# NOTICE OF LOSS

Upon the happening of an accident or occurrence that appears likely to involve this Certificate, written notice thereof with full particulars shall be given to the Reinsurer by the Reinsured as soon as practicable. The Reinsured shall give like notice of any claim or suit instituted against the Reinsured on account of any accident or occurrence.

The Reinsurer shall not, however, be called upon to assume charge of the settlement or defense of any of the claims made, or suits brought or proceedings instituted against the Reinsured, but shall have the right and opportunity to be associated with the Reinsured in the defense and trial of any such claims, suits or proceedings relative to any accident or occurrence which, in the opinion of the Reinsurer may create liability on its part under the terms of this certificate.

## LOSS ADJUSTMENT

Upon final determination by settlement award or verdict of the liability of the Reinsured, the Reinsurer shall promptly pay the Reinsured as the Reinsured shall pay, or be required to pay, the amount of any ultimate net loss coming within the terms and limits of this reinsurance.

"Ultimate Net Loss", as used herein, shall mean the sums paid in settlement of losses for which the Reinsured is liable after making deductions for all recoveries, salvages and other insurances or reinsurances (other than recoveries under (1) any underlying insurances, (2) any excess insurances or reinsurances which contribute with this reinsurance, or (3) any insurances or reinsurances specifically in excess hereof), whether recoverable or not, and shall exclude (1) all expenses for salaried employees, retained counsel and all office expenses of the Reinsured, and (2) all "Costs".

The word "Costs" shall be understood to mean any expenses in connection with the investigation or defense of claims or suits, or interest on any judgment which accrues after entry of the judgment.

Costs incurred by the Reinsured, with the written consent of the Reinsurer and for which the Reinsured is not covered by any underlying insurance, shall be apportioned as follows:

1. In the event of claim or suit arising which appears likely to exceed the total limits of the applicable underlying insurance, no Costs shall be incurred by the Reinsured without the written consent of the Reinsurer.
2. Should such claim or suit become adjustable previous to going into court for not more than the total limits of the applicable underlying insurance, then no Costs shall be payable by the Reinsurer.
3. Should, however, the sum for which the said claim or suit may be so adjustable exceed the total limits of the applicable underlying insurance, then the Reinsurer, if it consents to the proceedings continuing, shall contribute to the Costs incurred by the Reinsured in the ratio that its proportion of the ultimate net loss as finally adjusted bears to the whole amount of such ultimate net loss.
4. In the event that the Reinsured elects not to appeal a judgment in excess of the total limits of the applicable underlying insurance, the Reinsurer 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 Reinsurer exceed its limit or limits of liability as stated above, plus the expenses of such appeal.

## SALVAGE

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 Reinsured and the Reinsurer, provided always that nothing in the clause shall be construed to mean that losses under this Certificate are not recoverable until the Reinsured's ultimate net loss has been finally ascertained.

Nothing herein contained shall be construed to mean that the Reinsured shall be required to enforce by legal action any right of subrogation, salvage or indemnity before the Reinsurer shall pay any loss covered hereunder.

## SUBROGATION

Inasmuch as this Certificate is Excess Reinsurance, the Reinsured's right of recovery against any person cannot be exclusively subrogated to the Reinsurer. It is, therefore, understood and agreed