> _Markdown transcription of Dual New Zealand Dual Management Liability policy wording, effective 2019-03-01. Source: https://nz.dualinsurance.com/hubfs/DUAL%20ANZ/DUAL%20New%20Zealand/NZ%20policy%20wording/DUAL-NZ-Management-Liability-Wording.pdf_ --- # DUAL New Zealand Mind the Gap Management Liability Policy Wording ## Section 1: Insuring Clauses ### 1.1 Cover for You **We agree to pay on behalf of each insured person all loss up to the indemnity limit arising out of any claim first:** a. made against such insured person, and b. reported to us **during the insurance period in respect of any:** a. Wrongful act; or b. Employment practice breach; or c. Trustee breach **for which the company is not permitted or required to indemnify the insured person.** Our liability under Insuring Clause 1.1 (Cover for You) shall (in respect of each insured person) only apply to that part of each loss which exceeds the deductible specified in the schedule and such deductible shall be borne by the insured person at their own risk. ### 1.2 Cover for the Company **We agree to pay on behalf of the company all loss up to the indemnity limit:** #### a. Crime First discovered during the insurance period which results from a dishonest act of an associated person acting alone or in collusion with others, or of a third party committed with the intention of causing the company to sustain a direct financial loss. The total amount payable by us under Insuring Clause 1.2 (a) (Crime) for any one direct financial loss and for all direct financial losses in the aggregate during the insurance period inclusive of costs and expenses shall not exceed the sub-limit specified in the schedule for this Insuring Clause. This sub-limit forms part of, and is not payable in addition to, the indemnity limit. #### b. D&O / Company Reimbursement In respect of any claim first: i. made against any insured person and ii. reported to us during the insurance period in respect of a wrongful act for which the company is permitted or required to indemnify the insured person. #### c. Entity In respect of any claim first: i. made against the company and ii. reported to us during the insurance period for a wrongful act. The total amount payable by us under Insuring Clause 1.2 (c) (Entity) for all such loss in the insurance period shall not exceed the sub-limit specified in the schedule for this Insuring Clause. This sub-limit forms part of, and is not payable in addition to, the indemnity limit. #### d. Employment Practices In respect of any claim first: i. made against the company, and ii. reported to us during the insurance period for an employment practice breach. The total amount payable by us under Insuring Clause 1.2 (d) (Employment Practices) for all such loss in the insurance period shall not exceed the sub-limit specified in the schedule for this Insuring Clause. This sub-limit forms part of, and is not payable in addition to, the indemnity limit. #### e. Trustee In respect of any claim first i. made against the company, and ii. reported to us during the insurance period for a trustee breach. #### f. Taxation Investigation Where during the insurance period the company has both received a tax audit notice and reported it to us, we will provide cover to the company for necessary and reasonable tax audit costs incurred by the company up to the completion of the audit or investigation. The total amount payable by us under this Insuring Clause 1.2 (f) (Taxation Investigation) in respect of all tax audit notices in the insurance period shall not exceed the sub-limit specified in the schedule. This sub-limit forms part of and is not payable in addition to the indemnity limit. Our liability under Insuring Clause 1.2 (Cover for the Company) only applies to that part of each loss which exceeds the deductible specified in the schedule and such deductible shall be borne by the company at its own risk. ### 1.3 Defence Costs in Addition **We agree to pay to or on behalf of the insured any defence costs in respect of a claim for loss, covered by this policy in addition to the indemnity limit, in an amount not exceeding the same indemnity limit.** We will only pay defence costs however if: a. We incur them; or b. The insured incurs them after obtaining our agreement in writing and the defence costs are in our view reasonable and necessary. We will not defend or continue to defend any claim to which the policy would provide indemnity, or pay or continue to pay any defence costs associated with such defence, once the defence costs indemnity limit has been exhausted. We also agree to advance defence costs in respect of such a claim before its final disposition. Payment will be made within 28 days of receipt of sufficiently detailed invoices for defence costs incurred. We will not rely on General Exclusion 6.8 (Dishonesty) until there is a judgment against, final adjudication against, or admission by the insured that the relevant conduct by the insured did occur. If we subsequently determine that the insured's loss under the policy is excluded the insured must reimburse us for any defence costs that we have paid in advance, according to the respective interests of the insured. ### 1.4 Retroactive Date This policy only provides cover in respect of wrongful acts, employment practice breaches, trustee breaches and dishonest acts committed or allegedly committed after the retroactive date. --- ## Section 2: Automatic Coverage Clauses The Automatic Coverage Clauses are subject to the Insuring Clauses above and all other policy terms. Unless expressly provided otherwise, the indemnities in the Automatic Coverage Clauses are subject to the deductible and are part of and not in addition to the indemnity limit. ### 2.1 Automatic Reinstatement for Insured Persons In the event of a reduction (in whole or in part) of the indemnity limit for insured persons as a result of payment by us of loss under Insuring Clauses 1.1 and/or 1.2 (b), we will reinstate the indemnity limit by the amount of such reduction on the following basis: a. the total amount payable by us under this policy shall not exceed twice the indemnity limit; and b. the cover under this Automatic Coverage Clause will only be available for insured persons for any subsequent loss in relation to any claim(s) based on facts and matters that are entirely different from and unrelated to those upon which the claim(s) is (or are) based and which led or contributed to the reduction referred to above. This additional benefit does not provide additional coverage in respect of the claim(s) that led or contributed to the reduction; and c. the maximum amount of loss payable by us for all insured persons under this Automatic Coverage Clause in respect of any number of claim(s) which arise out of or are attributable to or are in any way connected with a single wrongful act, or employment practice breach inclusive of all loss is the indemnity limit; and d. if the company or insured persons has or have in effect, or the benefit of, any policy or policies providing coverage in excess of this policy or any other policy, then the additional coverage provided by this clause will only take effect after the total exhaustion of any amounts payable under any such other policies but before any similar reinstatement provisions as may be contained in any such other policies take effect; and e. this provision shall only be available to you to the extent that you are an insured person. This clause does not apply in respect of Insuring Clauses 1.2(a) and 1.2(c) – 1.2(f) of this policy, or any Automatic Coverage thereunder. ### 2.2 Continuous Cover Notwithstanding General Exclusion 6.13 (Prior Knowledge) (a) and (b), we agree to provide cover in respect of any claim made in the insurance period where the insured: a. first became aware, prior to the insurance period, that a claim might or could arise from facts or circumstances known to it; and b. had not notified us of such facts or circumstances prior to the insurance period. **Provided that:** i. we were the insurer of the insured when the insured first became aware of such facts and circumstances; and ii. we have continued, without interruption, to be the insured's insurer up until this policy came into effect; and iii. there has not been any fraudulent non-disclosure or fraudulent misrepresentation by the insured in respect of such facts or circumstances; and iv. we have the discretion to apply either the terms of the policy on foot when the insured first became aware of the facts and circumstances, including but not limited to the indemnity limit and deductible, or the terms of this policy; and v. the insured agrees to only make a claim under one policy issued by us. For the purpose of this Automatic Coverage Clause only, the definition of we/us/our in Definition 5.59 also includes the Underwriter(s) for which we were the agent on any previous policy issued by us. Subject to the terms of this Automatic Coverage Clause and the terms of the policy, the intention of this Automatic Coverage Clause is to provide continuous cover to the insured notwithstanding any change in