> _Markdown transcription of Vero Vero Steadfast Material Damage policy wording, effective 2026-05-26. Source: https://www.insurancepartners.co.nz/site_files/24864/upload_files/VeroSteadfastMaterialDamageWording072024.pdf_ --- # Material Damage Policy Wording ## Contents - Introduction - Insurance agreement - What you are covered for - Automatic policy extensions - Optional policy extensions - Exclusions - How we will pay - What we will pay - How to claim - General conditions - Definitions --- ## Introduction ### Welcome Welcome to Vero. Thank you for selecting us as your insurer. ### About this policy This insurance policy is underwritten by Vero Insurance New Zealand Limited. Your Material Damage Policy consists of: 1. this policy document, and 2. the schedule, and 3. any endorsements or warranties that we apply, and 4. the information you have provided in the application. ### About Steadfast Steadfast NZ Limited (Steadfast) is part of Steadfast Group Limited, an Australian Stock Exchange listed company. It includes a network of insurance brokerages who operate in New Zealand as Steadfast brokers. This policy is available exclusively to you through a Steadfast broker. Steadfast does not issue, guarantee or underwrite this policy. ### Your duty of disclosure When you apply for insurance, you have a legal duty of disclosure. This means you or anyone acting on your behalf must tell us everything you know (or could reasonably be expected to know) that a prudent insurer would want to take into account in deciding: 1. to accept or decline your insurance, and/or 2. the cost or terms of the insurance, including the excess. You also have this duty every time your insurance renews and when you make any changes to it. If you or anyone acting on your behalf breaches this duty, we may treat this policy as being of no effect and to have never existed. Please ask us if you are not sure whether you need to tell us about something. ### Examples We have used examples and comments to make parts of this policy document easier to understand. These examples and comments are printed in italics and do not affect or limit the meaning of the section they refer to. ### Headings The headings in this policy document are for reference only and do not form part of it. They must not be used when interpreting the policy document. ### Defined words If a word is shown in bold, it has a specific meaning. There is a list of these words and what they mean at the back of this policy in the section 'DEFINITIONS'. --- ## Insurance agreement ### Our agreement You agree to pay us the premium and comply with this policy. In exchange, we agree to insure you as set out in this policy. --- ## What you are covered for ### Loss to insured property We will indemnify you for accidental loss to any of the insured property occurring at the situation during the period of insurance. You will be indemnified by payment or, at our option, by repair or by replacement of the lost or damaged property. Subject to reinstatement of the sum insured once repaired or replaced, our liability in any one period of insurance will not exceed the total sum insured; and where sums insured have been declared to us or included in the schedule for more than one situation, item and/or category of insured property, our liability will not exceed in respect of each situation, and each item or category of insured property at a situation, the applicable sum insured. --- ## Automatic policy extensions In addition to the cover under 'What You Are Covered For - Loss to Insured Property' above, we also provide the following Automatic Policy Extensions. Unless expressly stated otherwise: (a) any amounts payable under these Automatic Policy Extensions are included within 'What We Will Pay – Maximum Amount Payable'. They are not additional; (b) these Automatic Policy Extensions are subject to all terms, conditions and exclusions of this policy; (c) some Automatic Policy Extensions may be subject to separate sub-limits and excesses, as specified. ### Alternative residential accommodation If the insured property is a residential unit that is owned and occupied by you, or any of your directors or employees and it cannot be lived in due to accidental loss to the residential unit, where that loss: 1. is covered by this policy, or 2. would have been covered by this policy, but is covered by the Natural Hazards Insurance Act 2023 instead, then you are insured for the reasonable additional costs of temporary accommodation that is of a similar standard to the residential unit for: (a) you, or any of your directors or employees, and (b) your, or any of your director's or employee's, domestic pets. The most we will pay for any event is $25,000 per residential unit, (unless a different amount per residential unit is shown in the schedule) up to a total of the sum insured shown in the schedule for Alternative Accommodation. However, in all cases we will not pay more than 12 months' rent for any event. Payment under this extension is in addition to 'What We Will Pay - Maximum Amount Payable'. If you have alternative accommodation cover under any other policy with us, then the most we will pay under all policies in total per residential unit for any event is the highest applicable limit. ### Burglary cover You are insured for accidental loss to insured property: 1. at the situation, or 2. during the period the insured property is covered by: (a) Automatic Policy Extension Portable Electronic Equipment Cover, or (b) Automatic Policy Extension Temporary Removal Cover, or (c) Automatic Policy Extension Transit Cover, or (d) Automatic Policy Extension Unspecified Locations, or (e) Automatic Policy Extension Working from Home, caused by theft or attempted theft: 1. accompanied by threat of violence, or actual violence, to any person, or 2. involving physical evidence of violent and forcible entry to, or exit from, an enclosed building (or part of an enclosed building), or 3. involving physical evidence of violent and forcible entry to, or exit from, a securely locked motor vehicle or storage container, or 4. of a permanently attached part of the building by the forcible removal of it. If the loss is covered by one of the Automatic Policy Extensions referred to in 2 (a), (b), (c), (d) or (e) above, any sub-limit detailed in that extension also applies to the cover under this extension. Policy Exclusion – Losses Not Covered – 5.(a) theft or attempted theft – does not apply to the cover provided under this extension. ### Capital additions cover You are insured for: accidental loss to a building or contents, located in New Zealand, that you acquire during the period of insurance, provided you own or are legally responsible for that property, and 1. appreciation in value of a building or contents that results solely from a physical: (a) alteration, or (b) addition, or (c) improvement, provided that you notify us within 90-days of you acquiring the property or the physical works being completed. Once you have notified us: 1. we may charge you additional premium, and 2. any increased value of the property will be added to your sum insured. The most we will pay under this extension during any annual period is: (a) 10% of the sum insured for the building and 10% of the sum insured for the contents, or (b) $100,000 in total for both, whichever is the lesser. ### Constructive loss In the event of accidental loss to insured property at the situation comprising any building shown in the schedule as insured for 'Basis of Settlement – Reinstatement', where the building is damaged not destroyed, and the cost of reinstatement of that building is 60% or more of 'What We Will Pay – Maximum Amount Payable', then that building will be treated as having been destroyed where the following conditions exist: (a) The reinstatement of the insured building is prevented by sole reason of regulations; or (b) In any other instance where by agreement between you and us it is the most practical and/or economic method of settlement. ### Demolition costs You are insured for the costs necessarily incurred for any of the following purposes in consequence of accidental loss to insured property at the situation: 1. demolish, dismantle, shore or prop insured property, and 2. dispose of debris (including any kind of solid, liquid or gas), and 3. clear, clean and repair gutters, drains and the like, and 4. recover, defend, safeguard, remove, store, and return stock and contents, whether damaged or undamaged, and 5. temporarily repair and secure insured property to make it comply with safety rules