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C29860 Annual Fine Art Insurance Premium - E. Johnson Memorial Garden
Contract No. C29860 CITY OF PALM DESERT CITY MANAGER'S OFFICE STAFF REPORT REQUEST: APPROVAL TO FUND THE ANNUAL FINE ART INSURANCE PREMIUM, IN THE AMOUNT OF $10,000, FOR ART SCULPTURES TO BE PLACED IN THE ERIC JOHNSON MEMORIAL GARDEN (SCULPTURE GARDEN) PER THE LEASE AGREEMENT WITH THE PALM SPRINGS ART MUSEUM. (Contract No. C29860) SUBMITTED BY: Stephen Y. Aryan, Risk Manager DATE: February 9, 2012 CONTENTS: Robertson -Taylor (International Insurance Brokers) Invoice No. 30351 Lloyd's of London Specie & Fine Art Practice Ins. Policy No FINFR110 Recommendation By Minute Motion, 1. Approve $10,000 in funding for the annual fine art insurance premium for art sculptures to be placed in the Eric Johnson Memorial Garden, per conditions of the lease agreement with the Palm Springs Art Museum. (Contract C29860) 2. Appropriate $10,000 from the unobligated General Fund Reserves for insurance premium costs. Background The Palm Springs Art Museum -Palm Desert (The Galen) is scheduled to hold its grand opening in March 2012. The lease agreement between the City and the Museum contractually obligates the City to obtain insurance for the artwork going in the non- exclusive use area (Eric Johnson Memorial Garden). As many of these sculptures are on temporary donation with the Museum, it is recommended that the City reimburse the Museum directly and have the artwork insured via their fine art broker. Staff from the California Joint Powers Insurance Authority reviewed the proposed policy and raised no objections. The insurance will be provided by Lloyd's of London and there is no deductible for covered losses, with the exception for those as a result of an earthquake. Any earthquake related loss is subject to a $25,000 deductible per loss. Please note there are some policy exclusions including, wear and tear, inherent vice, nuclear radiation, war, damage due to retouching or conservation processes, insects and vermin, governmental seizure and/or destruction. Staff Report: PSAM-Palm Desert (The Galen) Insurance Premium February 9, 2012 Page 2 of 2 The policy coverage proposed is for while these sculptures are on the premises only, as the Palm Springs Art Museum will insure these sculptures while in transit to and from Palm Desert and during installation. Staff recommends approval of the aforementioned insurance policy and $10,000 annual premium. Fiscal Analysis The proposed artwork that is being installed in the Eric Johnson Memorial Garden (Sculpture Garden) has a value of $3.7 million. City Council approval of the attached insurance policy obligates the City to a $10,000 twelve-month premium. There is a deductible for earthquake losses only of $25,000 p/loss. All other covered losses are not subject to a deductible. There was the option to purchase Terrorism coverage at an annual $1,000 premium. However, staff and the California JPIA's representative do not believe it is necessary and do not recommend purchasing this additional coverage. Submitted By: Steph&n Y Reviewed By: an, Risk Manager CITY COUNCIL A4TION APPROVED DENIED RECEIVED OTHER, MEETING DA AYES:dM5W.Ltlef NOES: UcWL ABSENT: ISLWC ABSTAIN: KLAr VERIFIED BY: KL Original on File with Paul S. Gibson, Director of Finance/City Treasurer Approved By: Wohlmuth, City Manager 's Office Robertson Taylor -Los Angeles 15260 Ventura Blvd Ste 2230 Sherman Oaks, CA 91403 Phone: 818-815-2600 Palm Desert, City of Stephen Aryan, Risk Mgr. 73-510 Fred Waring Dr. Palm Desert, CA 92260-2578 Itm # INVOICE # INVOICE# 30351 Pagel ACCOUNT NO. OP DATE PALMD-1 BK 01/31/12 Inland Marine POLICY # TBA COMPANY Lloyds of London PRODUCER Victoria S. France EFFECTIVE EXPIRATION BALANCE DUE ON 01/31/12 01/31/13 01/31/12 AMOUNT PAID AMOUNT DUE $ 10,000.00 Due Date Trn Type Description 30351 136959 01/31/12 NEW FINE Exhibition Coverage $ Invoice Balance: $ Please Make Check Payable To Robertson Taylor NA, Inc. Amount 10,000.00 10,000.00 Specie & Fine Art Practice Policy Number FINFR110 Assured City of Palm Desert and/or Palm Springs Art Museum Reassured File Name For LPSO use For ILU use For LIRMA use Policy Number FINFR110 Assured / account City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 RISK DETAILS UNIQUE MARKET B0713FINFR110 REFERENCE: TYPE: Fine Arts All Risks of Direct Physical loss or Damage INSURED: City of Palm Desert and/or Palm Springs Art Museum as theit interests may appear ADDRESS: 73-510 Fred Waring Drive, CA 92260, USA PERIOD: From date tba to date tba, both days at 00.01am, Local Standard Time at the principal address. PROPERTY INSURED: Fine Arts of whatsoever nature as per schedule held in the office of Robertson Taylor. SUM INSURED: USD 3,700,000 each and every loss whilst in the Garden at The Palm Springs Art Museum, 72-567 Highway 111, Palm Desert, CA 92260. USD Nil each and every loss whilst at any other location worldwide USD Nil any one transit worldwide USD 3,700,000 Aggregate limit of liability in respect of Earthquake DEDUCTIBLES: USD Nil but USD 25,000.00 each and every loss in respect of loss or damage directly caused by earthquake. SITUATION: Whilst at the premises mentioned under Sum Insured above only. CONDITIONS: Wording as attached Terrorism Exclusion Endorsement - NMA2920 (as attached) Service of Suit Clause (USA) naming Mendes and Mount Los Angeles (as attached) U.S Terrorism Risk insurance Act 2002 Amended Not purchased Clause LMA 5092(as attached) Deductible Endorsement Clause (as attached) Deductible Clause (Earthquake) (as attached) Institute Radioactive Contamination, Chemical, Biological, Bio- Chemical and Electromagnetic Weapons Exclusion Clause City of Palm Desert short (3).docx Policy Number FINFR110 Assured / account City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 10/11/03 CL370 (as attached) Institute Cyber Attack Exclusion Clause 10/11/03 CL380 (as attached) Insurers Liability Clause LMA 3333 Amended (as attached) Sanction Limitation and Exclusion Clause JC2010/014 (as attached) CHOICE OF LAW & This insurance shall be governed by and construed in accordance JURISDICTION: with the law of California and each party agrees to submit to the exclusive jurisdiction of the courts of USA (Subject to the provisions of the Service of Suit Clause as attached.) PREMIUM: USD 10,000 per annum PAYMENT TERMS: Premium Payment Clause LSW3000 (60 days)(amended) — copy attached. TAXES PAYABLE BY INSURED AND ADMINISTERED BY UNDERWRITERS: The Underwriters are Surplus Lines Underwriters. Compliance with applicable laws, payment of taxes (including Surplus Lines Tax and Federal Excise Tax) , etc are the responsibility of the Insured U.S Agent or broker. RECORDING TRANSMITTING & STORING INFORMATION: Where Lockton Companies LLP maintains risk and/or claim data/information/documents they may hold such