the identity of the Underwriters for which we presently act, or have previously acted, as agent. ### 2.3 Contractual Penalties We agree to pay on behalf of the insured any penalty for which the insured is liable under a written contract resulting directly from direct financial loss covered by this policy. The maximum amount payable under this Automatic Coverage Clause during the insurance period is the sub-limit specified in the schedule. ### 2.4 Crime Investigation Fees Under Insuring Clause 1.2 (a) Crime and subject to Clause 4.9 Notification of Direct Financial Loss, we will pay the reasonable and necessary fees, costs and expenses of a fraud investigator nominated by the company and approved in writing by us to establish the amount of any direct financial loss notified to us and covered by the policy, in excess of the deductible applicable for Insuring Clause 1.2 (a) Crime. The investigation fees do not include expenses incurred by the company. The fraud investigator shall: a. Investigate the facts behind such direct financial loss; and b. Determine the quantum of such direct financial loss, and c. Advise when and how the company's controls were or may have been breached; and d. Provide recommendations which may prevent future similar direct financial loss; and e. Issue their findings in a report format approved by us; and f. Provide a copy of the report to the company and to us. We will pay for the reasonable and necessary fees, costs and expenses of the fraud investigator provided the direct financial loss is ultimately determined to be covered under this policy. The sub-limit for this Automatic Coverage Clause is specified in the schedule and is in addition to the sub-limit applicable for Insuring Clause 1.2 (a) Crime displayed in the schedule. ### 2.5 Crisis Containment We shall reimburse the company for crisis loss in excess of the deductible which the company incurs by reason of a crisis event which first occurs and is notified to us during the insurance period. ### 2.6 Discovery Period The insured may give written notice to us during the discovery periods as specified in (a) to (c) below of any claim first made in respect of a wrongful act or dishonest act occurring prior to the end of the insurance period. If written notice is given to us: a. within 30 days of the end of the insurance period, then we will grant cover automatically with no additional premium payable; or b. within 12 months of the end of the insurance period, then we will grant cover if the insured requests such period in writing within 15 days after the end of the insurance period and tenders an additional premium of 100% of the annual premium level within 30 days of the end of the insurance period; or c. within 84 months of the end of the insurance period, then we will grant cover if a transaction takes place and the insured requests such period in writing within 30 days following the end of the insurance period, on such terms and conditions, if any, and for such additional premium as we may reasonably decide. This Automatic Coverage Clause is not available if this policy is: a. renewed or replaced with any other Directors and Officers or Management Liability policy; or b. cancelled or avoided. Any discovery period purchased under this Automatic Coverage Clause is non-cancellable, and the premium paid for the discovery period is non-refundable. ### 2.7 Disposal of Subsidiary We agree to pay to or on behalf of the insured direct financial loss sustained by any subsidiary sold, otherwise disposed of or liquidated during the insurance period and which was previously insured by us under this policy if the direct financial loss: a. is discovered after the date of sale, disposal or liquidation and before the expiry of this policy; and b. was caused by a dishonest act committed before the date of sale, disposal or liquidation. Any part of such direct financial loss that was caused by a dishonest act committed after the date of sale, disposal or liquidation is not covered by this Automatic Coverage Clause. ### 2.8 Emergency Defence Costs Notwithstanding any provision in the policy to the contrary, if it is not possible for the insured to obtain our written consent prior to incurring defence costs, we will waive prior consent provided that our consent is obtained within 30 days of the first of such defence costs being incurred. If we subsequently determine that there is no entitlement under the policy for any defence costs that we have paid under this clause, the insured must repay those amounts to us immediately. A separate deductible will apply under this Automatic Coverage Clause, as specified in the schedule. The deductible is inclusive of defence costs, unless otherwise specified in the schedule. ### 2.9 Employee Plans We agree to pay on behalf of the company direct financial loss covered by this policy which is sustained by an employee plan. Any amount payable by us under this Automatic Coverage Clause shall be paid solely for the benefit of the employee plan which has sustained the direct financial loss and the company shall not be entitled to any payment in respect of the direct financial loss. For the purposes of this Automatic Coverage Clause only, employee includes an employee of an employee plan and an employee plan shall be deemed to be an insured. ### 2.10 Extortion We agree to pay to or on behalf of the insured direct financial loss covered by this policy caused by money or securities being paid or surrendered by an associated person from the premises as the direct result of extortion provided that before such payment or surrender occurs the person who is the victim of the extortion has made reasonable effort to inform the company of the extortion and the company has reported the extortion to the police. ### 2.11 Former Subsidiary Cover We agree to provide cover in respect of any company that ceases to be a subsidiary during the insurance period or prior to commencement of the insurance period, provided that the cover provided shall only apply in respect of a wrongful act, employment practice breach, trustee breach or dishonest act that occurred whilst the entity was a subsidiary of the company. ### 2.12 Heirs, Estates and Legal Representatives We agree to provide cover to the estate, heirs, legal representatives or assigns of any deceased or mentally incompetent, bankrupt or insolvent insured person in respect of loss arising from a wrongful act, employment practice breach or trustee breach committed by an insured person that is covered under this policy. It is a condition of this Automatic Coverage Clause that any estate, heirs, legal representatives or assigns will observe and be subject to all applicable provisions of this policy. ### 2.13 Insured v Insured – Defence Costs Notwithstanding Exclusion 3.5 (Insured v Insured) of the policy, we agree to pay defence costs in respect of: a. any claim brought or maintained by the company for contribution or indemnity, if the claim directly results from another claim otherwise covered under the policy; b. any claim brought or maintained on behalf of the company or any outside entity by any external administrator to the company or any outside entity (including but not limited to a liquidator, receiver, administrator or other external administrator) where such external administrator is appointed by a Court and such claim is brought without the solicitation, assistance or co-operation of any insured person or director, officer, trustee, governor or equivalent position in any outside entity, except when such solicitation, assistance or cooperation is required by law; c. any shareholder derivative action brought or maintained on behalf of the company or any outside entity without the solicitation, assistance or co-operation of an insured person or director, officer, trustee, governor or equivalent position in any outside entity, except when such solicitation, assistance or cooperation is required by law; or d. any claim instigated by any regulatory authority on behalf of the company or any outside entity without the solicitation, assistance or co-operation of an insured person or director, officer, trustee, governor or equivalent position in any outside entity, except when such solicitation, assistance or co-operation is required by law. ### 2.14 Interest Receivable or Payable We agree to pay to or on behalf of the company any interest actually lost or paid by the company directly in respect of direct financial loss covered by this policy provided that our liability under this Automatic Coverage Clause shall be calculated by applying the average of the Reserve Bank of New Zealand base rate in force between the time that the direct financial loss is sustained and the date of discovery of the loss. The sub-limit of liability for all such payments under this Automatic Coverage Clause is the amount specified in the schedule. This sub-limit forms part of, and is not payable in addition to, the indemnity limit. ### 2.15 Internet Liability Notwithstanding Exclusion 3.3 (Defamation, Breach of Privacy and Intellectual Property), we agree to provide cover in