# CONDITIONS

1. **Premium** - The premium for this policy is a flat premium and is not subject to adjustment, except that additional premiums may be required for any additional "insureds" as outlined in Definition 8, "PERSONS INSURED", or as provided in Condition 11, Cancellation. If the policy is subject to audit adjustment, the premium will be based upon the rating bases as set forth in the Declarations. Upon expiration of this policy or its termination during the policy period or at the end of each policy year, the earned premium shall be computed as follows: a) if the earned premium is more than the advance premium paid, the first Named Insured will promptly pay the excess to us; b) if less, we will return to the first Named Insured the unearned portion, subject to the annual minimum premium stated in the Declarations, which in no case shall be less than the minimum earned premium at inception as stated in the Declarations.

2. **Prior Insurance and Non-Cumulation of Liability** - It is agreed that if any loss is also covered in whole or in part under any other excess policy issued to any "insured" prior to the inception date hereof, our limit of liability as stated in the Declarations shall be reduced by any amounts due any "insured" on account of any such prior insurance.

3. **Severability of Interest** - In the event of "claims" being made by reason of "Personal Injury", "Property Damage" or "Advertising Injury" suffered by one "insured" herein for which another "insured" herein is or may be liable, this policy shall cover the "insured" against whom a "claim" is made or may be made in the same manner as if separate policies had been issued to each "insured" herein. Nothing contained herein shall operate to increase our limit of liability as set forth in the Limits of Liability section.

4. **Inspection** - We are permitted but not obligated to inspect the "insured's" property and operations at any time.

Neither our right to make inspections nor the making thereof nor any report thereon shall constitute an undertaking on the "insured's" behalf or for the "insured's" benefit or others to determine or warrant that such property or operations are safe or healthful or that they comply with laws, regulations, codes or standards.

5. **Audit** - We may examine and audit the "insured's" books and records at any time during the policy period and extensions thereof and within three years after the final termination of this policy as far as they relate to the subject matter of this insurance.

LEX-CM-STA-2
(Ed. 4/86)