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        Article1. The InsuranceContract incorporates the Insurance Clauses, Proposal, Policy, Endorsements (ifany). Any agreement related to the Insurance Contract shall be in written form.






        Article 2 The property andcosts which are related to the construction contract and situated in thespecified worksite, are insured hereby, provided being itemized and listed inthe Policy.


        Article 3 The following property or costs shall not be insuredby this Policy, unless otherwise specifically agreed between the Insurer andthe Insured and with sum insured stated in this Policy:


        3.1 Construction plants, machinery and equipments;


        3.2 The property belonging to the Insured whichexists or is formed within or in the vicinity of the worksite before thecommencement of the contract works insured;


        3.3 The property or any part of it which has beenput into commercial use or taken over or actually occupied by the Employer orthe property or any part of it for which a certificate of completion has beenissued or which has been accepted by the representative of the Employer afterthe Contractor formally proposes works acceptance before the expiry date ofthis Policy;


        3.4 Debris removal costs, which means necessary andreasonable costs and/or expenses incurred by the Insured to remove and disposeof debris at the worksite for the purpose of repairing the insured propertyafter an event giving rise to identifiable loss or damage under this Section.


        Article 4 Thefollowing items and articles are not insured by this Policy:


        4.1 Documents, books, drawings, technical data,computer software, computer data, and other property of which the value couldnot be appraised;


        4.2 Portable communication devices, portablecomputer devices, portable photographic camera equipment and other portabledevices or equipment;


        4.3 Land, seabed, mineral, water, animals, plants, treesand growing crops;

        4.4 Vehicles, ships oraircraft licensed for general transport use or covered by other insurance;


        4.5 Illegal or dangerous buildings or structures,or illegally occupied property.




        Article 5 Subject to the terms, exclusions, conditions andprovisions contained in the Policy or endorsed thereon, the Insurer shallindemnify the Insured for the physical loss of or damage to the property insured(physical loss or damage being hereinafter termed Damage) during the period ofinsurance within the specified worksite arising from any Natural Hazard orAccident other than those specifically excluded in this Policy.


        Article 6 Subject to the terms, exclusions, conditions andprovisions contained in the Policy or endorsed thereon, theInsurer shall also indemnify the Insured for the following costs and/orexpenses incurred in consequence of the Damage caused by event insured by thisPolicy as stated in Article 5 during the period of insurance:


        6.1 costs and/or expenses necessarily andreasonably incurred by the Insured for preventing or mitigating the Damage of subjectmatter insured after an event insured hereby;


        6.2 other related costs and/or expenses specifiedin this Policy in respect of the above-mentioned loss or damage.




        Article 7 The Insurershall not be liable for:

        7.1 loss of or damage to property insured and/orany part thereof or any costs and/or expenses resulting from faulty design;

        7.2 loss of or damage to property insured itselfand/or any costs and/or expenses resulting from wear and tear, inherent or latentdefect, change in substance, spontaneous combustion, natural heating,oxidation, rust and corrosion, leakage, mice, insects or vermin, change inatmosphere (climatic or temperature) conditions, change in normal water levelor any other progressively operating cause;

        7.3 loss of or damage to the property insureditself due to defective material or bad workmanship and expenses incurred toreplace, repair or rectify such fault, defect, error, or omission;

        7.4 loss of or damage to the mechanical orelectrical devices insured themselves unless due to external forces; loss of ordamage to the construction plants machinery and equipments or mechanical devicesthemselves due to breakdown or derangement thereof.

        Article 8 The Insurer shall not be liable for:

        8.1 costs and/or expenses incurred for normalmaintenance or overhaul;

        8.2 loss of or damage to files, documents, accountbooks, bills, cash, securities, drawings, data and packing materials;

        8.3 shortage discovered at the time of taking aninventory;

        8.4 loss of or damage to vehicles, ships oraircraft licensed for general transport use or having been covered by any otherinsurance;

        8.5 unless otherwise agreed, loss of or damage tothe property belonging to the Insured which exists or is formed within or inthe vicinity of the worksite before the commencement of the contract works;

        8.6 unless otherwise agreed, loss of or damage tothe property insured or any part thereof for which a certificate of completionhas been issued or which have been tested and accepted or actually occupied orput into service or taken over by the Employer before the expiry date of thisPolicy.