respect of any claim for an internet error committed or alleged to have been committed by the insured via its internet site, use of the internet, electronic mail or any electronic network. We will not cover the insured, including for defence costs or loss, in respect of any claim arising from or directly or indirectly caused by, or in any way connected with: a. chat rooms, electronic bulletin boards or electronic open forum debates; or b. indecent, obscene, pornographic, adult or objectionable material of any kind or any matter prohibited by any law, rule or regulation. The sub-limit of liability for all such payments under this Automatic Coverage Clause is the amount specified in the schedule. This sub-limit forms part of, and is not payable in addition to, the indemnity limit. ### 2.16 New Subsidiary We agree to provide cover in respect of any subsidiary which is created or acquired by the company during the insurance period, provided that the subsidiary: a. has total gross assets which are less than 20% of the total gross assets of the company; and b. has gross annual turnover of less than 20% of the total gross annual turnover of the company; and c. has total gross assets which are less than 10% of the total gross assets of the company in the USA or Canada. The cover provided shall only apply in respect of a wrongful act, employment practice breach, trustee breach or dishonest act occurring after the date of creation or acquisition. ### 2.17 Occupational Health and Safety Notwithstanding Exclusion 3.1 (Bodily Injury / Property Damage), we agree to pay defence costs in respect of any claim that is both first made against an insured and first reported to us during the insurance period where such claim arises from a breach or alleged breach of the Health and Safety in Work Act 2015 (or any amendment or re-enactment thereof), or any other New Zealand or Australian legislation governing workplace conditions and procedures. This automatic extension will not apply if the insured has cover under a Statutory Liability Policy. ### 2.18 Official Investigations and Inquiries #### a. Cover for You We agree to pay defence costs incurred with our prior written consent for any attendance by an insured person for examination at any official investigation, examination or inquiry in relation to the affairs of the company or any other examination of the insured person by virtue of his/her position as a director of the company where such investigation, examination or inquiry may lead to a recommendation in respect of civil liability or civil proceedings which would be a claim covered under this policy. Notice of the official investigation, examination or inquiry must be both first received by the insured person and notified to us during the insurance period. #### b. Cover for the Company We agree to pay defence costs incurred with our prior written consent for any attendance by the company at any official investigation, examination or inquiry in relation to an allegation that the company has breached workplace health and safety laws or regulations or employment laws or regulations, where the attendance at the investigation, examination or inquiry may lead to a recommendation in respect of civil liability or civil proceedings which would be a claim covered under this policy. Notice of the official investigation, examination or inquiry must be first received by the company and notified to us during the insurance period. ### 2.19 Order Of Payment If the payment of loss in respect of a claim is due under this policy but the amount of such loss in the aggregate exceeds the remaining available indemnity limit, we shall: a. first pay such loss for which coverage is provided under Insuring Clause 1.1 (Cover for You) of this policy; then b. to the extent of any remaining amount of the indemnity limit available after payment under (a) above, pay such loss for which cover is provided under any other provision of this policy. ### 2.20 Outside Directorship Cover We agree to pay on behalf of the insured all loss arising out of any claim both first made against any insured person and first notified to us during the indemnity period, who was, is or may become, at the written request of the company, a director, officer, trustee, governor or equivalent position in any outside entity for any wrongful act, employment practice breach or trustee breach in such insured person's capacity as a director, officer, trustee, governor or equivalent position in the outside entity. This cover shall: a. only apply in excess of any insurance in respect of the outside entity as well as any indemnification provided by the outside entity, and; b. not apply in connection with any claim made against any insured person by any shareholder of the outside entity holding 15% or more of the issued and outstanding voting share capital of the outside entity, and; c. not apply in respect of any claim arising out of, based upon, attributable to or in any way whatsoever connected with the actual or alleged insolvency of any outside entity. ### 2.21 Panel Counsel The insured is entitled to one (1) hour free advice from any one firm listed on our panel of solicitors relating to a matter which we have accepted as notification of circumstances which may give rise to a claim under this policy. We consent to that firm listed on our panel of solicitors being retained to act for an insured in respect of any claim covered by this policy. ### 2.22 Physical Loss or Destruction of or Damage to Money or Securities We agree to reimburse the company for any physical loss or destruction of or damage to money or securities during the indemnity period caused by a dishonest act provided that such physical loss, destruction or damage occurs: a. within the premises; or b. inside any banking premises or similar recognised place of safe deposit; or c. whilst in transit and in the care, custody and control of the company or any security company or armoured motor vehicle company which is duly authorised by the company to have the care, custody or control of such money or securities. The amount payable under this Automatic Coverage Clause is limited to the excess of any valid and collectible indemnity, contractual or otherwise, available to the company, or which would be valid and collectible except for the application of an excess or the exhaustion of a policy limit. ### 2.23 Pollution Defence Costs Notwithstanding Exclusion 3.7 (Pollution), we agree to pay defence costs in relation to claims that are covered under this policy arising from or connected with the actual, alleged or threatened discharge of pollutants up to the sub-limit specified in the schedule. This sub-limit forms part of, and is not payable in addition to, the defence costs indemnity limit. ### 2.24 Positive Defence Costs For Claims We agree to advance defence costs before final disposition of a claim, where we have not determined the insured's right to indemnity for the claim. For clarity, we will not rely on Exclusion 3.10 (Wilful Conduct) or General Exclusion 6.8 (Dishonesty) until there is a relevant judgment, final adjudication or admission. If we subsequently determine that the insured's loss under the policy is excluded, the insured must reimburse us for any defence costs that we have paid in advance, according to the respective interests of the insured. ### 2.25 Public Relations Cover We agree to pay on behalf of the insured any public relations expenses incurred by the insured: a. in connection with an incident in order to prevent or minimise the risk of a claim which would be covered under the policy, or in connection with an incident that results in a claim covered under the policy. **Provided that:** i. The insured's entitlement to this cover is conditional upon the insured providing us with full written details of the incident no later than 30 days after the insured first becomes aware of the incident; ii. The incident must occur and be reported during the insurance period; iii. The incident must occur in New Zealand; and iv. The maximum amount payable under this Insuring Clause is the sub-limit specified in the schedule during the insurance period which is part of and not in addition to the indemnity limit. A separate deductible will apply under this Automatic Coverage Clause, as specified in the schedule. b. in connection with a claim that is covered under this policy for extradition of such insured; or c. to mitigate any adverse effect on such insured's reputation by disseminating findings which exonerate the insured person from fault, liability or culpability in connection with a claim that is covered under this policy, provided such findings are made by a court with jurisdiction to finally dispose of such claim (including the outcome of any appeal in relation to such claim). Our liability under this Automatic Coverage Clause shall only apply to that part of each crisis loss which is in excess of the deductible specified in the schedule. The total amount payable by us under this Insuring Clause in respect of all insureds for all public relations expenses shall not exceed the sub-limit