### III. DEFINITIONS

1. **Ultimate Net Loss**
   Ultimate Net Loss, as used herein, shall mean the sums paid in settlement of losses for which the Insured is liable after making deductions for all recoveries, salvages and other insurances (other than recoveries under the underlying insurance, policies of co-insurance, or policies specifically in excess hereof), whether recoverable or not, and shall exclude all "Costs".

2. **Costs**
   "Costs", as used herein, means:
   
   (A) interest on judgements including but not limited to interest that accrues from the date suit is filed or interest that accrues from date of death, investigation, adjustment and legal expenses including taxed court costs and premiums on bonds for which the Insured is not covered by underlying insurance, and
   
   (B) (1) All expenses for salaried employees and counsel on general retainer; (2) All office expenses of the Insured; (3) All expenses incurred by the Insured with respect to accidents or occurrences for which insurance is not afforded under this Certificate and (4) Expenses incurred by the Insured under Contract with another to provide loss prevention and/or claims control services.
   
   Those costs as defined in (A) above, that are incurred by the Insured with the written consent of the Company shall be apportioned as follows:
   
   (1) In the event of claim or suit arising which appears likely to exceed the underlying insurance limit or limits, no costs shall be incurred by the Insured without the written consent of the Company.
   
   (2) Should any claim or suit be settled for not more than the underlying insurance limit or limits, then no costs shall be payable by the Company.