and regulations or suitable for continued use, provided that the costs arise from a valid claim under this policy. ### Disclaimers and release of liability Where you are required by legislation or by contractual agreement to release: 1. the Fire Service Commission; 2. any fire protection installation, service or equipment suppliers; 3. any Oil Company; 4. Corporation, Authority or Quasi Government organisation; 5. any Municipal or Local Authority; 6. any State Owned Enterprise; 7. any rail division of Toll NZ Limited; 8. any Lift Installation or Maintenance Engineers; 9. any storage of goods for, or leasing property to, you; or 10. any other party to an agreement that has been declared to and accepted by us; from liability arising from loss covered by this Material Damage policy, the release is allowed without prejudice to this insurance and notwithstanding the subrogation action we may take under the 'How to Claim' section of the policy. ### Docks, piers, wharves and road bridges You are insured for accidental loss to docks, piers, wharves or road bridges owned by you that form part of your insured property and are at the situation shown in the schedule, subject to a combined limit of $100,000 at any one situation, unless specified for a greater amount in the schedule. The following Policy Exclusions do not apply to the cover provided under this extension: (a) Policy Exclusion– Types of Property Not Covered – 4.(f) road bridges or road tunnels; and (b) Policy Exclusion– Types of Property Not Covered – 4.(h) docks, piers, or wharves. ### Electric motors cover You are insured for sudden and accidental loss to: 1. electric motors and starters not exceeding 7.5kw (10 hp), and 2. distribution switchboards and permanently installed electric reticulation, at the situation provided that the damage is fusion immediately preceded by: 1. the failure of electrical insulation, or 2. an identifiable abnormal electric current fluctuation from any power supply network, or 3. electrically induced self-heating. Policy Exclusion Damage to Machinery does not apply to the cover provided under this extension. ### Employee effects cover You are insured for accidental loss to the clothing, personal effects and tools of trade of your directors and employees (but not your contractors). We will cover this property as if it were contents, provided that: 1. the property is at the situation, or 2. the property is being worn, carried or used by your directors or employees while they are acting in the course of their directors' duties or employment, anywhere in New Zealand. The most we will pay under this extension: 1. is $5,000 for any event, per person, and 2. in total during the annual period is the sum insured shown in the schedule for contents. ### Expediting costs cover You are insured for the reasonable costs of express freight and overtime to expedite the repair or replacement of insured property following a loss covered under this policy. You must have our prior approval before incurring any costs. Our approval will be based on the economic benefit gained. Policy Exclusion Consequential Financial Loss does not apply to the cover provided under this extension. ### Fire fighting equipment You are insured for the reasonable costs you incur to replenish your portable hand-held fire fighting equipment after the equipment has been used to protect your insured property from loss, or immediate and imminent threat of loss, provided that the loss would be covered under this policy if it did occur. The most we will pay under this extension in total during any annual period is $10,000. ### Gradual damage You are insured for accidental loss to the insured property at the situation resulting from the action of micro-organisms, mould, mildew, rot, fungi or gradual deterioration, caused by water leaking or overflowing from any internal water system installed at the situation. An internal water system is any water pipe, waste disposal pipe, water cylinder or water storage tank which is permanently connected and contained within the walls, floors or roof of the structure and any pipe that is hidden from view that is connected to an appliance, such as a washing machine or dishwasher. Provided we have accepted a claim for the loss, the limit includes the cost of searching for the source of the problem if it is reasonably incurred. Our liability in respect of any one loss will not exceed $10,000. The following Policy Exclusions do not apply to the cover provided under this extension: (a) Policy Exclusion – Losses Not Covered – 1.(a) action or effects micro-organisms, mould, mildew, rot, fungi; and (b) Policy Exclusion – Losses Not Covered - 1.(b) gradual deterioration. ### Illegal substances You are insured for accidental loss to the building and/or contents within the building shown in the schedule, in connection with the manufacture, supply, storage, possession, distribution or use of any controlled drug as defined in the Misuse of Drugs Act 1975, including methamphetamine, or any pre-cursor chemicals or materials used in any of these activities, provided that: (a) the building is tenanted, and (b) when the accidental loss occurred there was a signed tenancy agreement in place for an ongoing period of no less than 90 days, and (c) you or the person who manages the tenancy on your behalf has met the landlord's obligations. The most we will pay under this extension is $50,000 for any one event, up to a maximum of $250,000 in any annual period. However, for accidental loss resulting from fire or explosion the most we will pay is the sum insured declared in the schedule. For the purpose of this extension "landlord's obligations" means you or the person who manages the insured property on your behalf must: (a) exercise reasonable care in the selection of tenant(s) by obtaining at least satisfactory verbal or written references, and (b) complete an external and internal inspection of the property at a minimum of six monthly intervals and upon the change of every tenant(s), and (c) keep a written record of the outcome of each inspection and provide a copy to us if a copy is requested. Cover under this extension will only apply where, at the time of the claim being made, the level of chemical contamination exceeds 15µg/100cm2. We will only pay for decontamination to the extent required to achieve a post remediation level of less than 1.5µg/100cm2. Policy Exclusion Illegal Substances does not apply to the cover provided under this extension. ### Inventory You are insured for the costs reasonably incurred by you in taking an inventory to establish the value of lost or damaged insured property following a loss covered by this policy. However, the indemnity provided will not increase our liability beyond the total sum insured in the schedule. ### Landslip This policy extends to cover accidental loss or damage to any insured property directly or indirectly consequent upon: 1. landslip that is neither gradual nor progressive; and/or 2. the movement (whether by way of falling, sliding or flowing) of ground; but excluding: (a) subsidence; and/or (b) the expansion, shrinkage, compaction or erosion of soil. The most we will pay under this extension is $500,000 for any one event. An excess of $15,000 applies for each event under this extension, unless a higher amount appears in the schedule. The following Policy Exclusions do not apply to the cover provided under this extension: (a) Policy Exclusion – Losses Not Covered – 6.(b) landslip and subsidence; and (b) Policy Exclusion – Losses Not Covered – 6.(e) settling, warping or cracking caused by earth or other movements. ### Money cover You are insured for sudden and accidental loss of money, provided that the loss occurs in any of the circumstances outlined below: #### Money Section A 1. money in transit, or 2. money at the situation during business hours, or 3. money at the situation in a securely locked safe or strong room outside business hours. #### Money Section B 1. money at the situation outside business hours and not in a securely locked safe or strong room, or 2. money at residential premises occupied by you or any director, employee, or agent, authorised to have possession of the money. This extension does not provide cover for loss of money: 1. caused by errors in receiving it or paying it out, or 2. occurring while the money is entrusted to any person other than: (a) you or any director or executive officer of yours, or (b) any employee or agent of yours, or (c) any professional money carrier, or 3. resulting from payment of money in exchange for any cheque that is subsequently dishonoured, or 4. occurring while the money is in an unlocked and unoccupied vehicle, or 5. caused by theft or fraud by any of your employees, unless the loss is discovered within three consecutive business days of the act of theft or fraud, or 6. through electronic means. The most we will pay under this extension is: 1. $10,000 or the 'Special Carry' sum insured (during the months specified) for any event under Money Section A, and 2. $3,000 for any event under Money Section B, unless a different amount for Money Section A or Money Section B is shown in the schedule. Payment under this extension is in addition to 'What We Will Pay - Maximum Amount Payable'. The following Policy Exclusions do not apply to the cover provided under this extension: (a) Policy Exclusion – Types of Property Not Covered – 5. Money; (b) Policy Exclusion – Types of Property Not Covered – 6. Insured property in transit; (c) Policy Exclusion – Losses Not Covered – 5.