specified in the schedule. This sub-limit forms part of the indemnity limit, and is not payable in addition to that indemnity limit. ### 2.26 Retirement Cover If the company does not renew this policy or replace it with any other insurance providing Management Liability coverage, and a discovery period is not purchased by the insured under Automatic Coverage Clause 2.6 (Discovery Period) of this policy, then any insured person will be automatically entitled to an 84 month discovery period at no additional premium after the expiry of the insurance period provided that the insured person retired from all employment or office prior to the expiry of the insurance period. ### 2.27 Software Reconstitution Costs We agree to pay on behalf of the company any reasonable and necessary costs incurred, with our prior consent, for re-writing or correcting or amending the company's software programmes which have been damaged or modified in consequence of a dishonest act covered by this policy. For the avoidance of doubt this Automatic Coverage Clause does not provide indemnity in respect of the costs of rectifying or amending errors or deficiencies in such software programmes that existed prior to the acts giving rise to the loss. The maximum amount payable under this Automatic Coverage Clause is the sub-limit specified in the schedule during the insurance period which is part of and not in addition to the indemnity limit. ### 2.28 Spousal Liability Cover We agree to pay on behalf of the insured all loss arising out of any claim against an insured person's legal or de facto spouse, domestic partner or companion in respect of loss arising from a wrongful act, employment practice breach or trustee breach committed by an insured person that is covered under this policy. It is a condition of this Automatic Coverage Clause that any legal or de facto spouse, domestic partner or companion will observe and be subject to all applicable provisions of this policy. --- ## Section 3: Exclusions ### Exclusions Applying to all Insuring Clauses We will not cover the insured for, or in connection with: ### 3.1 Bodily Injury / Property Damage Any claim for bodily injury, sickness, mental anguish or emotional distress or disturbance, disease or death of any person howsoever caused or damage to or destruction of any tangible property, including loss of use thereof. However, this exclusion shall not apply to any claim in respect of mental anguish or emotional distress or disturbance alleging an employment practice breach. ### 3.2 Breach of Professional Duty Any claim or incident based upon, attributable to, or in consequence of any breach of professional duty or any claim or incident based upon, directly or indirectly attributable to or in consequence of the provision of any professional services and/or advice, or the failure to provide such services or advice. This exclusion does not apply to wrongful acts by any insured person in their capacity as an insured person other than in the provision of professional services to a third party. This Exclusion does not apply to the extent that cover may be provided under Insuring Clauses 1.1 (c) (Trustee Breach) or 1.2 (e) (Trustee). ### 3.3 Defamation, Breach of Privacy and Intellectual Property Any claim or incident arising from or attributable to libel, slander or defamation of character, injurious or malicious falsehood, invasion of privacy, breach of confidence or confidentiality, unlawful interference with a contract, intimidation, interference with trade by unlawful means, conspiracy to cause damage whether by lawful or unlawful means, infringement of copyright or design right whether registered or unregistered, infringement of patent, infringement of trademark, passing-off or any other infringement of intellectual property right or plagiarism or groundless threats of infringement proceedings. ### 3.4 Insolvency Any claim or incident arising from or in any way connected with the insolvency, liquidation, bankruptcy, receivership or administration of the company or any subsidiary or any outside entity or its actual or alleged inability to meet any or all of its debts as and when they fall due. ### 3.5 Insured v Insured Any claim which is brought by or on behalf of the company or any outside entity provided, however, that this exclusion shall not apply to: a. any claim brought or maintained by the company for contribution or indemnity, if the claim directly results from another claim otherwise covered under the policy; b. any claim brought or maintained on behalf of the company or any outside entity by any external administrator to the company or any outside entity (including but not limited to a liquidator, receiver, administrator or other external administrator) where such external administrator is appointed by a Court and such claim is brought without the solicitation, assistance or co-operation of any insured person or director, officer, trustee, governor or equivalent position in any outside entity, except when such solicitation, assistance or cooperation is required by law; c. any shareholder derivative action brought or maintained on behalf of the company or any outside entity without the solicitation, assistance or co-operation of an insured person or director, officer, trustee, governor or equivalent position in any outside entity, except when such solicitation, assistance or cooperation is required by law; or d. any claim instigated by any regulatory authority on behalf of the company or any outside entity without the solicitation, assistance or co-operation of an insured person or director, officer, trustee, governor or equivalent position in any outside entity, except when such solicitation, assistance or co-operation is required by law. ### 3.6 Major Shareholder Any claim brought by any shareholder owning, directly or indirectly, at least 15% of the voting share capital of the company or any of its subsidiaries or any associated company and/or by any shareholder that has or had any Board representation on the company or any of its subsidiaries or any associated company. ### 3.7 Pollution Any claim or incident arising from or in any way connected with: a. the actual, alleged or threatened discharge, dispersal, release, seepage or escape of pollutants into or upon land, building or other property, the atmosphere or any water course or body of water, whether such discharge, dispersal, release, seepage or escape is intentional or accidental; or b. any direction or request to test for, monitor, clean up, remove, contain, treat, detoxify or neutralise pollutants. This Exclusion shall not apply to claims made by a shareholder of the company either directly or derivatively alleging damage to the company or its shareholders, but subject always to Exclusion 3.6 (Major Shareholder). ### 3.8 Prospectus Liability Any claim made against any insured arising out of or in any way connected with: a. any disclosure document which contains an offer for the issue, sale, purchase or transfer of securities; or b. the making of any written or verbal representations in connection with a disclosure document or any offer referred to in (a). For the purposes of raising or restructuring capital for the company or any outside entity, this exclusion shall not apply to private placements. ### 3.9 Superannuation Liabilities Any claim: a. arising out of or in any way connected with the failure of the company to pay into, or collect contributions for, a fund as required by law and/or a fund trust deed; or b. for or in respect of benefits. ### 3.10 Wilful Conduct Any claim or incident arising from or in any way connected with any insured: a. gaining any personal profit or advantage to which the insured was not legally entitled; b. having improperly benefited from any securities transaction as a result of information that is/was not available to other sellers or purchasers of such securities; or c. committing any wilful violation or wilful breach of any Act of Parliament. For the purpose of determining the applicability of this exclusion, the conduct and knowledge of any insured shall not be imputed to any other insured. This exclusion shall only apply if it is established through a judgment or any other final adjudication adverse to the insured, or any admission by an insured, that the relevant conduct did in fact occur. ### Exclusions Applying only to Insuring Clause 1.2 (a) (Crime) In addition to Exclusions 3.1 to 3.10 above, the following Exclusions apply with respect to Insuring Clause 1.2 (a) (Crime) and any relevant Automatic Coverage Clause. ### 3.11 We will not cover the company in connection with any: #### Consequential Loss a. Indirect or consequential loss of any nature, including but not limited to any loss of income, profits, or dividends not realised by the insured or any other individual or organisation, business interruption costs or denial of service including but not limited to computer time, access or use, wear and/or tear, gradual deterioration or damage from moth or vermin or mechanical or electronic equipment damage, breakdown or failure or other property