Insured likely to give rise to a claim hereunder the Insurer shall have the right to take over and control all necessary repairs to be completed to the satisfaction of the Insured. 6. REMOVAL Such insurance as is afforded under this Section of the policy shall also apply while the Property Insured is being removed because of imminent danger of loss or damage

21 SECTION Ⅲ BUSINESS INTERRUPTION COVER SCOPE OF COVER PROPERTY ALL RISKS If during the period of insurance the business carried on by the Insured at the premises specified in this policy is interrupted or interfered with in consequence of an indemnifiable event under the SectionⅠ- Property All Risks Cover of this policy, then the Insurer will indemnify the Insured for the amount of the loss resulting from such interruption or interference in accordance with the provisions of this Section. Such indemnifiable amount shall not exceed the item limits in the appendix to this Section. MACHINERY BREAKDOWN If during the period of insurance the business carried on by the Insured at the premises specified in this policy is interrupted or interfered with in consequence of an indemnifiable event under the SectionⅡ- Machinery Breakdown Cover of this policy, then the Insurer will indemnify the Insured for the amount of the loss resulting from such interruption or interference in accordance with the provisions of this Section. Such indemnifiable amount shall not exceed the item limits in the appendix to this Section. SPECIAL EXCLUSIONS TO SECTION Ⅲ The Insurer shall not be liable for any loss resulting from interruption of or interference with business directly or indirectly attributable to any of the following causes : 1. any local or state ordinance or law regulating construction or repair of buildings or structures 2. the suspension, lapse or cancellation of any lease or licence, contract or order

22 3. any increase of loss due to interference at the described premises by strikers or other persons with rebuilding or replacing the property or with the resumption or continuation of the business. 4. consequential business interruption resulting from works in the course of construction. In any case this policy will not respond to any kind of advanced loss of profit

23 PROVISION APPLYING TO SECTION Ⅲ MEMO 1 - BASIS OF INDEMNIFICATION The cover provided under this clause shall be limited to loss of gross profit due to reduction in turnover and increase in cost of working and the amount payable as indemnity hereunder shall be 1. In respect of reduction in turnover : the sum produced by applying the rate of gross profit to the amount by which the turnover during the indemnity period, in consequence of the accident, falls short of the standard turnover. 2. In respect of increase in cost of working : the additional expenditure necessarily and reasonably incurred for the sole purpose of avoiding or diminishing the reduction in turnover which but for that expenditure would have taken place during the indemnity period in consequence of the accident, but not exceeding the sum produced by applying the rate of gross profit to the amount of the reduction thereby avoided. 3. Less any sum saved during the indemnity period in respect of such of the charges and expenses of the business payable out of the gross profit as may cease or be reduced in consequence of the interruption or interference. 4. Provided that the liability of the Insurers in no case exceeds the total sum insured in the Schedule. MEMO 2 - DEFINITIONS 1. Gross Profit The amount by which the sum of the value of the turnover and the value of the closing stock exceed the sum of the value of the opening stock and the amount of the specified working expenses. The values of the opening and closing stocks shall be arrived at in accordance with the Insured's normal accountancy methods, due provision being made for depreciation

24 2. Specified Working Expenses The variable expenses of the business which are not insured by this clause 1 turnover and purchase taxes 2 purchases (less discounts received) 3 such working expenses as may vary in the event of interruption to or interference with the business. 3. Turnover The money (less discounts allowed) paid or payable to the Insured for goods sold and delivered and for services rendered in the course of the business at the premises. 4. Indemnity Period and Time Excess The period beginning with the occurrence of the Damage and ending not later than the Maximum Indemnity Period thereafter during which the results of the Business shall be affected in consequence of the Damage, provided always that the Insurers are not liable for the amount of loss arising during the time excess. The time excess shall commence at the time of the occurrence of the Damage causing the interruption of or interference with the business