(a) theft or attempted theft; and (d) Policy Exclusion – Losses Not Covered – 5.(c) theft or attempted theft or fraud by you or an employee of yours. ### Portable electronic equipment cover You are insured for accidental loss to portable electronic equipment, while away from the situation and whilst in transit and located anywhere in the world. The most we will pay under this extension is $25,000 in total for any one event. An excess of $1,000 applies for each event under this extension, unless a different amount is shown in the schedule. If any of the portable electronic equipment is a computer system: 1. Policy Exclusion Computer System and Data does not apply to that portable electronic equipment; 2. there is no cover under this extension for: (a) Computer software, computer system records, and data, including the replacing or reproducing of information contained in or on them; (b) the loss of value of the information contained in or on computer software, computer system records and data. 3. This extension does not apply to any accidental loss or damage in any way connected to a cyber act or to any action taken in controlling, preventing, suppressing or remediating any cyber act. The following Policy Exclusions do not apply to the cover provided under this extension: (a) Policy Exclusion – Types of Property Not Covered – 4.(l) property located outside New Zealand; and (b) Policy Exclusion – Types of Property Not Covered – 6. insured property in transit. ### Property under construction You are insured for accidental loss to any building and contents at the situation during the course of: 1. demolition, or 2. installation, construction or erection, or 3. testing and commissioning following 2. above, provided that: 1. the property is owned, will be owned or will be occupied by you, and 2. the completed value of the contract works does not exceed $100,000. This extension does not apply to any computer system. The following Policy Exclusions do not apply to the cover provided under this extension: (a) Policy Exclusion – Types of Property Not Covered – 1.(a) insured property during demolition; (b) Policy Exclusion – Types of Property Not Covered – 1.(b) insured property during installation, construction or erection; and (c) Policy Exclusion – Types of Property Not Covered – 1.(c) insured property during testing following 1.(b) above. ### Protection costs cover You are insured for reasonable costs you incur to temporarily protect insured property by preventing or minimising an imminent accidental loss, provided that the loss would be covered under this policy if it did occur. The most we will pay under this extension is $250,000 any one event. ### Redundant foundations You are insured for undamaged foundations that are made redundant, where the insured property resting on them has been destroyed as a result of a loss covered by this policy. Where the redundant and undamaged foundations are not demolished, and the presence of them increases the market value of the site to which they are fixed, the amount of the market value increase will be deducted from the amount payable for your claim. Policy Exclusion Consequential Financial Loss 6. loss of use of any property, does not apply to the cover provided under this extension. ### Redundant plant and stock You are insured for any of the following provided it is also insured property: 1. stock rendered redundant as a result of loss covered by this policy to other insured property. 2. (a) plant which is interdependent with insured property, and/or (b) spare parts held exclusively for insured property, rendered redundant as a result of loss covered by this policy to its respective insured property in (a) or (b) above. Regardless of any Basis of Settlement shown in the schedule, we will only ever pay you the indemnity value of the redundant plant and/or spare parts. Policy Exclusion Consequential Financial Loss 6. loss of use of any property, does not apply to the cover provided under this extension. ### Refrigerated goods You are insured for: 1. accidental loss to goods in refrigerated cabinets or chambers arising from accidental stoppage, damage, or malfunction of refrigerating plant. The words "goods in refrigerated cabinets or chambers" are deemed to include goods that are at the situation at the time of the event and that would, but for the event, have been placed in the refrigerated cabinets or chambers; and 2. expenses reasonably incurred to avoid or minimise the loss insured by 1. above by either transferring the threatened goods to alternative storage or by other means; provided that this extension does not cover damage due to the disconnection of the public electricity supply where the electricity supplier has given more than 24 hours prior notice of disconnection. The most we will pay under this extension is $10,000 for any one event unless a different amount for Refrigerated Goods is shown in the schedule. The following Policy Exclusions do not apply to the cover provided under this extension: (a) Policy Exclusion – Losses Not Covered – 1.(a) action or effects of micro-organisms, mould, mildew, rot, fungi; (b) Policy Exclusion – Losses Not Covered –1.(b) gradual deterioration; (c) Policy Exclusion – Losses Not Covered – 2.(a) loss immediately preceded by interruption of the supply of water, gas, electricity, or any fuel to the situation; (d) Policy Exclusion – Losses Not Covered 2.(c) loss immediately preceded by a change in artificially controlled temperature or atmosphere; and (e) Policy Exclusion Damage to Machinery. ### Rewards cover You are insured for a reward that you offer and pay to successfully secure the return of insured property that suffers accidental loss, provided that: 1. the loss is covered under this policy, and 2. you have our prior approval to offer the reward. ### Smoke damage For the avoidance of any doubt where adjoining or adjacent premises that are not owned by or occupied by you or in your care, custody or control are damaged by fire, any damage to insured property by smoke, or by water or other material used in the extinguishing of the fire, is deemed to be fire damage to the insured property. Policy Exclusion – Losses Not Covered – 3.(c) fumes, gas, dust, smoke or soot does not apply to the cover provided under this extension. ### Social club cover You are insured for accidental loss to property and money of any: 1. social club, and/or 2. sports club or similar body, provided that the clubs' activities are principally for the benefit of your employees. We will cover: 1. this property as if it were contents, and 2. money on the same basis as provided by Automatic Extension: Money Cover. ### Stolen keys cover You are insured for the reasonable costs to: 1. open a safe or strong room, and 2. alter or replace locks, keys and combinations that give access to your insured property, provided that the costs are incurred because the keys or combinations are: 1. stolen, or 2. believed on reasonable grounds to have been duplicated without proper authority, during the period of insurance. Policy Exclusion – Losses Not Covered – 5.