damage. #### Credit Risks b. Loss resulting from any of the following acts or omissions by third parties not acting in collusion with an associated person: i. default under a credit arrangement; and/or ii. fraudulent alteration or forgery of documents in connection with a credit arrangement. #### Dual Controls c. Loss connected with the issuing and drawing of cheques, account withdrawals or funds transfers sustained by the company by reason of the absence of or failure to have a clear segregation of duties and procedures in connection with the issuing and drawing of cheques, account withdrawals or fund transfers in excess of $1,000 in value. Such cheques, account transactions or fund transfers must be counter signed or authorised by another authorised officer who must, independently of the employee drawing the cheque, making account withdrawals or fund transfers, examine the supporting vouchers or requisitions or verify against an authorised payment list prepared and checked independently of the drawer of the cheque, or person making the account withdrawals or fund transfers. #### Fees, Costs or Expenses d. Fees, costs or expenses incurred by the company in establishing the existence or amount of any loss covered by this policy or in prosecuting or defending any legal proceeding or for any recall costs or costs associated with a recall. e. Loss caused by fire except as expressly provided in Automatic Coverage Clause 2.22 (Physical Loss or Destruction of or Damage to Money or Securities). #### Intellectual Property and Confidential Information f. Loss that is in any way connected with infringement or plagiarism of any copyright, trademark, registered design or patent, breach of any intellectual property right or breach of confidence, or any allegation of such conduct. #### Inventory Computation Losses g. Loss of which there is no proof or supporting documentation to prove a covered loss other than an inventory or profit and loss computation provided that where the company has proven to our satisfaction that an identifiable associated person has caused the loss, an inventory or profit and loss computation may be submitted as partial evidence in support of proof of a covered loss as required by Condition 4.9 (Notification of Direct Financial Loss). #### Liabilities to Third Parties h. Fines, penalties and liabilities to any persons other than as expressly provided for in the definition of direct financial loss or Automatic Coverage Clause 2.3 (Contractual Penalties). #### Loss Sustained After Knowledge i. Loss sustained after the discovery of any part of that loss. #### Non-Violent Crime j. Loss in respect of other property in the premises unless resulting from theft or attempted theft by a third party following the third party's entry to or exit from the premises by violent or forcible means or resulting from the dishonest acts of an associated person. #### Premises Damage k. Loss in respect of damage or destruction to any of the premises, howsoever caused. #### Prior or Subsequent Discovery of Loss l. Loss discovered before the commencement of this policy or loss discovered after the expiry date of this policy regardless of the time at which the act or acts giving rise to the loss occurred. #### Reckless Conduct m. Loss resulting from recklessness by the company. #### Securities n. Loss resulting from any dealing or trading in securities, futures or foreign currencies or funds. #### Voluntary Exchange or Purchase o. Loss arising out of the voluntary giving or surrendering (whether or not such giving and surrendering is induced by deception) of money, securities or other property in any exchange or purchase unless such loss is committed by an associated person acting alone or in collusion with others and is covered under Insuring Clauses 1.2 (a) (Crime). #### Theft or Fraud by Directors and Officers p. Loss arising out of or in any way connected with any fraudulent or dishonest activities, or involving collusion by or complicity, of: i. a director who at the time of the dishonest act owns or controls more than 5% of the issued share capital of the company; or ii. any shareholder who, at the time of committing such acts, had direct or indirect ownership of or control over more than 5% of the voting share capital of the company or any of its subsidiaries or any associated company. ### 3.12 We will not cover the company for or in connection with direct financial loss: i. first discovered prior to the commencement of the insurance period; or ii. first discovered after the end of the insurance period, or the discovery period if applicable; or iii. in any way connected with any employee or third party up to a period of 30 days from the time any director or officer (who is not in collusion with such employee or third party) had actual knowledge that the employee or third party had committed or was suspected of having committed any fraudulent or dishonest act, even if it does not constitute a dishonest act as defined; or iv. caused by any employee if a director or officer possessed at any time knowledge of any act or acts of theft, fraud or dishonesty committed by such employee prior to employment by the company provided the act(s) involved money, securities or property valued at $10,000 or more or failed to make reasonable enquiries prior to employment of such employee; or v. arising out of or in any way connected with any fraudulent or dishonest activities, or involving collusion by or complicity, of any shareholder who, at the time of committing such acts, had direct or indirect ownership of or control over more than 5% of the voting share capital of the company or any of its subsidiaries or any associated company. ### Exclusions Applying Only To Insuring Clause 1.2 (c) (Entity) In addition to Exclusions 3.1 to 3.12 above, the following Exclusions apply with respect to Insuring Clause 1.2 (c) (Entity) and any relevant Automatic Coverage Clause. ### 3.13 We will not cover the company in connection with any claim made against it for or in connection with: a. breaches of intellectual property rights, including but not limited to any actual or alleged plagiarism, misappropriation, infringement or violation of copyright, patent, trademark or trade secret; b. any actual or alleged breach of any law, whether statutory, regulatory or common law, relating to anti-trust, business competition, price fixing, unfair or restrictive trade practices, or tortious interference in any other party's business or contractual relationships; c. any actual or alleged contractual liability of the company under any express or implied contract or agreement. However, this exclusion shall not apply to a claim for an employment practice breach to the extent the company would have had such liability in the absence of such contract or agreement; d. fines or penalties or non-monetary relief; e. any obligation, or breach of an obligation, under any law or regulation providing for paid or unpaid leave of any kind or any industrial instrument; or f. any obligation pursuant to any law, regulation, or industrial instrument in respect of workers' compensation, occupational or workplace health and safety, disability benefits, unemployment benefits or compensation, unemployment insurance, retirement benefits, social security benefits or any similar law, regulation or industrial instrument whatsoever. ### Exclusions Applying Only To Insuring Clause 1.2 (f) (Taxation Investigation) In addition to Exclusions 3.1 to 3.13 above, the following exclusions apply with respect to Insuring Clause 1.2 (f) (Taxation Investigation) and any relevant Automatic Coverage Clause. ### 3.14 We will not cover the company for or in respect of any tax audit costs in connection with: a. Any improper, unwarranted or unjustified delay, refusal or failure to comply with any request made by or on behalf of the Inland Revenue Department, for the production of documents or the provision of information by the company. b. Inquiries from the Inland Revenue Department which are not related to an identified intention to conduct an audit or likely future audit. c. Any audit or investigation concerning income earned or where the source of income is outside New Zealand and its external territories or protectorates, or where the services giving rise to the audit are performed by persons or any corporate entity outside of New Zealand and its external territories or protectors. d. Matters arising under customs legislation. e. Any audit or investigation, where notice or information as to their likely conduct was received by the company prior to the insurance period. Receipt of such communication will have occurred when the Inland Revenue Department makes communication with the company or any other person acting on its behalf. f. Any fraudulent act, error, omission or misrepresentation committed by or on behalf of the company. g. The imposition of, or seeking to impose, any tax, penalty tax, costs, interest, fine or any fees or expenses in connection with any criminal prosecution. h. An audit or investigation of a return of income that has not been prepared or reviewed by