data/information/documents electronically. INSURER CONTRACT DOCUMENTATION: This document details the contract terms entered into by the insurer(s) and constitutes the contract documentation. NOTICES: California Statutory Notice LSW 1147c City of Palm Desert short (3).docx 2 Policy Number FINFR110 INFORMATION Assured City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 INFORMATION N. Lieberman & Associates report 10/12/2011 seen by Underwriters. City of Palm Desert short (3).docs Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 MUSEUM FINE ART AND COLLECTIONS INSURANCE MUSEUM COLLECTION AND LOANS Property Covered: This Certificate covers Fine Arts and collectible objects of every description including but not limited to paintings, etchings, drawings (including their frames, glasses and shadow boxes), photographs, ceramics, sculpture, pottery, rare books, manuscripts, rugs, tapestries, statuary, and other bonafide works of art, or rarity, historic value, or artistic merit, and all associated property including but not limited to frames, crates, installation and de -installation materials all constituted as follows:- (1) Museum Collection: (a) Property of the Insured; (b) Property of others offered as gifts to the Insured or for sale to the Insured and whilst awaiting formal acceptance by the Trustees; (c) The Insured's interest in residuary gifts and jointly owned property, but only to the extent of the Insured's interest therein at time of loss or damage; while on exhibition or otherwise, and while in transit within and between the continental United States, Alaska, Hawaii, the District of Columbia and Canada: (2) Loans: Property of others loaned to the Insured and which the Insured has been instructed to insure, covering said property on a "wall to wall" basis from the time said property is removed from its normal repository, incidental to shipment, until returned thereto or other point designated by the owner or their agent prior to return shipment, including while in transit and while on exhibition or otherwise within and between the continental United States, Alaska, Hawaii, the District of Columbia and Canada. It is further understood and agreed that all lenders insured under Loans shall be granted "Additional Insured" status for their respective rights and interests. INTERNATIONAL TRANSPORTATION AND EXHIBITION Property Covered: This Section covers the property of the Insured or property of others which the Insured has been instructed to insure while at locations outside the continental United States, Alaska, Hawaii, the District of Columbia and Canada and while in transit to and from points and places outside the continental United States, Alaska, Hawaii, the District of Columbia and Canada, attaching from time such property shall become at the risk of the Insured and covering until the Insured's interest in such property shall cease. Prior notification is required by Underwriters for any shipment by ocean going vessel. City of Palm Desert short (3).docx Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museurn Unique market reference number B0713FINFR110 EXTENSION OF COVERAGE 1. Legal Liability: This insurance covers the Insured's legal liability as bailee of all loan (borrowed) property which the Insured has been instructed in writing not to insure (all other loan (borrowed) property shall be regarded as Temporary Loans). In the event of loss by a covered cause of loss to such property, Underwriters will provide a defense for legal proceedings brought against the Insured. In the event of any action involving the Insured for loss or damage to such property, Underwriters hereof will:- (1) Pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay by reason of liability imposed upon the Insured as bailee, for loss or destruction of, or damage to property of others occurring while this insurance remains in effect. (2) Pay the Insured's expenses incurred for the removal of all debris of damaged property for which the Insured's liability is insured in (1) above, resulting from loss insured against herein (but such debris removal cost shall not enter into determination of the said property's value nor shall such expense be in addition to the limit of coverage otherwise provided hereunder). The Insured shall not voluntarily assume any liability nor incur any expense nor settle any claim except at the Insured's own expense. The Insured shall not interfere in any negotiation for settlement nor in any legal proceedings, but whenever requested and at Underwriters's expense the Insured shall aid in securing information and evidence and the attendance of witnesses, and shall cooperate with Underwriters, except in a pecuniary way, in all matters which Underwriters may deem necessary in defense of any suit or in the prosecution of any appeal. Underwriters shall not be liable under this section for more than the sum stated on the Declaration Page, the aggregate in any one loss. 2. U.S. Indemnity Deductible Coverage: It is hereby understood and agreed that this Certificate can be used to cover any US Indemnity Deductible up to US$400,000 and shall follow the terms and conditions of the U.S. Arts & Artifacts Indemnity Certificate wording. The exclusions for War 1 (2) and Nuclear Reaction 1, (3) contained within this Certificate shall still be in effect under this coverage, although not excluded by the U.S. Arts and Artifacts Indemnity Certificate wording. The amount payable is in addition to the limits of liability shown on the Declaration Page. No deductible applies to this coverage. City of Palm Desert short (3).docx 2 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 3. Debris Removal: It is agreed that this Certificate covers expenses incurred for the removal of all debris of the property covered hereunder which may be occasioned by loss by any of the perils insured except that Underwriters shall not be liable under this Certificate or clause for such cost amounting to more than 10% of the insured value of the property lost and/or damaged, it being agreed that this indemnity is included in the overall limit agreed hereunder. 4. Registration Papers and Records: Underwriters will pay up to US$15,000 in any one loss for your cost to research, replace, or restore lost or damaged papers and records used to conduct the administrative functions of the registrar's office (or similar office), including those that are on computer software, for which there are no duplicates. The amount payable is in addition to the limits of liability shown on the Declaration Page. No deductible applies to this coverage. 5. Cost of Preparing Inventory: In the event of loss by a covered cause of loss to covered property, Underwriters will pay the Insured's necessary expense to prepare a complete inventory of the damaged and undamaged property including: (1) Quantities; (2) Costs; (3) Values; and (4) Amount of loss claimed. The most that Underwriters will pay under this extension is US$15,000. The amount payable is in addition to the limits of liability shown on the Declaration Page. No deductible applies to this coverage. 