        Article 9

        9.1 The sum insured of this Policy shall not be less than:

        9.1.1 For contract works -- the full value exposedat the completion of the contract works including costs and/ expenses ofmaterials, equipments, construction and erection, freight and premium, customsduty, any other taxes and expenses, including any free issue material andequipments which are to be incorporated therein.

        9.1.2 For other Items Insured -- the sums agreedupon between the Insured and the Insurer.

        9.2 If the sum insured isbased on the estimated value stated in the construction contract, the Applicantand/or Insured shall:

        9.2.1 notify the Insurer in writing as soon aspractical if the contract value including all costs and  expenses under this Policy exceeds theoriginal insured contract value due to rise in price or appreciation, and the Insurershall then adjust the sum insured accordingly;

        9.2.2 keep a precise record in writing on the particulars of the contract worksconcerned during the period of insurance and allow the Insurer to inspect andexamine such record at any reasonable time;

        9.2.3 declare to the Insurer the actual amountspent in the contract works by the time of declaration as well as updatedestimate contract value at an interval of every twelve (12) months from theinception date of this Policy, if the construction period of the insuredproject is longer than thirty-six (36) months, the Insurer shall adjust the premium accordingly;

        9.2.4 provide the Insurer with theactual final contract value within three (3) months after the expiry date of  the Policy, and the premium shall be adjusted accordingly.


        Article 10 Thedeductibleshall be agreed upon between the Applicant and the Insurer when entering intothe insurance contract and be specified in this Policy.




        Article 11 The Insurer may, at his own option, indemnify theinsured in respect of loss of or damage to the property insured either by wayof payment in cash or by way of repair or replacement of the items lost ordamaged. Nevertheless the extra costsand/or expenses of any alterations, additions or improvements occurring in thecourse of repair or replacement carried out by the Insured shall not berecoverable under this Policy.


        Article 12 In case of any loss or damage recoverable under thisPolicy, the Insurer shall ascertain the loss amount on the following basis:

        12.1 In cases where damage which can be repaired, theInsurer shall indemnify the costs incurred necessarily to repair or to restorethe damaged property to its nearest condition immediately before the occurrenceof loss or damage after deducting the salvage value specified in Article 46.If, however, the costs of repair equal or exceed the actual value of thedamaged property immediately before the occurrence of loss or damage, thesettlement shall be made on the basis provided for in Article 12.2;

        12.2 In the event of a total or constructive total loss,the Insurer shall pay the actual value of the insured property immediatelybefore the occurrence of the loss or damage, after deducting the salvage valueas reached in Article 46.


        Article 13 For theloss of or damage to the insured property recoverable under this Policy, theamount of indemnity shall be ascertained on the following basis:


        13.1 If thesum insured is equivalent  to or higherthan the amount required to be insured , the amount of indemnity shall be theactual loss sustained  but in no caseshall the maximum liability of the Insurer exceed the amount required to beinsured.


        13.2 If the sum insuredis less than the amount required to be insured, the amount of indemnity shallbe such a proportion of the actual loss as the sum insured bears to the amountrequired to be insured, but in no case shall the maximum liability of theInsurer exceed the sum insured.


        Article 14 The amount of indemnity for any one accident is theamount as reached in Article 13 after deduction of the deductible for any oneaccident, or the amount as reached in Article 13 after deduction of the amountmultiplying the deductible ratio.


        Any loss of or damage to the property insured arising during any one periodof seventy-two (72) consecutive hours, caused by storm, typhoon, flood or othercontinuous occurrence of natural hazards shall be deemed as a single event andconstitute one loss occurrence, deducting the deductible (ratio) for one timein the settlement of any claim. The commencement of any such seventy-two (72)hour period can be decided at the discretion of the Insured. However, thereshall be no overlapping in any two or more such seventy-two (72) hour periodsin the event of damage occurring over several continuous seventy-two (72) hourperiods.


        Article 15 If the property insured specified in this Policyhas more than one item, the Insurer shall calculate the amount of indemnityitem by item and the liability of the Insurer in respect of each item shall notexceed its insured amount specified in this Policy nor the limit of indemnityas specified in the Special Provisions or Endorsements where applicable. But inno case shall the maximum liability of the Insurer in respect of materialdamage under this section exceed the total sum insured specified in thisPolicy.