the accountant or registered tax agent, except where the return is a prescribed sales tax return or a prescribed payroll tax return. i. Tax audit costs incurred after the audit or investigation has been completed. --- ## Section 4: Conditions ### 4.1 Allocation a. Where a claim involves matters and/or parties which give rise to loss covered by this policy and matters and/or parties which do not, we will use our best efforts to agree with you a fair and proper allocation of the proportion covered under this policy, having regard to the relative legal and financial exposures attributable to covered and uncovered matters and/or parties. Only loss incurred by you or the company (if applicable), and in the case of defence costs those which are directly attributable to (where applicable) both your and the company's defence of such claim, is covered, subject always to the terms and conditions of this policy. b. If an allocation cannot be agreed it shall be determined by a Queen's Counsel to be mutually agreed upon or, in default of agreement, to be nominated by the then President of the New Zealand Bar Association. Such determination will be based upon written submissions only and will be final and binding. The Queen's Counsel shall make the determination based on the relative legal and financial exposures attributable to covered and uncovered matters and/or parties. Pending that determination we may at our sole discretion meet the loss on an interim basis. After the allocation has been determined, you or the company (whichever is appropriate) or both you and the company will refund to us any amount which we have paid that exceeds the entitlement under this policy. The costs of any reference to a Queen's Counsel under this Condition shall be borne by us. c. If the deductible applicable to Insuring Clause 1.1 (Cover for You) applies to part of a loss and the deductible applicable to Insuring Clause 1.2 (Cover for the Company) applies to part, then we and the insured must use best efforts to reach an agreement of a fair allocation of such loss between Insuring Clause 1.1 (Cover for You) and Insuring Clause 1.2 (Cover for the Company). If no agreement can be reached, the dispute will be referred to Queen's Counsel using the mechanism in (b) above for determination of the issue. ### 4.2 Alteration to Risk a. In addition to General Condition 6.16 (Alteration to Risk), in this policy only: i. If during the insurance period a transaction takes place, the cover provided under this policy is amended to apply only to wrongful acts, employment practice breaches and trustee breaches committed prior to the effective date of the transaction. ii. The insured shall give us written notice of the transaction as soon as practicable but not later than 30 days after the effective date of the transaction. iii. If, during the insurance period, the company decides to make a public offering of its securities in any jurisdiction then as soon as the information is publicly available, the company shall provide us with any prospectus or offering statement for our evaluation and assessment of the increased exposure of the insured, and we shall be entitled to amend the terms and conditions of this policy and/or charge a reasonable additional premium reflecting the increase in exposure. iv. At the company's request, prior to the public announcement of such securities offering, we shall evaluate and assess the increased exposure and advise of all necessary amendments to the terms and conditions of this policy and additional premium. In this event and at the request of the company, we will enter into a confidentiality agreement with the company relating to any information provided regarding the proposed securities offering. ### 4.3 Basis of Valuation a. **Securities and Foreign Currency** We shall not be liable for more than the actual market value of securities or foreign currency determined by their closing market price or value on the day that the loss was discovered or the actual cost of its replacement, whichever is the lesser value. b. **Precious Metals** We shall not be liable for more than the actual market value of precious metals determined by their mid-spot rate on the last business day prior to the day the loss was discovered or in the event of the discovery of the loss after the close of the market, by their mid-spot rate on the day the loss was discovered. c. **Other property** The lesser of the actual value of other property or the actual cost of repairing other property or replacing same with property or material of like quality and value. We may, at our election, pay such actual cash value or make such repair or replacement. We may, with the insured's consent, settle any claim by the insured in respect of loss of property, with the owner of that property. Any property for which we have indemnified the insured becomes our property. ### 4.4 Change of Control of Insured If during the insurance period there is a change of control this policy shall terminate at 4.00pm on the date on which a change of control takes effect and the benefits of this policy shall cease absolutely at that time, subject only to paragraph (b) below. In the event of a change of control: a. the insured shall forthwith give notice of such to us; b. no claim will be payable under this policy unless it is in respect of loss covered by this policy resulting from acts which occurred exclusively before the date on which the change of control takes effect and which was first discovered within 30 days of that date; and c. We shall be entitled to a pro-rata proportion of the premium (subject to any adjustment required by the terms of this policy) for the time during which the policy has been in force. ### 4.5 Claim Notifications In addition to General Condition 6.19 (Claims Notification), upon the insured discovering a loss or potential loss covered by Insuring Clause 1.2 (a) (Crime) the insured must: a. take immediate steps to ascertain the full extent of any loss; b. inform us of any further losses as they are discovered; c. as soon as practicable but in any event no later than 30 calendar days thereafter, submit full particulars of the loss in writing to us; d. provide us with any reasonably required proof and information in respect of the loss; and e. allow us or our nominee to inspect the insured's accounting records and any accountant's report on those records providing the inspection is reasonably connected with the loss. ### 4.6 Deductible Unless otherwise stated, the deductible will apply to each and every loss net of any amounts recovered from any person. ### 4.7 Indemnity Limit Subject to Automatic Coverage Clause 2.1 (Automatic Reinstatement for Insured Persons), our total liability under the policy in respect of any single claim and in the aggregate from all claims shall not exceed the indemnity limit. We may at any time pay the indemnity limit applying to any one claim or series of claims (after deduction of sums already paid) or any lesser amount for which such claims can be settled and will then have no further liability in connection with such claims. ### 4.8 Jurisdictional Limit The insurance provided by this policy shall apply only to dishonest acts committed within the Jurisdictional Limit specified in the schedule unless otherwise stated. ### 4.9 Notification of Direct Financial Loss The insured must give written notice to us of any direct financial loss as soon as practicable within the insurance period or within the discovery period if applicable, but in any event no later than 60 days after any direct financial loss is first discovered. The insured must, at its own cost, also: a. Provide us with affirmative proof of the direct financial loss with full particulars within 6 months of the direct financial loss being first discovered; and b. Provide us with all requested information and documents and co-operate with us in all matters pertaining to the direct financial loss. ### 4.10 Preservation of Right to Indemnity In the event and to the extent that the company is legally permitted or required to indemnify an insured person in respect of a claim, but for whatever reason fails or refuses to do so, then we shall pay on behalf of the insured person any loss arising from the claim. In such event, the deductible applicable to the Insuring Clause 1.2 (b) (D&O / Company Reimbursement) shall be paid by the company to us. However, the amount of the deductible will not be payable by the company if the company is unable to pay the amount of the deductible due to insolvency. ### 4.11 Prior Enquiries The insured must make all reasonable enquiries and take all reasonable steps to satisfy itself about the honesty and good character of each employee before offering him/her employment, including but not limited to checking with all referees and recent relevant employers. ### 4.12 Prosecution for Dishonest Acts The insured, when required by us, and at our expense, must use all diligence in prosecuting or assisting to prosecute any person in respect of whom a loss arising from a dishonest act is paid under this policy. ### 4.13 