6. Reward Coverage: Underwriters will reimburse the Insured for reward(s) expense they have incurred leading to: (1) The successful return of undamaged stolen articles to a law enforcement agency; or (2) The arrest and conviction of any person(s) who have damaged or stolen any covered property. Prior to the application of any deductible and recovery, Underwriters will pay 25% of the covered loss, up to US$25,000 in any one occurrence for the reward payments the Insured makes. These reward payments must be documented. The amount payable is in addition to the limits of liability shown on the Declaration Page. No deductible applies to this coverage. 7. Fire Department Service Charge: When the Fire Department is called to save or protect covered property from a covered cause of loss, Underwriters will pay up to US$25,000 for the Insured's liability for Fire Department Service Charges: (1) Assumed by contract or agreement prior to loss; City of Palm Desert short (3).docx 3 Policy Number FINFR110 Assured City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 or (2) Required by local ordinance The amount payable is in addition to the limits of liability shown on the Declaration Page. No deductible applies to this additional coverage. 8. Fire, Extinguishing System Discharge Coverage: It is hereby understood and agreed that Underwriters shall pay, up to US$25,000 in any one occurrence, the cost to refill the Insured's fire extinguishing systems which protect the covered property when they discharge as intended to control a loss covered by this Certificate. In addition, Underwriters agree to pay, up to US$25,000 in any one occurrence, the cost to refill these systems should they accidentally discharge. Underwriters shall not be liable for discharge that happens at the time of installation, testing, repair or recharging of the fire extinguishing system. The amount payable is in addition to the limits of liability shown on the Declaration Page. No deductible applies to this coverage. 9. Property of Others Held for Sale: Underwriters will pay up to US$15,000 in any one loss to property of others held for sale by you for the owner. But Underwriters will not pay for loss to such property if the property has been held by the Insured for more than 90 days, unless the insured has requested (in writing, and with the approval of Underwriters) and obtained an extension beyond 90 days. The amount payable is included in the overall limits of liability shown on the Declaration Page. EXCLUSIONS 1. This Certificate does not insure against loss or damage caused by: (1) Wear and tear, gradual deterioration, moths, vermin, inherent vice, or loss or damage sustained due to or resulting from any repairing, restoration, or retouching process. (2) (a) Hostile or warlike action in time of peace or war, including action hindering, combating or defending against an actual, impending or expected attack, (i) by any government or sovereign power (de jure or de facto); or by any authority maintaining or using military, naval or air forces; or (ii) by military, naval or air forces; or (iii) by an agent of any such government power, authority of forces; City of Palm Desert short (3).docx 4 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art ;Museum Unique market reference number B0713FINFR110 (b) any weapon of war employing atomic fission or radioactive force whether in time of peace or war; or (c) insurrection, rebellion, revolution, civil war, usurped power, or action taken by governmental authority in hindering, combating or defending against such an occurrence; (d) seizure or destruction under quarantine or customs regulations, confiscation by order of any Government or public authority, or risks of contraband or illegal transportation or trade. This exclusion shall not apply to international transits via air and sea, which are subject to London Institute Clauses CL 252, 255, 256, 257, 258, 259 and 260 as applicable. (3) Nuclear reaction or nuclear radiation or radioactive contamination, all whether controlled or uncontrolled and whether such loss be direct or indirect, proximate or remote, or be in whole or in part caused by, contributed to, or aggravated by the perils insured against in this Certificate; however, subject to the foregoing and all provisions of this Certificate, direct loss by fire resulting from nuclear reaction or nuclear radiation or radiation or radioactive contamination is insured against by this Certificate. 2. This Certificate does not cover shipments by mail unless by Registered First Class mail. GENERAL CONDITIONS 1. Certificate Term: This Certificate shall attach at 12:01 A.M. Standard Time at the place of the Insured's premises as shown on the Declaration Page or 12:01 A.M. Standard Time at the place of first transit movement for exhibitions, whichever shall come first. This Certificate covers losses payable hereunder for the term indicated. 2. Perils Insured Against: Risks of direct physical loss or damage from any external cause, except as herein excluded. Loss, if any, payable to the Insured or order. 3. Limits of Liability: Underwriters shall not be liable for more than the sums stated on the Declaration Page or sums stated elsewhere in this Certificate. 4. Deductible: Each claim for loss or damage separately occurring shall be adjusted separately and from the amount of such adjusted claim the sum which is stated on the Declaration Page shall be deducted. This Clause shall only apply, however, to property described in Museum Collections; paragraph 1(a), (b) and (c), while at the premises of the Insured. 5. Premium: The premium for the Certificate year stated on the Declaration Page shall be due and payable as of attachment hereof. City of Palm Desert short (3).docx 5 Policy Number FINFR110 City of Palm Desert and/or Palm Springs ?art Museum Unique market reference number B0713FINFR110 6. Misrepresentation and Fraud: This Certificate shall be void if the Insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or in case of any fraud, attempted fraud or false swearing by the Insured touching any matter relating to this insurance, or the subject thereof, whether before or after a loss. 7. Notice of Loss: The Insured shall as soon as practicable report to Underwriters or their agent every loss or damage which may become a claim under this Certificate and shall also file with Underwriters or their agent within ninety (90) days from the time loss is discovered, a detailed sworn proof of loss. Failure by the Insured to report the said loss or damage and to file such sworn proof of loss as herein before provided shall invalidate any claim under this Certificate