**SECTION III. LIMITS AND DEFENSE**

a. We will notify the first named insured, in writing, as soon as practicable, that:

(1) Such a limit has actually been used up; and

(2) Our duty to defend suits seeking damages subject to that limit has also ended.

b. Seeking damages which are subject to that limit and which are reported to us before that limit is used up. That insured must cooperate in the transfer of control of said claims and suits.

We agree to take such steps, as we deem appropriate, to avoid a default in, or continue the defense of, such suits until such transfer is completed, provided the appropriate insured is cooperating in completing such transfer.

We will take no action whatsoever with respect to any claim or suit seeking damages that would have been used up, if the claim, or suit is reported to us after that limit of insurance has been used up.

3. The first named insured and any other insured involved in a suit seeking damages subject to that limit, must arrange for the defense of such suit within such time period as agreed to between the appropriate insured and us. Absent any such agreement, arrangements for the defense of such suit must be made as soon as practicable.

4. The first named insured will reimburse us for expenses we incur in taking those steps we deem appropriate in accordance with paragraph C.2.b. above.

The duty of the first named insured to reimburse us will begin on:

(1) The date on which the applicable limit of insurance is used up, if we sent notice in accordance with paragraph C.1. above; or

(2) The date on which we sent notice in accordance with paragraph C.1. above, if we did not send notice in accordance with paragraph C.2. above.

5. The exhaustion of any limit of insurance by the payments of judgments or settlements, and the resulting end of our duty to defend, will not be affected by our failure to comply with any of the provisions of this Condition.

D. SECTION IV. EXCLUSIONS, Exclusion B. 1. Pollution, the following added to this exclusion:

This pollution exclusion applies whether or not such pollutants have any function in your business, operations, premises, site or location.

E. SECTION V. CONDITIONS, C. Cancellation is deleted in its entirety and replaced with the following:

1. You may cancel this policy. You must mail or deliver advance written notice to us stating when the cancellation is to take effect.

2. We may cancel this policy. If we cancel because of non-payment of premium, we will mail or deliver to you at the address shown on your policy not less than fifteen (15) days advance written notice when the cancellation is to take effect. If we cancel for any other reason, we will mail or deliver to you at the address shown on your policy not less than ninety (90) days advance written notice stating the reason(s) for the cancellation and when the cancellation is to take effect. Notice will be mailed or delivered to you, at the address shown on the policy, and to your authorized agent or broker.

a. If this policy has been in effect for sixty (60) days or less and it is not a renewal of a policy we issued, we may cancel this policy for any reason. Notice will be mailed or delivered to you at the address shown on your policy, and to your authorized agent or broker, at least twenty (20) days in advance of the cancellation of this policy.

b. If this policy has been in effect for more than sixty (60) days, or if this policy is a renewal or continuation of a policy we issued, we may cancel this policy for one or more of the following reasons only:

(1) Non-payment of premium;

(2) Conviction of a crime arising out of acts increasing the hazard insured against;

(3) Discovery of fraud or material misrepresentation in the obtaining of the policy or in the presentation of a claim thereunder;

(4) After issuance of the policy or after the last renewal date, discovery of any act or omission, or a violation of any policy condition, that substantially and materially increases the hazard insured against, and which occurred subsequent to inception of the current policy period;

(5) Material change in the nature or extent of the risk, occurring after issuance or last annual renewal

Includes copyrighted material of Insurance Services Office, Inc., with its permission.
U-EXS-241-C NY (02/13)
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