Recoveries Where any amount is recovered from any person in respect of a loss, whether or not the indemnity limit has been or may be exhausted, that amount will be distributed (after deducting the costs and expenses of the recovery) in the following order of priority: a. First, to the insured in respect the deductible; b. Secondly to us in respect of any and all amounts paid or payable by us under this policy; c. Thereafter to the insured in respect of any part of loss which is uninsured for whatever reason. ### 4.14 Severability and Non-Imputation No state of mind or knowledge possessed by any one insured person will be imputed to any other insured person for the purpose of determining whether any provision in this policy applies. However, any state of mind or knowledge possessed by any past or present chairman of the board, chief executive officer, director, chief operating officer or chief financial officer of the company will be imputed to the company. ### 4.15 Single Policy / Single Loss a. If the insured comprises more than one person, this policy shall nevertheless be and remain a single contract of insurance for the benefit of the insureds as joint-insureds except as provided in General Condition 6.28 (Fraudulent Claim). b. Where loss results from a series of related, continuous or repeated dishonest acts of an employee or a third party the loss shall be treated as one loss and in particular all loss as a result of the dishonest acts of any one employee or third party acting alone or in collusion with others will be treated as one loss regardless of the means by which the loss was caused. --- ## Section 5: Definitions For the purposes of this policy only: ### 5.1 Accountant or registered tax agent means a person who is engaged by the company who is not an insured and is recognised by Chartered Accountants Australia New Zealand (formerly the Institute of Chartered Accountants) or similar, or any other person registered by the Inland Revenue Department as a tax agent. ### 5.2 Act of Parliament means any Act of the New Zealand Parliament, including any amendment to or re-enactment, and any code, rules, regulations, bylaws or other subordinate legislation made under such Act. ### 5.3 Associated company means any company in which the company or any subsidiary owns on or before the inception of the insurance period at least 25% of the issued and outstanding voting shares. ### 5.4 Associated person means any natural person, other than a director or partner, who has entered into or works under a contact of service with the company and whom the company compensates by salary, wages and/or commissions and whom the company has the right to govern and direct in the performance of such service. It includes any: a. director or trustee of the company but only in respect of dishonest acts performed while acting within the scope of the usual duties of an employee of the insured; b. part-time or temporary employee performing the duties of an employee under the company's supervision; c. retired employee appointed by the company under a written contract whom the company governs and directs in the performance of their service as an employee; d. student, secondee or volunteer pursuing studies, gaining work experience or performing the duties of an employee under the company's supervision; e. ex-employee of the company, for a period not exceeding 90 days following the formal termination of their employment with the insured (other than where such termination is as a result of a dishonest act); or f. person provided to the insured by an employment agency (or similar source) to perform the duties of an employee under the insured's supervision. g. employees of any company or firm authorised and retained by the company to perform normal administrative services which the company outsources to such company or firm provided that: i. such services are provided under a written contract; ii. the company has the right to audit the performance of such services; iii. the company can demonstrate that the outsourced company or firm has been checked for competency, financial stability and honesty prior to the retention of such company or firm; and iv. any indemnity provided is in excess of any valid and collectible indemnity, contractual or otherwise, available to the company or firm or to the insured or which would be valid and collectible except for the application of an excess or the exhaustion of a policy limit. Associated person does not include any person who is or acts on behalf of any external auditor, external accountant, broker, investment adviser or investment manager, consignee, contractor or other similar agent or representative unless specifically agreed by us and endorsed to this policy. ### 5.5 Benefits means any amount payable including pensions, welfare, shares or share options, charity, shares or share options for past, present or future employees (not including directors, partners or trustees) to a beneficiary of a fund by the trustee under the rules governing the fund. ### 5.6 Business means the business of the insured specified in the schedule. ### 5.7 Change of control means the effective consolidation, amalgamation, merger, transfer, assignment, pledge or sale of a majority of the assets or shareholding of the company with or to any other entity which was not an insured at the commencement of this policy or became an insured during the insurance period. ### 5.8 Claim means: a. any formal administrative or regulatory proceeding against the insured, including any arbitration, mediation, conciliation or alternative dispute resolution proceeding, alleging an employment practices breach, trustee breach, wrongful act, or dishonest act, b. any civil proceeding brought by a third party against the insured for recovery of compensation or damages; c. any written or verbal demand by a third party upon the insured for monetary relief. d. any circumstance that the insured becomes aware of, and the insured or a reasonable insured should consider may give rise to any of (a), (b) or (c) above. All claims which arise out of or are attributable to or are in any way connected with a single wrongful act, employment practice breach, trustee breach or dishonest act shall constitute a single claim for the purposes of this policy. A single wrongful act, employment practice breach, trustee breach or dishonest act means all respective wrongful acts, employment practice breaches, trustee breaches or dishonest acts which are related or form part of a series of related conduct or form part of a course of conduct that is not entirely unconnected, different and/or unrelated. ### 5.9 Company means: a. the entity or entities specified in the schedule; and b. any subsidiary or associated company in existence at the commencement of the insurance period. ### 5.10 Credit arrangement means any credit agreement, extension of credit or hire purchase agreement, loan or transaction in the nature of a loan, lease or rental agreement, invoice, account or otherwise evidence of debt, payments made or withdrawals from any customer's account involving items which are not finally paid for any reason. ### 5.11 Crisis event means any of the following unforeseen events where, in the reasonable opinion of the chief executive officer (or equivalent) of the company, the event has the potential to cause an imminent decrease of greater than 30% of the total consolidated annual revenues of the company if left unmanaged: a. the sudden, unexpected death or disability of any executive; b. loss of a major customer, contract or credit facility; c. employee workplace violence; d. the first apparent unauthorised intrusion into any of the company's computer facilities; e. a recall or boycott of any product; f. a man-made disaster; or g. any criminal or fraud investigation. Crisis event does not include an event that affects a company's industry in general, rather than a company, specifically. ### 5.12 Crisis loss means the reasonable and necessary fees, costs and expenses paid by the company for external crisis management services provided in response to a crisis event within the first thirty (30) days after the event. ### 5.13 Deductible means the amounts specified in the schedule. ### 5.14 Defence costs means reasonable costs, charges, fees (including but not limited to legal counsel's fees) and expenses reasonably incurred by the insured, as applicable, with our prior written consent in investigating, defending or settling a claim. It does not include regular or overtime wages, salaries or fees of the directors, officers or employees of the insured incurred in attending, defending, investigating or monitoring claims, any internal or overhead expenses of the insured or the cost of the insured's time or any loss of earnings or profit. In respect of Automatic Coverage Clause 2.18 (b) (Official Investigations and Inquiries – Cover for Company) and Automatic Coverage Clause 2.24 (Positive Defence Costs For Claims) defence costs means the reasonable costs of the insured's legal representation reasonably required for the attendance at any official