for such loss. 8. Basis of Valuation: It is understood and agreed that in event of loss or damage hereunder all property coming under the protection of this insurance shall be valued at and insured hereunder as follows: (1) On property of the Insured Underwriters shall not be liable beyond the current market value of the property at the time any loss or damage occurs. The loss or damage shall be ascertained or estimated according to such current market value. (2) Property acquired or to be acquired by the Insured as a gift or under wills or similar bequests shall be valued at the current market value at time loss or damage occurs. In no event, however, shall this Certificate cover such property beyond the Insured's interest therein and in the event of loss such property interest of the Insured at time of loss shall be that as stipulated in the will, bequest, contract or other document executed between the Insured and donor of said property. (3) Property of others loaned to the Insured, and which the Insured has been instructed to insure or for which the Insured may be liable, shall be valued at amounts agreed upon by the Insured and owners, or otherwise Underwriters shall not be liable beyond the current market value of the property at the time any loss or damage occurs and in no event for an amount in excess of that specified in the Certificate. (4) With respect only to loans from the Library of Congress, Washington, DC, the Library of Congress shall have the right to elect to receive reimbursement in the form of property of a similar nature to that insured herein, such property to be acquired by the Library of Congress within one (1) year from the date of loss as satisfactory replacement of the loss or damaged property for which loss is payable hereunder. In the event of such election, Underwriters shall bear the cost of such property acquired by the Library of Congress. Ascertainment or estimate of loss shall be made by the Insured and Underwriters, or if they differ then the amount of loss will be determined as provided by the Arbitration Clause of the Certificate. City of Palm Desert short (3).docx Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 9. Settlement of Claims: All adjusted claims shall be paid or made good to the Insured within thirty (30) days after presentation and acceptance of satisfactory proof of interest and loss at the office of Underwriters. 10. Automatic Reinstatement: The amount of insurance and the applicable limits of liability shall be reduced by the amount of loss payment but said amount shall be reinstated at the time of loss without additional premium. The proportionate part of the whole Certificate premium represented by any such payment, however, shall then be fully earned by Underwriters. 11. Partial Loss: In case of partial loss due to the perils insured against, the amount of loss shall be the cost and expense of restoration including any additional charges associated with such restoration. Depreciation if any, after restoration, to be agreed upon between the Insured and Underwriters but in no event shall Underwriters be liable for more than the insured value of the property. 12. Arbitration: if the Insured and Underwriters fail to agree as to the amount of loss, each shall, on the written demand of either made within sixty (60) days after receipt of proof of loss by Underwriters, select a competent and disinterested appraiser, and the appraisal shall be made at a reasonable time and place. The appraisers shall first select a competent and disinterested umpire, and failing for fifteen (15) days to agree upon such umpire, then on the request of the Insured or Underwriters, such umpire shall be selected by a judge of a court of record in the state in which such appraisal is pending. The appraisers shall then appraise the loss, stating separately the current market value at the time of loss (if applicable) and the amount of loss, and failing to agree shall submit their difference to the umpire. An award in writing of any two shall determine the amount of loss. The Insured and Underwriters shall each pay his/her or its chosen appraiser and shall bear equally the other expenses of the appraisal and umpire. Underwriters shall not be held to have waived any of its rights by any act relating to appraisal. 13. Privilege to Adjust with Owner: In the event of loss of property of others (insured hereunder) held by the Insured for loss of which claim is made upon Underwriters, the right to adjust such loss with the owner or owners of the property is reserved to Underwriters, subject, however to prior consent by the Insured. A receipt for payment from the owners of that property will satisfy any claim of the Insured. If legal proceedings are taken to enforce a claim against the Insured, Underwriters reserve the right to provide a defense, at their option, of, and in the name of, the Insured. If provided, the expense of this defense will be at the cost of Underwriters and will not reduce the applicable limit of liability under this insurance. City of Palm Desert short (3).docs Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 14. Examination Under Oath: The Insured shall submit, and so far as is within his/her or their power, shall cause all other persons interested in the property and members of the household and employees to submit to examinations under oath by any persons named by Underwriters, relative to any and all matters in connection with a claim and subscribe the same; and produce for examination all books of account, bills, invoices, and other vouchers or certified copies thereof if originals be lost, at such reasonable time and place as may be designated by Underwriters or their representatives, and shall permit extracts and copies thereof to be made. 15. Pairs and Sets: In the event of the total loss of any articles which are part of a pair or set, Underwriters agree to pay the Insured, at the option of the Insured, the full amount of the value of such pair or set as determined by the Valuation Clause contained herein, subject otherwise to the applicable Deductible clause set forth herein, and the Insured agrees, if such option is elected, to surrender the remaining article or articles of the pair or set to Underwriters. 16. Loss Buy Back: The Insured shall have the right to repurchase from Underwriters property of the Insured that is recovered for the amount paid to the Insured for the loss, plus an amount which represents loss adjustment and recovery expense. Damaged property of the Insured, for which a total loss has been paid, may be repurchased by the Insured at the then fair market value of the damaged property. Underwriters agree to notify the Insured of its right to repurchase damaged or recovered property and the Insured shall have sixty (60) days from date of notice to exercise the repurchase right. The Insured, in exercising this right, shall furnish Underwriters with copies of the proof of loss, police report and claim draft involving such property. 