(a) theft or attempted theft does not apply to the cover provided under this extension. ### Subsidence This policy extends to cover accidental loss or damage to any insured property directly or indirectly consequent upon: 1. subsidence, that is neither gradual nor progressive, of land beneath or adjacent to the affected property; and/or 2. the movement (whether by way of sinking, collapsing, sliding or flowing) of ground; but excluding: (a) landslip; (b) compaction or erosion of soil; (c) the normal settling, expansion or shrinkage of any building or its foundations; and/or (d) movement as a result of the water-table drying out from atmospheric or climatic conditions. The most we will pay under this extension is $500,000 for any one event. An excess of $15,000 applies for each event under this extension, unless a higher amount appears in the schedule. The following Policy Exclusions do not apply to the cover provided under this extension: (a) Policy Exclusion – Losses Not Covered – 6.(b) landslip and subsidence; and (b) Policy Exclusion – Losses Not Covered – 6.(e) settling, warping or cracking caused by earth or other movements. ### Sustainable rebuilding costs You are insured for the reasonable costs you incur to upgrade the building with sustainable products following a loss covered by this policy, provided that: 1. the building is destroyed, and 2. the 'Basis of Settlement – Reinstatement' applies to the building, and 3. you replace the building, and 4. the sustainable products are first approved by us. The most we will pay under this extension for any event is: 1. 5% of the actual cost to replace the building, or 2. $250,000 in total, whichever is the lesser. Payment under this extension is included within the building sum insured. Refer to 'What We Will Pay – Maximum Amount Payable'. ### Temporary removal cover You are insured for accidental loss to contents while temporarily removed from the situation to another location within New Zealand but excluding while in transit to that location. The most we will pay under this extension shall not exceed that which would have been recoverable had the loss occurred at the situation. ### Tenanted premises You are insured for accidental loss to: 1. glass, and 2. doors and windows, and 3. light fittings and power points, and 4. floor coverings, that are not owned by you at the situation, provided that: 1. you are responsible to arrange and bear the cost to repair them under the terms of your lease agreement, and 2. the provisions of sections 268 to 272 of the Property Law Act 2007 do not release you from this responsibility. ### Theft cover You are insured for accidental loss to insured property caused by theft occurring: 1. at the situation, or 2. when the insured property is covered by: (a) Automatic Policy Extension Portable Electronic Equipment, or (b) Automatic Policy Extension Temporary Removal Cover, or (c) Automatic Policy Extension Transit Cover, or (d) Automatic Policy Extension Unspecified Locations, or (e) Automatic Policy Extension Working from Home. An excess of $2,500 applies for each event under this extension, unless a higher excess for Theft Cover is shown in the schedule. Policy Exclusion - Losses Not Covered – 5.a) theft or attempted theft does not apply to the cover provided under this extension. ### Transit cover You are insured for accidental loss to contents and/or stock during any transit beginning and ending within New Zealand. We will include your liability for general average and salvage charges where the contract of carriage or governing law and practice make you liable for such payments. No cover is provided under this extension for: (a) contents and/or stock otherwise insured under another insurance policy, or (b) portable electronic equipment. The most we will pay under this extension is: 1. $5,000 any one portable tool of trade, including their standard accessories, and 2. $25,000 in total for any event, unless a different amount for Transit Cover is shown in the schedule. Policy Exclusion – Types of Property Not Covered – 6. Insured property that is in transit does not apply to the cover provided under this extension. ### Unharmed property cover You are insured for the reasonable cost to: 1. damage, demolish or remove, and 2. subsequently repair, replace or reassemble, to a condition the same as but not better nor more extensive than its condition immediately prior to the damage, demolition or removal insured property that has not suffered accidental loss, if this action becomes necessary to repair or replace insured property that has suffered a loss which is covered by this policy. We will pay these costs provided that they are not being incurred solely to comply with any regulations. ### Unspecified locations You are insured for accidental loss to contents and/or stock while situated at any unspecified location in New Zealand away from the situation but excluding while in transit. This extension does not apply to: 1. contents and/or stock that are temporarily removed, and 2. any portable electronic equipment, and 3. any office equipment while situated at the residence in New Zealand of any of your employees, and 4. any portable tools of trade. The most we will pay under this extension is: 1. $50,000 for any event, or 2. the sum insured for contents and/or stock, whichever is the lesser, unless a different amount for Unspecified Locations is shown in the schedule. ### Working from home You are insured for accidental loss to office equipment while situated at the residence in New Zealand of any of your employees for the purpose of working from home. The most we will pay under this extension is: 1. $10,000 for any event, or 2. the sum insured for contents, whichever is the lesser, unless a different amount is shown in the schedule. If any of the office equipment is a computer system: 1. Policy Exclusion Computer System and Data does not apply to that office equipment; 2. There is no cover under this extension for: (a) Computer software, computer system records, and data, including the replacing or reproducing of information contained in or on them; (b) the loss of value of the information contained in or on computer software, computer system records and data. 3. This extension does not apply to any accidental loss or damage in any way connected to a cyber act or to any action taken in controlling, preventing, suppressing or remediating any cyber act. --- ## Optional policy extensions These optional extensions only apply where specified in the schedule. Unless expressly stated otherwise: (a) any amounts payable under these Optional Policy Extensions are included within 'What We Will Pay – Maximum Amount Payable'. They are not additional; (b) these Optional Policy Extensions are subject to all terms, conditions and exclusions of this policy; (c) some Optional Policy Extensions may be subject to separate sub-limits and excesses, as specified. ### Machinery breakdown You are insured for accidental loss of any machine from mechanical or electrical breakdown, derangement or failure. The most we will pay under this extension is $10,000 any one event, and in total during the period of insurance. This sub-limit applies to the combined Material Damage loss covered under this policy and the business interruption loss covered under your business interruption policy. This extension does not provide cover for loss to lighting or heating elements, fuses or protective devices, or electrical contacts where sparking or arcing occurs as part of its normal function. For the purpose of this extension the following definitions apply: **breakdown** The actual stopping or failing of the machine due solely to internal stress or a fault in the machinery whilst in use and not by any cause external to the affected machine. Policy Exclusion Damage to Machinery does not apply to the cover provided under this optional extension. ### Natural disaster cover You are insured for natural disaster damage to insured property. The excesses shown in the schedule will apply to the aggregate of: 1. all natural disaster damage claims under this policy, and 2. all natural disaster damage claims under the business interruption policy (if applicable), arising from any one event at each common site are shown in the policy schedule. Where the insured property that suffers natural disaster damage has been temporarily removed, the site sum insured excess applicable will be that of the insured property's original situation. Where insured property is covered wholly or in part by the Natural Hazards Insurance Act 2023 (NHI Act), the following applies: #### 1. What we will pay if Toka Tū Ake Natural Hazards Commission (NHC) Cover applies If NHC Cover applies: (a) this policy only pays in excess of the maximum cover under the NHI Act, and (b) the most we will pay for loss to insured property from any event is the difference between your NHC entitlement (whether or not that is actually paid to you) and 'What We Will Pay – Maximum Amount Payable' under this policy for that loss. (c) This policy does not insure imminent damage as determined by the NHC under the NHI Act. ##### Imminent damage (under the NHI Act) means: any physical loss or damage to a residential building or residential land that has not yet occurred if: i. a natural hazard has occurred ('the initial event') and ii. NHC is of the opinion that, as a direct result of 'the initial event', the loss or damage is more likely than not to occur within 12 months after 'the initial event' first occurred. ##### NHC entitlement means An amount payable to you or for your benefit by the NHC as a result of loss to the insured property; and any amount that would have been payable but for: 1. the application of an excess under the NHI Act, 2. a failure by you to correctly notify a claim to the NHC within the time required under the NHI Act, 3. a decision by the NHC to decline a claim or limit its liability for that loss in whole or in part and for any reason whatsoever, 4. any act or omission on your part, the part of your agent, or the part of the NHC. #### 2. Excess The natural disaster damage excess is reduced by any payment made by the NHC except for payments for land. The following Policy Exclusions do not apply to the cover provided under this optional extension: (a) Policy Exclusion – Losses Not Covered – 6.