25 5. Rate of Gross Profit to which such adjustments shall be made as The Rate of Gross Profit earned on the Turnover during the financial year immediately before the date of the Damage may be necessary to provide for the trend of the Business and for variations in or other circumstances affecting the Business either before or after the Damage or which would have affected the Business had the Damage 6. Standard Turnover not occurred, so that the figures thus The Turnover during that period in the twelve months immediately before the date of the Damage which corresponds with the Ind- adjusted shall represent as nearly as may be reasonably practicable the results which but for the Damage would have been obtained during the relative period after the Damage. emnity Period 7. Annual Turnover The turnover which the Insured would have been able to obtain but for the accident during the twelve months immediately before either the date when the business is no longer affected or when the indemnity period ends, whichever occurs first. MEMO 3 - SPECIAL PROVISIONS 1. Benefits from Other Premises If during the indemnity period goods are sold or services are rendered elsewhere than at the premises for the benefit of the business either by the Insured or by others acting on his behalf, the money paid or payable in respect of such sales or services shall be taken into account in arriving at the turnover during the indemnity period. 2. Premium Adjustment Clause The first and annual premiums in respect of Gross Profit are provisional being 75% of the premiums payable at the commencement

26 The premium paid shall be adjusted on receipt by Insurers of a declaration of Gross Profit earned during the financial year most nearly concurrent with the period of insurance, to be confirmed by the Insured's auditors if so required by Insurers. If any Damage shall have occurred giving rise to a claim for loss of Gross Profit the above mentioned declaration shall be increased by Insurers for the purpose of premium adjustment by the amount by which Gross Profit was reduced during the financial year solely in consequence of the Damage. If the declaration (adjusted as provided for above and proportionately increased where the Maximum Indemnity Period exceeds 12 months) (a) is less than 75% of the declared value for Gross Profit for the relative period, the Insurers will allow a pro-rata return of premium, provided that such return premium shall not exceed one third of the provisional premium paid. (b) is greater than 75% of the Sum Insured on Gross Profit for the relative period, the Insured shall pay a pro rata additional premium not exceeding one third of the provisional premium paid. In the event that no declaration within 6 months after the expiry of such period of Insurance is received, the balance of 25% shall be paid. 3. Relative Importance The term relative importance referred to in the items insured shall be the percentage effect which a breakdown of a particular machine will have on the total gross profit, disregarding any loss-minimizing measures. If in the event of an accident affecting an insured items the percentage of relative importance stated in the list of machinery and plant insured for this item is lower than the actual percentage of relative importance subsequently arrived at for the period of interruption, the Insurers shall only be liable to indemnify the proportion which the percentage of relative importance stated in the items insured bears to the actual percentage. 4. Departmental Clause If the business be conducted in departments the independent trading results of which are ascertainable, the provisions of clauses 1 and 2 in MEMO 1 of this Section shall apply separately to each department affected by the damage

27 5. Reinstatement of Sum Insured In the event of loss as insured by this policy, and in the absence of written notice by the Insurers of the Insured to the contrary, the amount of the insurance cancelled by loss is to be automatically reinstated as from the date of the occurrence, the Insured undertaking to pay such necessary premium as may be required for such reinstatement from that date. 6. Safe Keeping of Records The Insured shall be obliged to keep complete records. All records, e.g. inventories, production and balance sheets, for the three preceding years shall be held in safe keeping or, as a precaution against their being simultaneously destroyed, the Insured shall keep separate sets of such records. 7. Furnishment of Relevant Documents In the event of a claim being made under this endorsement clause not later than thirty days after the expiry of the indemnity period or within such further times as the Company may allow in writing, the Insured shall at his own expense deliver to the Company a written statement setting forth particulars of his claim together with details of all other policies covering the accident or any part of it or consequential loss of any kind resulting therefrom, and the Insured shall at his own expense also produce and furnish to the Insurer such books of account and other business books, e.g. invoices, balance sheets and other documents proofs, informations, explanation and other evidence as may reasonably be required by the Company for the purpose of investigating or verifying the claim, together with, if required, a statutory declaration of the truth of the claim and or any matters connected therewith. ADDITIONAL MEMORANDA APPLICABLE TO SECTION Ⅲ PAYMENTS ON ACCOUNT Payments on account will be made to the Insured during the Indemnity Period, if desired