17. Currency Fluctuation: The values applied to this Certificate may be insured in foreign currency insofar as such insurance is authorized by applicable law and regulations. For the purpose of application of the maximum limits fixed in the Certificate in U.S. Dollars, the foreign currencies shall be converted into Dollars at the rates in effect on the date of the declaration of insured interest. The values thus applied shall thereinafter remain covered for the amount insured in foreign currency, notwithstanding subsequent fluctuations in the rate of exchange. 18. Value Declared to Carriers: It is understood and agreed that any property insured hereunder while in transit may be dispatched under a declaration as being "without artistic value", the values declared in such cases being only nominal values. 19. Packing: It is a condition of this insurance that the Insured will, to the best of their ability, provide for the insured property being packed and unpacked by competent packers. City of Palm Dcscrt short (3).docz 8 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 20. Excess Insurance: Permission is granted to the Insured to have excess insurance over the limit of liability set forth in this Certificate without prejudice to this Certificate, nor shall the existence of such insurance, if any, reduce any liability under this liability. 21. No Benefit to Bailee: This insurance shall in no way inure directly or indirectly to the benefit of any carrier or other bailee. 22. Sue and Labor: In case of loss or damage, it shall be lawful and necessary for the Insured, his/her or their factors, servants and assigns, to sue, labor and travel for, in and about the defense, safeguard and recovery of property insured hereunder or any part thereof without prejudice to this insurance; nor shall the acts of the Insured or Underwriters in recovering, saving and preserving the property insured in case of loss or damage, be considered a waiver or an acceptance of abandonment to the charge whereof Underwriters will contribute according to the rate and quantity of the sum herein insured. 23. Suit Against Underwriters: No suit, action or proceeding for the recovery of any claim under this Certificate shall be sustainable in any court of law or equity unless the same be commenced within twelve (12) months next after discovery by the Insured of the occurrence which gives rise to the claim. Provided, however, that if by the laws of the state within which this Certificate is issued such a limitation is invalid, then any such claims shall be void unless such action suit or proceeding be commenced within the shortest limit of time permitted by the laws of such state to be fixed herein. 24. Collection From Others: No loss shall be paid hereunder if the Insured has collected the same from others. 25. Subrogation: In the event of any payment under this Certificate Underwriters shall be subrogated to all the Insured's rights of recovery therefor against any person or organisation and the Insured shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The Insured shall do nothing after loss to prejudice such rights. This clause shall not apply, however, to museums in which the insured property is being exhibited or on loan, and any competent and/or professional carrier, packer, or any other bailee with whom the Insured has waived such right prior to any loss or damage. 26. Changes: Notice to any agent or knowledge possessed by any agent or by any other person shall not effect a waiver or a change in any part of this Certificate or stop Underwriters from asserting any right under the terms of this Certificate, nor shall the terms of this Certificate be waived or changed, except by endorsement issued to form a part of this Certificate. 27. Cancellation: This Certificate may be cancelled by either the Insured or Underwriters on giving sixty (60) days notice in writing to the other, and upon such cancellation the Insured shall furnish to Underwriters a complete statement of the insured property and pay premium to date of cancellation as provided. City of Palm Desert short (3).docx Policy Number FINFR110 City of Palm Desert and/or Patna Springs Art Museum Unique market reference number B0713FINFR110 28. Each Underwriter: The interest of each Underwriter hereunder is individual and not joint, and whenever the right or privilege is retained by Underwriters, such right or privilege may be exercised by each Underwriter independently. In the event of litigation subscribers hereto, upon request, agree to issue separate policies covering their subscription. 29. Required By Law: Any provisions required by law to be stated in policies issued by subscribers hereto shall be deemed to have been stated herein. 30. Other Insurance: If there is any other valid and collectible insurance covering the property insured hereunder, whether prior, subsequent to, or simultaneous with this insurance, which in the absence of this insurance would cover the loss or damage hereby covered, Underwriters shall not be liable hereunder for more than the excess over and above such otherinsurance. This Clause, however, shall not apply to insurance effected by owners of property loaned to the Insured and the existence of such insurance or payment of a loss thereunder shall not constitute a defense to any claim otherwise payable under this Certificate, nor shall such insurance be called on to contribute to any loss payable hereunder. City of Palm llcscrt short (3).docx 10 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 SHORT RATE CANCELLATION TABLE FOR TERM OF ONE YEAR Days Per Cent. of Insuranc One Year e in Premium Force 1......................................... 5 2......................................... 6 3 - 4......................................... 7 5 - 6......................................... 8 7- 8......................................... 9 9- 10......................................... 10 11- 12......................................... 11 13- 14......................................... 12 15- 16......................................... 13 17- 18......................................... 14 19- 20......................................... 15 21- 22......................................... 16 23- 25......................................... 17 26- 29......................................... 18 30- 32 (1 19 month) .......................... 33- 36......................................... 20 37- 40......................................... 21 41- 43......................................... 22 44- 47......................................... 23 Days Per Cent. of Insuran One Year ce in Premium Force 154- ......................................... 53 156 157- ................. I....................... 54 160 161- ......................................... 