(b) landslip or subsidence; (b) Policy Exclusion – Losses Not Covered – 6.(e) settling, warping or cracking caused by earth or other movements; and (c) Policy Exclusion Natural Disaster. ### Seasonal stock adjustments Where stock has suffered a loss covered by the policy, the maximum amount payable for stock is increased by 20% for the months of: October, November and December, unless another percentage or period for the Seasonal Stock Increase is shown in the schedule. The percentage increase under this optional extension is payable in addition to 'What We Will Pay – Maximum Amount Payable'. --- ## Exclusions ### Types of property not covered This policy does not insure: 1. any insured property during: (a) demolition, or (b) installation, construction or erection, or (c) testing and commissioning following 1.(b) above. 2. jewellery, precious stones, furs, precious metals or bullion, except if any of these items are: (a) stock of your business, or (b) a component of any plant or machinery that is insured under this policy as contents. 3. any of the following (including plant attaching to, or accessories in or on any of them): (a) any vehicle or trailer that is required to be registered or licensed to travel on a public road, (b) any mechanically or electrically propelled vehicles (including railway locomotives and rolling stock), (c) watercraft of any kind, (d) aircraft of any kind, except if any of these items are stock of your business, and at the time of the loss they are at the situation and are: (i) stationary, or (ii) not in operation, or (iii) not being used, 4. any of the following property: (a) standing timber or growing crops, (b) live plants including any trees, shrubs, hedges or grass, other than those forming part of landscaping, (c) livestock, (d) any living creature, (e) dams, canals, or reservoirs, (f) road bridges or road tunnels, (g) railways, railway bridges or railway tunnels, (h) docks, piers, or wharves, (i) mining property located below ground level, (j) any land, earth or fill (including topsoil and backfill), (k) transmission and distribution lines not located at the situation, (l) property located outside New Zealand, except if the item of property is specifically listed in the schedule as being insured. 5. money. 6. insured property that is in transit away from the situation. ### Losses not covered This policy does not insure: 1. loss directly or indirectly caused by or resulting from: (a) action or effects of micro-organisms, mould, mildew, rot, fungi, other than direct loss by fire as a result of any of these, or (b) gradual deterioration, other than direct loss by fire as a result of this. 2. loss immediately preceded by any of the following: (a) interruption of the supply of water, gas, electricity, or any fuel to the situation, (b) total or partial stoppage of work, or interruption or cessation of any process, (c) a change in artificially controlled temperature or atmosphere. 3. loss directly caused by or resulting from any of the following: (a) action of vermin or pests, (b) action of light, or inherent nature of the property (including shrinkage, evaporation, loss of weight, change of flavour or colour or texture or finish), (c) fumes, gas, dust, smoke or soot, (d) maintenance of insured property including servicing, cleaning and subsequent testing, (e) spontaneous fermentation, (f) wear and tear, corrosion or rust, (g) marring or scratching, (h) slowly developing deformation or distortion This exclusion only applies to the insured property, or to the part of the insured property (as applicable), directly affected. It does not apply to any resultant accidental loss to separate insured property, or to other parts of the same insured property (as applicable). 4. loss that is: (a) only evidenced by an unexplained disappearance, (b) only revealed by the taking of an inventory, (c) due to clerical or accounting errors. 5. loss caused by any of the following: (a) theft or attempted theft, (b) any fraudulent scheme or device, or false pretence practised on you or any other person, (c) theft, attempted theft or fraud by you or an employee of yours. 6. loss following any of these events: (a) exposure to weather conditions if the property is not designed to be left in the open (unless reasonable precautions have been taken to protect the property from those conditions), (b) landslip or subsidence, (c) erosion or expansion of the ground, (d) normal settlement, normal shrinkage or expansion of buildings, foundations, walls, pavements, roads and other structural improvements. (e) settling, warping or cracking caused by earth or other movements. ### Building defects This policy does not insure loss as a result of or in connection with the failure of any building or structure to contain or incorporate: (a) materials; or (b) a design; or (c) a system; or (d) a standard of workmanship; that effectively prevents or manages the presence or penetration of moisture or water to which the building or structure might reasonably be subjected. This exclusion does not apply to loss that is caused by or directly arises from the leakage of internal pipes, internal water reticulation systems or internal cisterns. ### Communicable disease This policy does not insure any loss, liability, claim, cost, expense or other sum of whatsoever nature (including any increased or additional costs or expenses of a claim to which this exclusion does not otherwise apply) directly or indirectly arising out of, contributed to by, or in connection with: (a) communicable disease; or (b) fear or threat (whether actual or perceived) of communicable disease; or (c) actions taken by any person, entity or public authority to response to, control, prevent or suppress communicable disease; regardless of any other cause or event contributing concurrently or in any other sequence. ### Computer system and data 1. This policy does not insure any loss, liability, cost, expense or other sum of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a computer system. Subject to the other terms, conditions and exclusions of this policy, this exclusion does not apply to loss to insured property except where such loss is directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with: (a) a cyber act, or (b) any action taken in controlling, preventing, suppressing or remediating any cyber act. 2. This policy does not insure against any loss, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with: (a) total or partial destruction, distortion, erasure, corruption, alteration, misinterpretation or misappropriation of data, (b) error in creating, amending, entering, deleting or using data, (c) total or partial inability or failure to receive, send, access or use data for any time or at all, (d) any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any data, including (e) any amount pertaining to the value of such data, from any cause whatsoever, regardless of any other contributing cause or event whenever it may occur. ### Confiscation This policy does not insure loss in connection with confiscation, nationalisation, requisition or destruction of, or damage to property by order of government, public or local authority (unless the order is given to control any immediate and imminent threat of loss provided that the loss would be