# POLICY PROVISIONS

Prudential Reinsurance Company, a capital stock insurance company (herein called the Company), agrees with the Insured Named in the Declarations, in consideration of the payment of the required premium and subject to all the terms of this policy:

## I. INSURING AGREEMENT

To pay on behalf of the Insured the Ultimate Net Loss which the Insured shall become legally obligated to pay arising out of the hazards covered by and resulting from an occurrence insured by the Underlying Insurance scheduled in Item 5 of the Declarations.

The insurance afforded by this policy is excess over the amount of the underlying limits stated in Item 3 of the Declarations and applies only after the Underlying Insurance has paid or been held liable to pay such underlying limits.

## II. DEFINITIONS

A) **Ultimate Net Loss** - the total sum which the Insured, or any company as his insurer, or both, become obligated to pay by reason of claims covered hereunder, either through adjudication or compromise, and shall also include all sums paid as salaries, wages, compensation, fees, charges and law costs, premiums on attachment or appeal bonds, interest, expenses of litigation, settlement, adjustment and investigation of claims and suits which are paid as a consequence of any occurrence covered hereunder, excluding only the salaries of the Insured's or of any underlying insurer's permanent employees.

The Company shall not be liable for expenses as aforesaid when such expenses are included in other valid and collectible insurance

B) **Underlying Insurance** - the policy or policies specified in Item 5 of the Declarations.

## III. MAINTENANCE OF UNDERLYING INSURANCE

The Underlying Insurance and underlying limits specified in the Declarations shall be maintained in full force and effect without change during the currency of this policy except for reduction of the aggregate limits solely by reason of claims in respect of occurrences happening during the period of this policy. The failure of the Insured to comply with the foregoing shall not invalidate this policy; but in the event of such failure, the Company shall only be liable to the same extent as if the Insured had complied with this condition.