55 164 165- ......................................... 56 167 168- ......................................... 57 171 172- ......................................... 58 175 176- ............................. I........... 59 178 179- (6 60 182 months) ........................ 183- ......................................... 61 187 188- ......................................... 62 191 192- ......................................... 63 196 197- ......................................... 64 200 201- ......................................... 65 205 206- ...................................... 66 209 210- (7 67 214 months) ........................ 215- ......................................... 68 218 219- ......................................... 69 223 224- ......................................... 70 228 229- ......................................... 71 232 City of Palm Desert short (3).docx Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 48- 51 ......................................... 24 233- ......................................... 72 237 52- 54 ......................................... 25 238- ......................................... 73 241 55- 58 ......................................... 26 242- (8 74 246 months) ........................ 59- 62 (2 27 247- ......................................... 75 months) ........................ 250 63- 65 ......................................... 28 251- ......................................... 76 255 66- 69 ......................................... 29 256- ......................................... 77 260 70- 73 ......................................... 30 261- ......................................... 78 264 74- 76 ......................................... 31 265- ......................................... 79 269 77- 80 ......................................... 32 270- (9 80 273 months) ........................ 81- 83 ......................................... 33 274- ......................................... 81 278 84- 87 ......................................... 34 279- ......................................... 82 282 88- 91 (3 35 283- ......................................... 83 months) ........................ 287 92- 94 ......................................... 36 288- ........... I............................. 84 291 95- 98 ......................................... 37 292- ......................................... 85 296 99-102 ......................................... 38 297- ......................................... 86 301 103-105 ......................................... 39 302- (10 87 305 months) ...................... 106-109 ......................................... 40 306- ......................................... 88 310 110-113 ......................................... 41 311- ......................................... 89 314 114-116 ......................................... 42 315- ......................................... 90 319 117-120 ......................................... 43 320- .......... I.............................. 91 323 121-124 (4 44 324- ......................... I............... 92 months) ........................ 328 125-127 ......................................... 45 329- ......................................... 93 332 128-131 ......................................... 46 333- (11 94 City of Palm Descrt short (3).docs 12 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museurn Unique market reference number B0713FINFR110 337 months) ...................... 132-135......................................... 47 338- ......................................... 95 342 136-138......................................... 48 343- ......................................... 96 346 139-142......................................... 49 347- ............ I........................... 97 351 143-146......................................... 50 352- ......................................... 98 355 147-149......................................... 51 356- ......................................... 99 360 150-153 (5 52 361- (12 100 months) ........................ 365 months)...................... Rules applicable to insurance with terms less than or more than one year: A. If insurance has been in force for one year or less, apply the short rate table for annual insurance to the full annual premium determined as for an insurance written for a term of one year. B. If insurance has been in force for more than one year: 1. Determine full annual premium as for insurance written for a term of one year. 2. Deduct such premium from the full insurance premium, and on the remainder calculate the pro rata Earned Premium on the basis of the ratio of the length of time beyond one year the insurance has been in force to the length of time beyond one year for which the policy was originally written. 3. Add premium produced in accordance with items (1) and (2) to obtain Earned Premium during full period insurance has been in force. NN �2463 TERRORISM EXCLUSION ENDORSEMENT Notwithstanding any provision to the contrary within this insurance or any endorsement thereto it is agreed that this insurance excludes loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, resulting from or in connection with any act of terrorism City of Patm Desert short (3).docx 13 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 regardless of any other cause or event contributing concurrently or in any other sequence to the loss. For the purpose of this endorsement an act of terrorism means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organisation(s) or government(s), committed for political, religious, ideological or similar purposes including the intention to influence any government and/or to put the public, or any section of the public, in fear. This endorsement also excludes loss, damage, cost or expense of whatsoever nature directly or indirectly caused by, resulting from or in connection with any action taken in controlling, preventing, suppressing or in any way relating to any act of terrorism. If the Underwriters allege that by reason of this exclusion, any loss, damage, cost or expense is not covered by this insurance the burden of proving the contrary shall be upon the Assured. In the event any portion of this endorsement is found to be invalid or unenforceable, the remainder shall remain in full force and effect. NMA2920 08/10/2001 U.S. TERRORISM RISK INSURANCE ACT OF 2002 AS AMENDED Not Purchased Clause This Endorsement is issued in accordance with the terms and conditions of the "U.S. Terrorism Risk Insurance Act of 2002" as amended as summarised in the disclosure notice. City of Palm Desert short (3).docx 14 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 It is hereby noted that the Underwriters have made available coverage for "insured losses" directly resulting from an "act of terrorism" as