covered by this policy if it did occur). ### Consequential financial loss This policy does not insure any kind of consequential financial loss (e.g. financial loss that occurs as a direct or indirect result of the loss of insured property), including the following: 1. delays, 2. loss of market, 3. penalties, 4. rates, taxes, duties, development charges, 5. other charges or assessments arising out of capital appreciation, that are payable to comply with any regulations, 6. loss of use of any property. ### Costs not insured This policy does not insure the cost of putting right: (a) or repairing or replacing faulty materials; (b) faulty workmanship; (c) work performed to a faulty or defective design, plan or design specification; or (d) faulty or defective work where the fault or defect results from an error or omission in design, plan or design specification; connection with any loss of, alteration of, or damage to or a reduction in the functionality, availability or operation of a computer system. Subject to the other terms, conditions and exclusions of this policy, this exclusion does not apply to loss to insured property except where such loss is directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with: (a) a cyber act, or (b) any action taken in controlling, preventing, suppressing or remediating any cyber act. 2. This policy does not insure against any loss, liability, cost or expense of whatsoever nature directly or indirectly caused by, contributed to by, resulting from, arising out of, or in connection with: (a) total or partial destruction, distortion, erasure, corruption, alteration, misinterpretation or misappropriation of data, (b) error in creating, amending, entering, deleting or using data, (c) total or partial inability or failure to receive, send, access or use data for any time or at all, (d) any loss of use, reduction in functionality, repair, replacement, restoration or reproduction of any data, including (e) any amount pertaining to the value of such data, from any cause whatsoever, regardless of any other contributing cause or event whenever it may occur. (e) altering or modifying any part of any refrigeration or air conditioning plant to enable the plant to operate with a more ozone friendly refrigerant; but this exclusion does not apply to any consequential damage occurring as a result of (a) to (e) above that is not otherwise excluded. ### Damage to machinery This policy does not insure any machinery breakdown of a machine. This does not apply: (a) where sudden and accidental loss covered under this policy (or that would have been covered if the property was insured under this policy) occurs completely outside the machine resulting in the machinery breakdown occurring. However, this proviso does not apply to machinery breakdown resulting directly or indirectly from any: (i) error in setting, programming or operating the machine, or (ii) stock or part of the machine being drawn into the machine, or (iii) failure to service or maintain the machine correctly, or (b) to resultant accidental loss to other parts of the machine that is not machinery breakdown. ### Damage to boilers and pressure vessels This policy does not insure the cost of repairing or replacing any part of a boiler or pressure vessel that suffers loss through: 1. explosion, overheating, rupture, bursting or collapse (but not pressure caused by chemical explosion), or 2. cracking or leaking. This exclusion does not apply to any resultant accidental loss to other parts of the boiler or pressure vessel arising from the above. ### Illegal substances This Policy does not insure loss to insured property arising from the manufacture, supply, storage, possession, distribution or use of any controlled drug as defined in the Misuse of Drugs Act 1975 including methamphetamine, or any pre-cursor chemicals or materials used in any of these activities in or near the insured property. This exclusion does not apply to loss to insured property caused by fire or explosion, including resulting smoke damage. ### Natural disaster This policy does not insure natural disaster damage. ### Nuclear There is no cover under this policy for any claim, loss, damage, liability, death or disablement resulting from or directly or indirectly caused by or arising in connection with: nuclear weapons material, ionising radiations or contamination from any nuclear fuel, or from any nuclear waste which results from the combustion (including self sustaining process of nuclear fission) of nuclear fuel. ### Production processes This policy does not insure loss to insured property while undergoing any production process where any part of that production process (including any accidental modification of the process), causes or contributes towards the loss in any way. ### Seepage, pollution and contamination This policy does not insure loss in connection with seepage, pollution or contamination except if the seepage, pollution or contamination results from sudden and accidental loss to insured property, which is otherwise covered under this policy. ### Seismic strengthening This policy does not insure any additional cost necessary only to comply with regulations applicable to the repair, replacement or reinstatement of damaged insured property (or any portion of it) in connection with: (i) property being an earthquake-prone building as described in the Building Act 2004 (and any substitution of, or amendment to, replacement of or statutory regulation made under this Act); or (ii) the seismic capacity of the property; or (iii) the performance of the property in an earthquake. For the avoidance of doubt, the costs to reinstate the level of seismic capacity or earthquake performance which applied to the insured property prior to the damage are not excluded by this policy. ### Terrorism This policy does not insure any loss, damage, liability, death, injury, illness, or any other form of cover otherwise available under this policy of whatsoever nature directly or indirectly caused by, resulting from or arising in connection with: any act of terrorism regardless of any other cause or event contributing concurrently or in any other sequence to such loss, damage, liability, death, injury, illness, cost or expense or action taken in controlling, preventing, suppressing or in any way relating to any act of terrorism. ### Transmission and distribution lines This policy does not insure any above ground transmission and distribution lines, including wires, cables, poles, pylons, standards, towers, other supporting structures and any equipment of any type which is related to such installations. This exclusion applies to all equipment other than that which is on or within 300 metres of an insured structure and which is your responsibility. This exclusion applies both to physical loss to the equipment and all business interruption, consequential loss, and/or other contingent losses related to transmission and distribution lines, other than losses following loss or damage not excluded in the above paragraph and/or as insured under the Contingent Business Interruption automatic extension of the business interruption policy. ### War There is no cover under this policy for any claim, loss, damage, liability, death or disablement resulting from or directly or indirectly caused by or arising in connection with: war, invasion, act of foreign enemy, hostilities or warlike operations (whether war is declared or not), civil war, civil commotion assuming the proportions of or amounting to a popular rising, military rising, mutiny, rebellion, revolution, insurrection, military or usurped power. --- ## How we will pay ### Basis of settlement: Reinstatement This basis of settlement applies to those items or categories of insured property that are shown on the schedule to be insured for Reinstatement. In the event of any insured property to which this basis of settlement provision applies suffering loss, the basis on which the amount payable is to be calculated will be the cost of reinstatement of that property. Insurance under this basis of settlement provision is subject to the special provisions set out below. No insured property that has suffered loss will be considered destroyed for the purposes of this basis of settlement provision by reason only of any cost in reinstatement to comply with regulations which is not payable under this basis of settlement provision. **Equivalent building** means a building or structure that is nearly as practicable the same as the building or structure lost or destroyed, using modern equivalent