# Section 4 CONDITIONS

## LIMITS OF LIABILITY

A. Any Liability shall not exceed the amount of the Insured's coverage as set forth in the policy, except that with respect to Losses SET FORTH IN SECTION 1, the aggregate of all Losses incurred by the Insured under this policy or any other agreement or insurance in respect thereof, whether or not arising from the same accident or occurrence, is subject to the limits of liability stated separately as applicable to such Losses. Such limits shall apply separately to that part of such Losses which is in excess of the total of the limits of liability of the underlying insurance policies applicable to such Losses.

B. If a limit of liability is stated and such limit applies to that part of an accident which is in excess of the total of the limits, then the amount of the Losses covered under this policy shall be the lesser of (i) the amount of the Losses covered under this policy and (ii) the amount of the Losses covered under the underlying insurance policies applicable to such Losses.

C. The limits of liability stated herein shall not apply to any Losses which are not covered by the underlying insurance policies applicable to such Losses.

**NOTICES**

Notice as required to be given to the primary insurer shall also be given to Etina Casualty in the event of any accident, arbitration claim or suit which may reasonably give rise to a claim for indemnity under this policy.

The INSURED shall give Etina Casualty notice of any change in or termination of underlying insurance, including notice of exhaustion of any aggregate limit, copies of endorsements and audits of premiums earned.

**ASSISTANCE AND COOPERATION**

Etina Casualty shall not be called upon to assume charge of the settlement, defense or prosecution of any claims made or suits brought or proceedings instituted against the INSURED but Etina Casualty shall have the right and shall be given the opportunity to associate with the INSURED and to assist it under measures or steps in the defense and control of any claim or proceeding where the claim or suit involves or appears reasonably likely to involve Etina Casualty, in which event the INSURED and Etina Casualty shall cooperate in all things in the defense of such claim suit or proceeding.

**APPEALS**

In the event the INSURED or any underlying insurer elects not to appeal a judgment which exceeds the underlying limit, Etina Casualty may elect to do so. Etina Casualty shall be liable, in addition to the applicable limit of liability, for all such taxes, expenses incurred and interest on judgments incidental to such an appeal.

**ACTION AGAINST CASUALTY**

No action shall be against Etina Casualty unless, as a condition precedent thereto, there shall have been full compliance with all of the terms of this policy nor until the amount of the INSURED's obligation to pay shall have been finally determined either by judgment against the INSURED or by written agreement of the INSURED, the claimant and Etina Casualty. Bankruptcy or insolvency of the INSURED shall not relieve Etina Casualty of any of its obligations hereunder.

**SUBROGATION**

Etina Casualty shall not be subrogated to any rights of recovery of the INSURED against any person or entity, including the primary insurer, except to the extent that such recovery is necessary to effectuate the purpose of this policy. Etina Casualty may be called upon to defend and indemnify the INSURED against any claim or suit which may result in a demand for recovery against the INSURED. Etina Casualty shall be entitled to recover from the INSURED any sums paid by Etina Casualty in connection with such claim or suit. Etina Casualty shall be subrogated to the rights of the INSURED to any recovery obtained by the INSURED in connection with such claim or suit.

**CHANGES**

It is understood and agreed that no change in the terms of this policy shall be effective without the written consent of Etina Casualty. No change in the terms of this policy shall be effective if made by any agent or by any other person or entity having possession of this policy or any part of this policy except as provided in Section 2. Any change in the terms of this policy shall be effective only if made in writing and signed by Etina Casualty. Any change in the terms of this policy shall be effective only if made in writing and signed by Etina Casualty.

**ASSIGNMENT**

Any provision of this policy by which the INSURED shall be bound shall not be assigned by the INSURED without the prior written consent of Etina Casualty.

**CANCELLATION**

This policy may be cancelled by Etina Casualty at any time by notice stating when thereafter the cancellation shall take effect. This policy may be cancelled by the INSURED at any time by written notice stating when thereafter the cancellation shall be effective. Notice of cancellation shall be sufficient if given in writing and signed by the INSURED.

If such INSURED cancels, the premium shall be proportioned pro rata, but payment of unearned premium shall be a condition of cancellation.

IN WITNESS WHEREOF, Etina Casualty and the INSURED COMPANY has caused this instrument to be signed by its Secretary or Assistant Secretary and the undersigned has caused his name to be signed hereto.

William O. Bailey
President

Stephen B. Middlebrook