defined in the "U.S. Terrorism Risk Insurance Act of 2002", as amended ("TRIA") and the Insured has declined or not confirmed to purchase this coverage. This Insurance therefore affords no coverage for losses directly resulting from any "act of terrorism" as defined in TRIA except to the extent, if any, otherwise provided by this policy. All other terms, conditions, insured coverage and exclusions of this Insurance including applicable limits and deductibles remain unchanged and apply in full force and effect to the coverage provided by this Insurance. LMA5092 21/12/2007 Form approved by Lloyd's Market Association and model agreed by the International Underwriting Association INSTITUTE RADIOACTIVE CONTAMINATION, CHEMICAL, BIOLOGICAL, BIO-CHEMICAL AND ELECTROMAGNETIC WEAPONS EXCLUSION CLAUSE This clause shall be paramount and shall override anything contained in this insurance inconsistent therewith City of Palm Desert short (3).docx 15 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art :Museum Unique market reference number B0713FINFR110 1. In no case shall this insurance cover loss damage liability or expense directly or indirectly caused by or contributed to by or arising from 1.1 ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel 1.2 the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof 1.3 any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter 1.4 the radioactive, toxic, explosive or other hazardous or contaminating properties of any radioactive matter. The exclusion in this sub -clause does not extend to radioactive isotopes, other than nuclear fuel, when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful purposes 1.5 any chemical, biological, bio-chemical, or electromagnetic weapon. 10/11/03 CL370 © Copyright The Institute of London Underwriters INSTITUTE CYBER ATTACK EXCLUSION CLAUSE 1.1 Subject only to clause 1.2 below, in no case shall this insurance cover loss damage liability or expense directly or indirectly caused by or contributed to by or arising from the use or operation, as a means for inflicting harm, of any computer, computer system, computer software programme, malicious code, computer virus or process or any other electronic system. City of Palm Desert short (3).docx 16 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 1.2 Where this clause is endorsed on policies covering risks of war, civil war, revolution, rebellion, insurrection, or civil strife arising therefrom, or any hostile act by or against a belligerent power, or terrorism or any person acting from a political motive, Clause 1.1 shall not operate to exclude losses (which would otherwise be covered) arising from the use of any computer, computer system or computer software programme or any other electronic system in the launch and/or guidance system and/or firing mechanism of any weapon or missile. 10/11/03 CL380 C Copyright The Institute of London Underwriters SERVICE OF SUIT CLAUSE It is agreed that in the event of the failure of the Underwriters hereon to pay any amount claimed to be due hereunder, the Underwriters hereon, at the request of the Insured (or Reinsured), will submit to the jurisdiction of a Court of competent jurisdiction within the United States. Nothing in this Clause constitutes or should be understood to constitute a waiver of Underwriters' rights to commence an action in any Court of competent jurisdiction in the United States, to remove an action to a United States District Court, or to seek a transfer of a case to another Court as permitted by the laws of the United States or of any State in the United States. It is further understood and City of Palm Dcscrt short (3).docx 17 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 agreed that service of process in such suit may be made upon Mendes & Mount, 725 South Figueroa Street, California, 90017, U.S.A., and that in any suit instituted against any one of them upon this contract, Underwriters will abide by the final decision of such Court or of any Appellate Court in the event of an appeal. The above -named are authorized and directed to accept service of process on behalf of Underwriters in any such suit and/or upon the request of the Insured (or Reinsured) to give a written undertaking to the Insured (or Reinsured) that they will enter a general appearance upon Underwriters' behalf in the event such a suit shall be instituted. Further, pursuant to any statute of any state, territory or district of the United States which makes provision therefor, Underwriters hereon hereby designate the Superintendent, Commissioner or Director of Insurance or other officer specified for that purpose in the statute, or his successor or successors in office, as their true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the Insured (or Reinsured) or any beneficiary hereunder arising out of this contract of insurance (or reinsurance), and hereby designate the above -named as the person to whom the said officer is authorized to mail such process or a true copy thereof. LLOYD'S PRIVACY POLICY STATEMENT (LSW 1135) INSURERS AT LLOYD'S, LONDON We, The Certain Insurers at Lloyd's, London that have underwritten this insurance want you to understand how we protect the confidentiality of non-public personal information we collect from you. INFORMATION WE COLLECT We collect non-public personal information about you from the following sources: a) Information we receive from you on applications or other forms. City of Palm Desert short (3).docs 18 Policy Number City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 b) Information about your transactions with our affiliates, others or us; and c) Information we receive from a consumer— reporting agency. INFORMATION WE DISCLOSE We do not disclose any non-public personal information about you to anyone except as is necessary in order to provide our products or services to you or otherwise as we are required or permitted by law (e.g., a subpoena, fraud investigation, regulatory reporting etc.) CONFIDENTIALITY AND SECURITY We restrict access to non-public personal information about you to our employees, our affiliates' employees or others who need to know that information to service your account. We maintain physical, electronic, and procedural safeguards to protect your non-public information. CONTACT US If you have any questions about this privacy statement or would like to learn more about how we protect your privacy, please contact the agent/broker who handled this insurance. Sanction Limitation and Exclusion Clause No (re)insurer shall be deemed to provide cover and no (re)insurer shall be liable to pay any claim or provide any benefit hereunder to the extent that the provision of such cover, payment of such claim or provision of such benefit would expose that (re)insurer to any sanction, prohibition or restriction under United Nations resolutions or the trade