        Article 16 If the sum insured is equivalent to or greater thanthe amount required to be insured, the Insurer shall pay the Insured in respectof the necessary and reasonable costs and/or expenses incurred for the purposeof preventing or diminishing imminent damage to property insured caused byperil insured against by this Policy, in which case, the amount of such sue andlabor expenses shall be calculated separately from the amount of indemnity forthe Damage of the property insured, subject to the limit of the amount requiredto be insured of the rescued property.


        If the sum insured is less than the amount required to be insured, thepayment of the aforementioned sue and labor expenses shall be such proportionof the actual expenses as the sum insured of the rescued property insured bearsto its amount required to be insured, and calculated separately from the amountof indemnity for the Damage of the property insured, subject to the limit ofthe sum insured of the rescued property insured.


        In the casethat uninsured items are included in the rescued property, the Insurer shallonly pay for theproportion of thesue and labor expensesas the amountrequired to be insured for the rescued property insured bears to the totalvalue of the rescued property.


        Article 17 In the event of a partial loss, upon settlement of theclaim by the Insurer, the sum insured of this Policy shall be correspondinglyreduced from the date of Damage, and no premium shall be refunded by theInsurer for so reduced. If reinstatement of the sum insured is required by the Applicantupon settlement of the claim, an additional premium for the reinstated amountshall be charged on pro rata daily basis from the date of requirement by the Applicantto the expiry date of this Policy. 





        Article 18 Subject to the terms, exclusions, conditions andprovisions contained in the Policy or endorsed thereon, the Insurer shallindemnify the Insured in respect of any sums which the Insured shall becomelegally liable to pay as damages as a result of

        18.1 accidental death of or bodily injury to or illness of third parties,or

        18.2 accidental loss of or damage to property belonging to third parties caused by an accident occurring in directconnection with the performance of the contract works insured and happening onor in the immediate vicinity of the worksite during the period of insurance.


        Article 19 Subject to the terms, exclusions, conditions andprovisions contained in the Policy or endorsed thereon, the Insurer shall alsoindemnify the Insured in respect of arbitration or litigation costs or othernecessary and reasonable costs (hereinafter called Legal Cost), which arepayable by the Insured legally or by arbitration arising from an event insuredby this Policy subject to prior written consent of the Insurer.




        Article 20  The Insurershall not be liable for:

        20.1 any loss of or damage to any property, land orbuilding caused by vibration or by removal or weakening of support, and bodilyinjury to any person or material damage to property occasioned by or resultingfrom any such loss or damage;

        20.2 anyaccident caused by vehicles, ships or aircrafts licensed for general transportuse;

        Article 21 The  following shall beexcluded from the cover provided by this section:

        21.1 any loss or damage and expenses covered orrequired to be covered under Section I of this insurance contract;

        21.2 death of or bodily injury to or illness of theEmployer(s) or the Contractor(s) or any other related party(ies) or theiremployees or workmen engaged in connection with the contract works on the site,or members of their families.

        21.3 any loss of or damage to property belonging toor held in care, custody or control of the Employer(s) or the Contractor(s) orany other party(ies) concerned or the employees or workmen of one of the aforesaid.

        21.4 any contractual liability assumed by theInsured, unless such legal liability would have been attached to the Insured inthe absent of  such contract.




        Article 22 The Limit of Indemnity includes the limit ofindemnity for any one accident, the limit of indemnity for bodily injury perperson, the aggregate limit of indemnity, which are  agreed upon between the Applicant and theInsurer and specified in this Policy.


        Article 23 deductible shall be agreed upon between theApplicant and the Insurer when entering into the insurance contract and be specifiedin this is Policy.




        Article 24 TheInsurer shall ascertain the amount of indemnity on the following basis:


        24.1 Negotiations between the Insured and theClaimant, and with prior confirmation of the Insurer;


        24.2 Arbitrament by the Arbitrator;


        24.3 Judgement by the People’s Court;


        24.4 Other means approved by the Insurer.


        Article 25 For losses identifiable within the period ofinsurance, the amount of indemnity is calculated on following basis:


        25.1 For any one accident, the Insurer shallindemnify the Insured up to the limit of indemnity for any one accident, inwhich the indemnity for bodily injury per person shall not exceed the limit forbodily injury specified in this Policy.


