# COSTS INCURRED BY THE INSURED

With the written consent of the Company, costs incurred by the Insured shall be apportioned as follows:

(a) In the event of claim or suit arising which appears likely to exceed the Primary Limit or Limits, no costs shall be incurred by the Insured without the written consent of the Company.

(b) Should such claim or suit be settled previous to going into court for not more than the Primary Limit or Limits, then no costs shall be payable by the Company.

(c) Should, however, the sum for which the said claim or suit may be settled exceed the Primary Limit or Limits, then the Company, if it consents to the proceedings continuing, shall contribute to the costs incurred by the Insured in the ratio that its proportion of the ultimate net loss as finally adjusted bears to the whole amount of such ultimate net loss.

(d) In the event the Insured elects not to appeal a judgment in excess of the Primary Limit or Limits, the Company may elect to conduct such appeal at its own cost and expense and shall be liable for the taxable court costs and interest incidental thereto, but in no event shall the total liability of the Company exceed its limit or limits of liability as stated above, plus the costs of such appeal.

(e) In the event a judgment is rendered in excess of the Primary Limit or Limits and the underlying insurance company (ies) elect to appeal such judgment, the duty of obtaining an appeal bond in regard to liability in excess of the Primary Limit or Limits shall rest with the Insured and its Primary Carrier.

**ALL SALVAGES**, recoveries or payments recovered or received subsequent to a loss settlement under this Certificate shall be applied as if recovered or received prior to such settlement and all necessary adjustments shall then be made between the Insured and the Company, provided always that nothing in this clause shall be construed to mean that losses under this Certificate are not recoverable until the Insured's ultimate net loss has been finally ascertained.

**NOTHING HEREIN CONTAINED** shall be construed to mean that the Insured shall be required to enforce by legal action any right of subrogation or indemnity before the Company shall pay any loss covered hereunder.

## SUBROGATION

INASMUCH AS this Certificate is Excess Insurance, the Insured's right of recovery against any person cannot be exclusively subrogated to the Company. It is, therefore, understood and agreed that in case of any payment hereunder, the Company will act in concert with all other interests (including the Insured) concerned, in the exercise of such rights of recovery. The apportioning of any amounts which may be so recovered shall follow the principle that any interests (including the Insured) that shall have paid an amount over and above any payment hereunder, shall first be reimbursed up to the amount paid by them. The Company is then to be reimbursed out of any balance there remaining up to the amount paid hereunder, jointly and severally (including the Insured) of whom this coverage is in excess are entitled to claim the residue, if any. Expenses necessary to the recovery of any such amounts shall be apportioned between the interests (including the Insured) concerned, in the ratio of their respective recoveries as finally settled.

## CANCELLATION

THIS CERTIFICATE may be cancelled by either party upon written notice, such notice to be not less than the number of days set forth in Item 5. of the Declarations. If cancellation is at the request of the Insured, adjustment of premium shall be at short rate, and if cancelled by the Company, adjustment shall be made pro rata. However, in the event of cancellation or non-renewal of the underlying insurance, this Certificate terminates as of the same date as such notice to the Insured. The Company may, however, cancel this Certificate absolutely on five days' notice for non-payment of premium due. Notice shall be given to the Insured to the Company at 99 John Street, New York 36, New York and by the Company to the Insured at the latter's address as shown in the Declarations. Notice by the Company to the first named Insured, if more than one, shall be deemed notice to any other interest included as an Insured.