# Section 4: CONDITIONS

**LIMITS OF LIABILITY:** Aetna Casualty shall not be liable for more than the amount shown in each limit of liability stated in Section 2 with respect to EXCESS NET LOSS resulting from any one accident or occurrence; provided:

1. If limits of liability are separately stated as applicable to certain kinds of loss, such limits shall apply separately to that part of such loss which is a covered loss under the limits of liability of the underlying insurance policies applicable to the same kind of loss.
2. If a single limit of liability is stated, such limit shall apply to the total of all covered losses in excess of the total of the applicable limits of liability of the underlying insurance policies; and
3. If any limit of liability so stated is increased by a greater share percentage of a stated amount of excess loss, Aetna Casualty shall not be liable for more than that percentage of any loss, to the extent this policy applies.

**NOTICES:** Notices, as required to be given to the primary insurer, shall also be given to Aetna Casualty in the event of any accident, occurrence, claim or suit which is reasonably likely to give rise to a claim for indemnity under this policy.

The INSURED shall give Aetna 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:** Aetna Casualty shall not be called upon to assume charge of settlement or defense of any claims made or suits instituted against the INSURED but Aetna Casualty shall have the right and shall be given the opportunity to associate with and assist the INSURED and/or the underlying insurers, or both, in the defense and control of any claim, suit or proceeding if such claim, suit or proceeding involves or appears reasonably likely to involve Aetna Casualty, in which event the INSURED and Aetna Casualty shall cooperate in all things in the defense of such claim, suit or proceeding.

**APPEAL:** In the event the INSURED or any underlying insurer elects not to appeal a judgment which exceeds the underlying limit, Aetna Casualty may elect to do so. Aetna Casualty shall be liable only to the extent of its liability, for all costs, taxes, expenses incurred and interest on judgments incidental to such an appeal.

**ACTION AGAINST AETNA CASUALTY:** No action shall lie against Aetna Casualty unless, at its cost, it has been fully compensated 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 judicially against the INSURED or by written agreement of the INSURED, Aetna Casualty, and Aetna Casualty. Bankruptcy or insolvency of the INSURED shall not relieve Aetna Casualty of any of its obligations hereunder.

**SUBROGATION:** In the event of any payment under this policy, Aetna Casualty shall participate with the INSURED and the underlying insurers in the exercise of all the INSURED's rights to recover any sums paid or otherwise received in respect of such loss or damage. No person or organization thereof shall be entitled to recover any sums paid or otherwise received in respect of such loss or damage except the INSURED. The INSURED shall do nothing after the payment of such sums to prejudice such rights. Recovery shall be applied first to remunisc all interest (including the INSURED's interest) which have been paid any amount with respect to liability in excess of the limits of Aetna Casualty's liability hereunder. Then, to remunisc Aetna Casualty and any other insurer with which it may be participating on a joint-share basis, up to the amount paid hereunder. Any remaining interest (including the INSURED's), as to which no recovery is effected, shall be remunisc to the INSURED to claim the residue, if any; but a different apportionment may be made to effect settlement of a claim by agreement executed by all interested parties. Recovery shall be exercised in the exercise of rights of recovery shall be apportioned among all interests in the ratio of their respective losses for which recovery is sought.

**CHANGES:** Notice to any agent or knowledge possessed by any agent or by any other person shall not affect a waiver or a change in any term of this policy except Aetna Casualty from asserting any rights under the terms of this policy, unless the terms of this policy are waived or changed, except by endorsement, by action of the President, Assistant Vice President, Secretary or Assistant Secretary of Aetna Casualty.

**ASSIGNMENT:** Assignment of interest under this policy shall not bind Aetna Casualty until its consent is endorsed herein.

**CANCELLATION:** This policy may be cancelled by the INSURED as provided in Section 1 by mailing to Aetna Casualty written notice stating when thereafter cancellation shall be effective. This policy may be cancelled by Aetna Casualty or by the INSURED first named in Section 1, at the address shown in this policy written notice stating when not less than ten days thereafter such cancellation shall be effective. The mailing of notice as aforesaid shall be sufficient proof of notice.

If such INSURED cancels, earned premium shall be computed short rate. If Aetna Casualty cancels, earned premium shall be computed pro-rated. The owner or tender of unearned premium is not a condition of cancellation.

IN WITNESS WHEREOF, THE AETNA CASUALTY AND SURETY COMPANY has caused this policy to be signed by its President and a Secretary at Hartford, Connecticut, and countersigned on the Declarations page by a duly authorized agent of the Company.