investigation, examination or inquiry. ### 5.15 Direct Financial Loss means direct financial loss to the company directly caused by the loss of money, securities or other property owned by the company or in the care, custody or control of the company at the time of that loss and for which the company is legally liable. Direct financial loss does not include wages, salaries or other remuneration or benefits paid by the company to its directors, officers and employees or any amount excluded by the exclusions applicable to Insuring Clause 1.2 (a) (Crime). ### 5.16 Disclosure document means any prospectus, information memorandum, registration statement or similar document regardless of whether or not it has been, or is required to be, filed or registered with the New Zealand Registrar of Financial Services Providers or any other similar authority in any other jurisdiction. ### 5.17 Discovery and discovered means the time at which any management personnel (excluding a person whose dishonest acts have resulted in loss) first becomes aware of facts which would cause a reasonable person to believe that a loss had or was likely to have been sustained as a result of a dishonest act whether or not the amount of such loss or the means by which the loss was or may have been caused are known. Discovery by one management personnel constitutes discovery on behalf of each and every insured. ### 5.18 Discovery period means: the period of time specified in Automatic Coverage Clause 2.6 during which time written notice may be given to us of any: a. claim which is first made against the insured for a wrongful act committed or allegedly committed; or b. direct financial loss which is first discovered and results from dishonest acts committed; prior to the end of the insurance period. The discovery period is not available where Condition 4.4 (Change of Control of Insured) applies. ### 5.19 Dishonest act means any act of dishonesty including but not limited to theft, criminal damage, forgery, counterfeiting, fraudulent creation, fraudulent alteration, electronic fraud and incoming cheque forgery. Dishonest act also includes the fraudulent use of any credit, debit or charge card issued to the insured or any associated person for business purposes. ### 5.20 Electronic fraud means: a. Theft where the property in question is subject to the direct or indirect control of a computer system caused by manipulation of computer hardware or software programmes or systems; or b. money taken from an account maintained by the insured at a financial institution (from which the insured or a person or organisation authorised by the insured may request the transfer, payment or delivery of funds) following fraudulent electronic, telegraphic, tested facsimile, tested telex, telephone or written instructions to debit such account and to transfer, pay or deliver funds from such account and which instructions purport to come from the insured or a person or organisation authorised by the insured to issue such instructions. ### 5.21 Employee means any person who is a past, present or prospective employee of the insured under a contract of service or apprenticeship on a full-time, part-time or casual basis. Employee does not include consultants, independent contractors, secondees to or agents of the company or their respective employees (including the employees of labour-hire agencies). ### 5.22 Employee plan means any plan, foundation or body established and maintained by the insured to provide benefits. Employee plan does not include any sports or social club or organisation. ### 5.23 Employment practice breach means any wrongful act in relation to any of the following: employment-related actual, or alleged, unfair or wrongful dismissal from, termination or discharge of employment (either actual or constructive, including breach of an implied contract), misrepresentation, wrongful failure to employ or promote, failure to grant tenure, discrimination, harassment, retaliation (including lockouts), humiliation, defamation, invasion of privacy, wrongful deprivation of career opportunity, wrongful demotion or negligent employee evaluation (including the provision of negative or defamatory statements in connection with an employee reference) which relate solely to the company and its past, present or prospective employees. ### 5.24 Employment-related benefits includes but is not limited to: a. non-monetary benefits including but not limited to the allocation of a company car, travel allowance, mobile or landline telephone, medical or life insurance expenses, education and training allowances, and equipment allowances; b. stock, shares, stock options, share options or any entitlement or right under any employee plan; c. participation in any stock, share option or share option plan, or participation in any employee plan; d. severance or redundancy payments or entitlements; e. any benefit, payment or entitlement of any kind in respect of paid or unpaid leave; f. bonus or incentive payments, or any entitlement or right under a bonus or incentive plan (which, for the avoidance of doubt, does not include any payments, entitlement or right under any commission scheme); g. payments or contributions in respect of any provident, benefit, superannuation, pension or retirement fund, or any other account, fund, scheme or plan intended to provide benefits, in whole or in part, at retirement or a particular age, or on the happening of a particular event; or h. any amount the company pays or is ordered to pay pursuant to any determination or settlement in respect of an allegedly unfair contract, notwithstanding that it acted in accordance with the terms of the employment contract. ### 5.25 Extortion means any threat made to any director, partner, trustee, officer or employee of the company to make any accusation against any person, to disclose something about any person or to cause serious damage to property or endanger the safety of any person with intent: a. to cause the person who is the victim of the threat is made to act in accordance with the will of the person making the threat; and b. to obtain any financial benefit or to cause loss to any other person. For the avoidance of doubt extortion includes ransom demands in relation to the kidnapping or abduction of a person. ### 5.26 Forgery means the handwritten signing or endorsing of the name of a genuine person without authority and with intention to deceive. It does not include the signing in whole or in part of one's own name, with or without authority, in any capacity, for any purpose. Mechanically or electronically produced or reproduced signatures are to be treated in the same manner as hand-written signatures. ### 5.27 Fraudulent alteration means a material alteration for a fraudulent purpose by any person. ### 5.28 Fund means any single employer superannuation fund established for the benefit of employees. Fund does not include any industry or master superannuation funds. ### 5.29 Incident means a matter in which the insured's reputation and skill in the conduct of the business is brought into question. ### 5.30 Incoming cheque forgery means the fraudulent alteration of, on or in any cheque or draft drawn on any bank or by any company upon itself or any cheque or written order or direction to pay a verifiable sum representing money drawn by any entity itself, or any warrant drawn by any entity which the insured receives at the premises in payment or purported payment for tangible property sold and delivered or for services rendered. ### 5.31 Indemnity limit means the amount specified in the schedule. ### 5.32 Industrial instrument means: a. an award, collective or individual agreement, minimum wage order or any other instrument made or authorised under statute; or b. any other collective agreement; which regulates the terms and conditions of employment. ### 5.33 Insurance period means the period specified in the schedule. ### 5.34 Insured means each insured person, the company or both. ### 5.35 Insured person means: a. any past, present or future director, secretary, officer, employee of the company, or b. any trustee, or c. any natural person who by virtue of any applicable legislation or law is deemed to be a director or officer of the company. Insured person does not include: a. a receiver, receiver and manager, official manager, liquidator, administrator, trustee or other person administering a compromise or scheme of arrangement made between the company and any other person or persons; or b. any company, organisation or other body corporate. ### 5.36 Internet error means any unintentional: a. infringement or unauthorised use of intellectual property rights which includes but is not limited to breach of copyright, trademark, registered design or patent or plagiarism; or b. unintentional defamation; c. unauthorised use of names (including domain names), trade names, trade address, service marks, service names, titles, slogans, formats, characters, character names, characterisations, plots, musical compositions, performances, logos, artwork, graphics, photographs or program materials; or d