or economic sanctions, laws or regulations of the European Union, United Kingdom or United States of America. JC2010/014 11 August 2010 City of Palm Desert short (3).docx 19 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 PREMIUM PAYMENT CLAUSE Notwithstanding any provision to the contrary within this contract or any endorsement hereto, in respect of non payment of premium only the following clause will apply. The (Re)Insured undertakes that premium will be paid in full to (Re)Insurers within 60 days of inception of this contract (or, in respect of instalment premiums, when due). If the premium due under this contract has not been so paid to (Re)Insurers by the {Missing} day from the inception of this contract (and, in respect of instalment premiums, by the date they are due) (Re)Insurers shall have the right to cancel this contract by notifying the (Re)Insured via the broker in writing. In the event of cancellation, premium is due to (Re)Insurers on a pro rata City of Palm Dcsert short (3).docs 20 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Undue market reference number B0713FINFR110 basis for the period that (Re)Insurers are on risk but the full contract premium shall be payable to (Re)Insurers in the event of a loss or occurrence prior to the date of termination which gives rise to a valid claim under this contract. It is agreed that (Re)Insurers shall give not less than 60 days prior notice of cancellation to the (Re)Insured via the broker. If premium due is paid in full to (Re)Insurers before the notice period expires, notice of cancellation shall automatically be revoked. If not, the contract shall automatically terminate at the end of the notice period. If any provision of this clause is found by any court or administrative body of competent jurisdiction to be invalid or unenforceable, such invalidity or unenforceability will not affect the other provisions of this clause which will remain in full force and effect. 30/09/08 LSW3001 NOTICE: 1. THE INSURANCE POLICY THAT YOU HAVE PURCHASED IS BEING ISSUED BY AN INSURER THAT IS NOT LICENSED BY THE STATE OF CALIFORNIA. THESE COMPANIES ARE CALLED "NONADMITTED" OR "SURPLUS LINE" INSURERS. 2. THE INSURER IS NOT SUBJECT TO THE FINANCIAL SOLVENCY REGULATION AND ENFORCEMENT THAT APPLY TO CALIFORNIA LICENSED INSURERS. City of Palm llescrt short (3).docx 21 Policy Number FINFR110 Assured / account City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 3. THE INSURER DOES NOT PARTICIPATE IN ANY OF THE INSURANCE GUARANTEE FUNDS CREATED BY CALIFORNIA LAW. THEREFORE, THESE FUNDS WILL NOT PAY YOUR CLAIMS OR PROTECT YOUR ASSETS IF THE INSURER BECOMES INSOLVENT AND IS UNABLE TO MAKE PAYMENTS AS PROMISED. 4. CALIFORNIA MAINTAINS A LIST OF ELIGIBLE SURPLUS LINE INSURERS APPROVED BY THE INSURANCE COMMISSIONER. ASK YOUR AGENT OR BROKER IF THE INSURER IS ON THAT LIST, OR VIEW THAT LIST AT THE INTERNET WEB SITE OF THE CALIFORNIA DEPARTMENT OF INSURANCE: www.insurance.ca.gov. 5. FOR ADDITIONAL INFORMATION ABOUT THE INSURER YOU SHOULD ASK QUESTIONS OF YOUR INSURANCE AGENT, BROKER, OR "SURPLUS LINE" BROKER OR CONTACT THE CALIFORNIA DEPARTMENT OF INSURANCE, AT THE FOLLOWING TOLL -FREE TELEPHONE NUMBER: 1-800-927-4357. 6. IF YOU, AS THE APPLICANT, REQUIRED THAT THE INSURANCE POLICY YOU HAVE PURCHASED BE BOUND IMMEDIATELY, EITHER BECAUSE EXISTING COVERAGE WAS GOING TO LAPSE WITHIN TWO BUSINESS DAYS OR BECAUSE YOU WERE REQUIRED TO HAVE COVERAGE WITHIN TWO BUSINESS DAYS, AND YOU DID NOT RECEIVE THIS DISCLOSURE FORM AND A REQUEST FOR YOUR SIGNATURE UNTIL AFTER COVERAGE BECAME EFFECTIVE, YOU HAVE THE RIGHT TO CANCEL THIS POLICY WITHIN FIVE DAYS OF RECEIVING THIS DISCLOSURE. IF YOU CANCEL COVERAGE, THE PREMIUM WILL BE PRORATED AND City of Palm Dcscrt short (3).docx 22 Policy Number FINFR110 Ass City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 ANY BROKER'S FEE CHARGED FOR THIS INSURANCE WILL BE RETURNED TO YOU. 12/08 LSW1147C DEDUCTIBLE ENDORSEMENT (PERILS OTHER THAN EARTHQUAKE) In consideration of the reduced premium charged, each claim for loss or damage (separately occurring), except as hereinafter provided, shall be adjusted separately and from the amount of each adjusted claim or the applicable limit of liability, whichever is less, the sum of as stated under The Deductible heading shall be deducted. If this Certificate contains a separate deductible for Earthquake Shock losses, then this deductible shall not apply to loss or damage caused by Earthquake Shock. It is a condition of this Policy that the deductible specified above of as stated under the Deductible heading shall be solely at the risk of the Assured, and shall not be covered under any other policy of insurance effected in the name of the Assured. In the event of any recovery or salvage on a loss which has been or is being or is about to be paid hereunder, such recovery or salvage shall accrue entirely to the benefit of the Underwriters under this Policy until the sum paid by them has been made up. DEDUCTIBLE ENDORSEMENT (EARTHQUAKE) City of Palm Desert short (3).docx 23 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 It is hereby agreed that all loss of or damage to property insured occurring during any one period of seventy two consecutive hours during the currency hereof, directly caused by earthquake shock, shall be deemed to have been caused by a single earthquake and therefore to constitute one loss for the purpose of this Policy. The Assured shall select the time from which any such period shall commence, but no two such selected periods shall overlap. In consideration of the reduced premium charged, each loss as aforesaid shall be adjusted separately and from the amount of such loss or the applicable limit of liability, whichever is the lesser, the sum of as stated under the Deductible heading shall be deducted. It is a condition of this Policy, that the deductible specified above of as stated under the Deductible heading shall be solely at the risk of the Assured, and shall not be covered under any other Policy of Insurance effected in the name of the Assured. In the event of any recovery or salvage on a loss which has been or is being or is about to be paid hereunder, such recovery or salvage shall accrue entirely to the benefit of the Underwriters under this Policy until the amount paid by them has been made up. AGGREGATE LIMIT OF LIABILITY (EARTHQUAKE) Notwithstanding anything to the contrary contained herein, it is understood and agreed that, in respect of loss or damage directly caused by Earthquake Shock, Underwriters liability is limited to as stated in the Conditions in the aggregate of all losses or damages sustained during the Period of Insurance. City of Palm Desert short (3).docx 24 Policy Number FINFR110 City of Palm Desert and/or Palm Springs Art Museum Unique market reference number B0713FINFR110 City of Palm Desert short (3).docx 25