materials, skills and techniques that are readily available in the country that the lost or destroyed building is located in, and incorporating such alterations that are necessary to comply with any regulations that are in force on the date that the loss occurs, but subject to any limitations or exclusions to such regulations in this Material Damage policy. Where, as a result of any special circumstances no building or structure that falls within the scope of the paragraph above: (a) can be constructed: a building or structure that is designed to perform a purpose or function the same as or equivalent to (but not more extensive than) that performed by the building or structure lost or destroyed; or (b) is suitable to your reasonable requirement: then with our consent (which will not be unreasonably withheld), a building or structure that is designed to perform a purpose or function suitable to that requirement, but not more extensive than that performed by the building or structure lost or destroyed. **Equivalent plant** means any plant or equipment as nearly as practicable the same as or equivalent to the plant or equipment lost or destroyed, having regard to the current state of technology, and having an equivalent capacity to that of the lost or destroyed plant or equipment, but not greater capacity unless plant or equipment with an equivalent capacity is not available and the replacement plant or equipment has the nearest to an equivalent capacity. **Reinstatement** means in respect of insured property that has suffered loss: (a) where property is destroyed, its replacement by an equivalent building or by equivalent plant as the case may require; or (b) where property has suffered loss but is not destroyed, the restoration of the damaged portion of the property to a condition substantially the same as, but not better or more extensive than, its condition when new, using modern equivalent materials, skills and techniques that are readily available and which, if the property is a building, are readily available in the country that the building is located in. #### Special provisions: ##### 1. Compliance with regulations The amount payable under this basis of settlement provision will include the cost incurred in reinstatement which is necessary to comply with any regulations that are in force on the date that the loss occurs. Provided that the amount payable will not include any such cost: (a) to the extent to which the work had already been required of you by notice served before the happening of the loss; or (b) in respect of undamaged property or undamaged portions of property (unless foundations are expressly excluded from the insurance under this Material Damage policy) whether or not the undamaged property or portion comprises a separate building or structure or a separate item of plant or equipment; or (c) to the extent to which the work is required, whether in whole or in part, because damaged (but not destroyed) property (or any portion of it): (i) is an earthquake-prone building as described in the Building Act 2004 (and any substitution of, or amendment to, replacement of or statutory regulation made under this Act); or (ii) does not comply with any regulations applicable at the time of reinstatement in connection with: – the seismic capacity other than foundations of the property; or – the performance of the property in an earthquake. whether or not the work is also required in order to comply with any other regulations. Notwithstanding any other provision in this basis of settlement provision or the Material Damage policy, we are not liable to pay any cost incurred in reinstatement which is necessary to comply with regulations other than in accordance with the terms of this special provision. ##### 2. Site of reinstatement Where property is destroyed the work of reinstatement must be carried out on the same site. The work may be carried out upon another site only: (a) where reinstatement on the same site is not permissible by reason of any regulations; or (b) where reinstatement on the same site is not suitable to your reasonable requirements, in which case, and with our consent (which will not be unreasonably withheld), reinstatement may be carried out on an alternative site in the same country as the current site. ##### 3. Limitations on amount payable (a) Where the work of reinstatement is carried out in terms of paragraphs (a) or (b) of the equivalent building definition, or on any location other than the original location at the same site, our liability in respect of the cost of reinstatement will not exceed the cost that would have been incurred had reinstatement been carried out in terms of the first paragraph of the equivalent building definition on the original location. (b) Where the insured property is damaged but not destroyed, our liability will not exceed the amount we could have been called upon to pay for reinstatement if the property had been destroyed. ##### 4. Circumstances where this basis of settlement provision does not apply No payment, beyond the amount that would have been payable had this basis of settlement provision not been incorporated in this Material Damage policy, will be made: (a) if you elect not to reinstate the property; (b) if the work of reinstatement is not commenced and carried out with reasonable despatch; (c) until the cost of reinstatement has been actually incurred; or (d) where a building or structure is damaged, but not destroyed, and the repair of the loss is not permissible by reason of any regulations, or by reason of the undamaged portion of the property. Where, by reason of any of these circumstances, no payment is to be made beyond the amount that would have been payable if this basis of settlement provision had not been incorporated in this Material Damage policy, your and our rights and liabilities in respect of the loss will be the same as if this basis of settlement provision had not been incorporated in this Material Damage policy. ##### 5. Valuation of the property (a) Prior to the commencement of each period of insurance, and in respect of that period, at our request you must provide us with a certificate by a valuer approved by us specifying the estimated cost of reinstatement (as defined in this policy) of any item or items of insured property to which this basis of settlement provision applies. (b) The certificate must also contain such other estimates or information as we may reasonably require. (c) The sum to be insured under this basis of settlement provision in respect of each item will not be less than the amount specified in the certificate in respect of that item, unless we have agreed in writing to a lesser sum to be insured. ### Additional costs you are covered for Where insured property has suffered a loss covered by this policy, then included in 'What We Will Pay - Maximum amount payable' for the insured property are: #### Fees and Other Costs Necessary and reasonable costs incurred for: 1. architect's, engineer's, surveyor's, building consultant's fees, and/or 2. consents and associated legal fees, and/or 3. training consultants and IT technicians, to repair or replace the damaged, lost or destroyed insured property following a loss covered by this policy. Payment under this provision is included within the building sum insured. Refer to 'What We Will Pay – Maximum amount payable'. #### Claims Preparation Costs Necessary and reasonable costs incurred to assess or prepare a claim following a loss covered by this policy, provided you are unable to recover such costs under a separate business interruption policy. You are not insured for any costs incurred to investigate or negotiate a claim made under this policy. The most we will pay for any event is $25,000. Payment under this provision is included within the building sum insured. Refer to 'What We Will Pay – Maximum amount payable'. ### Basis of settlement: certain types of property The method of indemnity for the following types of insured property will be as follows, regardless of any basis of settlement shown in the schedule to the contrary. #### Stock For loss to stock that is not customers' goods, we will indemnify you by using one of the following methods: 1. for raw materials, supplies and other merchandise not manufactured by you: (a) the replacement cost at the time of replacement, provided that the replacement is carried out within a reasonable period of time, or (b) if this property is not replaced, the market value of it at the time and place of the loss. 2. for materials in the process of manufacture: the replacement cost of the raw materials and the cost of labour and other overhead charges expended at the time of the loss. 3. for finished goods: the replacement cost of the raw materials and the cost of labour and other overhead charges expended before any allowance for profit, or the cost of re-stocking these goods, whichever is the lesser. For loss to stock that is customers' goods, we will at our option pay: 1. the indemnity value of the customers' goods, or 2. the cost to repair the customers' goods, as near as reasonably possible, to the condition they were in immediately prior to the loss. #### Works of Art Where there is loss to insured property comprising a work of art, we may appoint an independent and suitably qualified valuer or restorer to determine whether the work of art can be restored to its pre-damage condition. If the valuer or restorer determines that the work of art cannot be economically restored to its pre-damage condition, the work of art will be deemed destroyed. Its pre-damage value will be determined by the valuer, or, providing the restorer is suitably qualified, by the restorer. The amount payable as indemnity will be the difference between the pre-damage value and any salvage value of the damaged work of art. If the valuer or restorer determines that the work of art can be economically restored to its pre-damage condition, the amount payable as indemnity will be the cost of restoration or, if the restoration is not carried out, the restorer's reasonable estimate of the cost of restoration. In the event of the total loss of any work of art, or works of art, that forms part of a set, we agree to pay you the full amount of the value of such set and you agree to surrender the remaining article or articles of the set to us. Providing a work of art has been satisfactorily restored following loss, this insurance does not cover any diminution of value due solely to the fact of the work of art having been damaged and restored. The onus of proving that any restoration work is unsatisfactory rests with you. #### Software For loss to computer systems, we will pay the reasonable cost of restoring, re-setting or re-programming the software that is necessary to operate any computer system, electronic equipment or machine insured under this policy. #### Portable Electronic Equipment For loss to portable electronic equipment more than 3 years old we will at our option pay: 1. the indemnity value of the portable electronic equipment, or 2. the cost to repair the portable electronic equipment, as near as reasonably possible, to the condition it was in immediately prior to the loss. #### Limited Lifetime Construction Materials For loss to: 1. cladding, roofing or skylights, where they are made of plastic, polycarbonate, acrylic or PVC materials, and/or 2. any textile awnings or shade sails, we will at our option pay: (a) the indemnity value of the materials, or (b) the cost to repair the materials, as near as reasonably possible, to the condition they were in immediately prior to the loss. The indemnity value of the materials will be depreciated over the lifetime of the product based upon the manufacturer's UV rating. #### Office Equipment Upgrade For loss to office equipment, we will pay the cost for you to replace the equipment with an alternative model(s) of office equipment, provided that: 1. the alternative model has more energy-efficient features, and 2. the alternative model has otherwise comparable features and capabilities, and 3. the office equipment is destroyed, and 4. we approve the upgrade. --- ## What we will pay ### Maximum amount payable The amounts shown in the schedule of insured property are the sums insured declared by you for insurance purposes. The maximum we will pay in total during the period of insurance for loss or damage to any item of insured property will not exceed 110% of the sum insured during the period of insurance for that item up to a maximum of the total sum insured in the schedule. Where sums insured have been declared to us or included on the schedule for more than one situation, item and/or category of insured property, our liability will not exceed in respect of each situation, and each item or category of insured property at a situation, the 110% of the applicable sum insured. Any provision in this policy for our liability to be greater than the sum insured for any item does not apply to natural disaster damage. ### Reinstatement of sum insured once repaired The sum insured will only be reinstated as follows: If the insured property: 1. is automatically covered under this policy during its repair or replacement, the amount reduced will be progressively added back to the sum insured at the rate that the insured property that suffered the loss is progressively repaired or replaced. 2. is not automatically covered under this policy during its repair or replacement, the amount reduced will only be added back to the sum insured once the repair or replacement of the insured property that suffered the loss has been completed. The sum insured will not reinstate following natural disaster damage unless we have agreed to the reinstatement in writing. We may ask you to pay an additional premium for any reinstatement of the sum insured. ### Sum insured adjustment on renewal for unrepaired items The sum insured for any item of insured property that has suffered loss in any previous annual period and that has not been repaired or replaced at the start of the current annual period is: 1. the maximum amount payable for that item, less 2. the estimated cost of repairing or replacing the existing unrepaired or non-replaced loss. The sum insured will only be reinstated to its pre-loss level as follows: If the insured property: 1. is automatically covered under this policy during its repair or replacement, the amount reduced will be progressively added back to the sum insured at the rate that the insured property that suffered the loss is progressively repaired or replaced. 2. is not automatically covered under this policy during its repair or replacement, the amount reduced will only be added back to the sum insured once the repair or replacement of the insured property that suffered the loss has been completed. The sum insured will not reinstate following any claim arising from natural disaster damage unless we have agreed to the reinstatement in writing. We may ask you to pay an additional premium for any reinstatement of the sum insured. ### Sub limits If any sub limit in this policy is higher than the maximum amount payable for the applicable insured property as shown in the schedule, the sub limit does not apply and the most we will pay is the maximum amount payable. ### Items of insured property with limited cover The amount we will pay for some items of insured property is limited as follows: #### Customers' goods The most we will pay for customers' goods in total during an annual period is $20,000 unless a different amount for customers' goods is shown in the schedule. #### Site Improvements The most we will pay for site improvements at the site in total during any annual period is: 1. 5% of the maximum amount payable for building(s) at that site, or 2. $250,000, whichever is the lesser, unless a different amount for site improvements is shown in the schedule. #### Landscaping The most we will pay for landscaping at the site in total during any annual period is: 1. 5% of the maximum amount payable for building(s) at that site, or 2. $25,000, whichever is the lesser, unless a different amount for landscaping is shown in the schedule. #### Works of Art The most we will pay for any individual work of art for any event is $25,000 unless a different amount for that work of art is shown in the schedule. ### Excess Each loss or series of losses arising out of one event at any situation will be adjusted separately. The adjusted loss will be net of salvage and other recoveries. From each adjusted loss, the excess amount specified in the schedule will be deducted. A series of events arising from any one cause during any period of 72 consecutive hours will be treated as one event for the purpose of applying the excess. From the amount otherwise payable under the policy, we will deduct the excess amount or excess percentage shown in the schedule. The excess will in all cases apply to the adjusted loss within the coverage of the policy. ### One excess If a single event causes sudden and accidental loss to tangible property that you insure with us under this or any other policy only one excess will apply being the