        25.2.1 The Insurer shall, subject to Article 25.1, indemnify the Insured afterdeducting the deductible for any one accident specified in this Policy.Nevertheless the deductible is not applicable to liability arising from bodilyinjury.


        25.2.2 The Insurer shall, subject to Article 25.1, indemnify the Insured afterdeducting the amount as calculated by the deductible ratio for any one accidentspecified in this Policy. Nevertheless the deductible is not applicable toliability arising from bodily injury.


        25.3 Theaggregate amount of indemnity for series of incidents shall not exceed theaggregate limit of indemnity specified in this Policy.


        Article 26 the Insurer shall indemnify the Insured for legalcosts arising from the accident as agreed in this Policy in addition to theamount calculated in accordance with Article 25.


        Article 27 The Insurer can make payment directly to the thirdparty suffering loss or damage caused by the Insured, subject to relevant lawsor regulations, or agreement in this Policy.

        In case theInsured shall become legally liable to pay as damages to the third party, the Insurer shall, at the claim of the Insured,indemnify the third party directly. The third party is entitled to request theInsurer directly for the indemnity he deserves when the Insured fails to claimin a timely manner. The Insurer shall not make payment to the Insured unlessthe Insured has indemnified the third party suffering loss or damage caused bythe Insured.






        Article 28 The Insurer shall not indemnify theInsured in respect of any loss, damage, liability or expenses resulting from oraggravated by:

        28.1 war, warlike operation, hostilities, armedconflicts, terrorism, conspiracy insurrection, coup d’etat;

        28.2 governmental or judicial actions;

        28.3 strike, riot, civil commotion;

        28.4 willful act or gross negligence of the Insuredor his representative;

        28.5 nuclear fission, nuclear fusion, nuclearweapon, nuclear material, nuclear radiation, nuclear explosion, nuclearcontamination and other radioactive contamination;

        28.6 pollution of any kind including atmosphere,land and water pollutions.

        Article 29 The Insurer shall not indemnify theInsured in respect of following loss, damage or expenses resulting from oraggravated by:

        29.1 cessation of work whether total or partial;

        29.2 consequential loss of any kind or descriptionwhatsoever including penalties, losses due to delay or loss of contract;

        29.3.1 the deductibles stated in this Policy to beborne by the Insured;

        29.3.2 the deductibles calculated by the deductibleratio stated in this Policy.



        Article 30 The period of insurance of this Policy shall followthe agreement stated below:

        30.1 The liability of the Insurer shall beginnotwithstanding any date to the contrary specified in this Policy, directlyupon commencement of the physical work or after the unloading of the insuredmaterials or equipments on the worksite and shall expire immediately after acertificate of completion has been issued for part or whole of the insuredproject or part or whole of the insured project have been tested aftercompletion or actually occupied or put into commercial use or taken over by theEmployer, whichever is the earlier. In no case shall the effective date beearlier or the expiry date be later than the period of insurance specified inthis Policy.

        30.2 Notwithstanding anything to the contrarystated in the contract concerned, the Insurer shall be liable only for theloss, damage, expenses and/or liabilities caused by the testing orcommissioning occurring during the testing or commissioning period stated inthis Policy. In the case of each used or second-hand item of property orequipments insured, the insurance to such items or equipments shall, however,terminate immediately on the commencement of the testing and commissioning.

        30.3 Any extensions of the period of insuranceshall be subject to the prior written consent of the Insurer Otherwise, theInsurer shall not be liable for any loss, damage, expense and/or liabilitiesafter the expiry date of the construction period stated in the Policy.




        Article 31. Incase of application of standard clauses, the Insurer shall enclose them in theProposal Form and explain the contents of the insurance contract to theApplicant. For the clauses exempting the Insurer’s liability, the Insurer shallmake remarkable notice in the Proposal Form, Policy or other certificates todraw the Applicant’s attention, and explain them clearly in written or oral formwhen entering into the insurancecontract. Otherwise, such clauses shall bevoid.


        Article 32. TheInsurer shall issue the Policy or Endorsements in a timely manner after theestablishment of an insurance contract.  


        Article 33.The Insurer’s right tocancel the Policy as stated in Article 37 is void if not exercised by theInsurer within thirty days after his acknowledgement of any causes forcancellation of this Policy. After two years from the establishment of theinsurance contract, such right to cancel the Policy is also void and theInsurer shall indemnity the Insured in respect of loss, damage or liabilityinsured by this Policy.


        Ifbefore the establishment of the insurance contract, the Insurer is aware of theApplicant’s misrepresentation or non-disclosure, the Insurer cannot cancel thePolicy, and still shall indemnity the Insured in respect of loss, damage orliability insured by this Policy.


        Article 34. If the Insurer believes that the proofs and documents provided by the Insured, asrequired in Article 43, are not sufficient, the Insurer shall request theApplicant and/or the Insured to provide additional materials in time and oncefor all.


        Article 35. Uponreceipt of a claim, the Insurer shall confirm whether the Damage is covered bythis Policy or not in a timely manner.  For complicated cases, the Insurer shall makedecision within thirty days, unless otherwise stipulated in the insurancecontact.


        The Insurershall notify the Insured of the decision in a timely manner. If the loss,damage or liability is covered by this Policy, the Insurer shall make paymentwithin ten days after reaching an agreement with the Insured. If the time limitfor indemnity is specifically stipulated in the insurance contact, the Insurershall make payment within such time limit. If the loss, damage or liability isnot covered by this Policy, within three days after the decision, the Insurershall issue a declination letter and explain the reasons to the Insured.

        Article 36. The Insurer shall allow an advance payment that can be determined by theavailable proofs or documents if the final settlement amount cannot bedetermined within sixty days after receipt of such claim and relevantdocuments, and pay the balance to the Insured after the final amount ofindemnity is adjusted.




        Article 37. Before entering into an insurance contract, the Applicant shall make full andaccurate representation and disclosure at the reques and/or inquiry t of theInsurer in respect of the property insured and the Insured himself and completethe Proposal Form faithfully.


        If the Applicant fails to fulfill the obligation ofmaking full and accurate representation and disclosure as aforementioned due tohis willful act and/or gross negligence, which may affect the Insurer’sdecision whether to write  the risk ofthe insurance and, if so, whether to raise the premium rate, the Insurer isentitled to cancel the Policy.


        If the Applicant willfully fails to comply with the obligation of makingfull and accurate representation and disclosure, the Insurer shall not beliable for any loss or damage happening prior to the cancellation of the Policywhile no premium shall be refunded.


        If the Applicant, due togross negligence, fails to disclose in truth material particular(s) which hassignificant contribution to the occurrence of the event insured hereby, theInsurer shall not indemnify the Insured for any loss or damage happening priorto the cancellation of this Policy, but shall return premium collected.


        Article 38. The Applicant shall pay premium as agreed upon in theinsurance contract.


        If the premium is agreed to be paid in a lump, the Applicant shall pay the premium on orbefore the agreed due date. Otherwise, the Insurer shall not be liable for anyloss or damage which occurs prior to premium payment.


        If the premium is agreed to be paid in installments, the Insurer shall undertake liability in proportion of the paid premiumto the total payable premium before the occurrence insured hereby. Thepayable premium refers to the total premium that the Applicant shall pay asagreed prior to the occurrence.


        Article 39 The insured shall observe and fulfill the relevantLaws, regulations and requirements on fire, safety and production operations,carefully select workers, comply with all laws and regulations relating toconstruction and erection, technical procedures and safety rules to protect thesecurity of property insured.


        The representative of the Insurer shall at any suitable time be entitled toattend the worksite and inspect or examine the risk exposure of the property insured.The Insured shall provide full assistance and all details and informationrequired by the Insurer as may be necessary for the risk assessment. The abovementioned inspection or examination shall in no circumstances be held as anypromise to the Insured by the Insurer. The Applicant and the Insured shallimplement in a serious manner the written recommendations provided by theInsurer in respect of eliminating risks or dangers.


        If the Applicant or the Insured fails to comply withdue obligations concerning reasonable precautions, the Insurer is entitled tocharge additional insurance premium or cancel the Policy.


        Article 40 Once any property insured is transferred, theInsured or the Assignee shall notify the Insurer in time.


        If the risk increases materially due to that transfer, the Insurer maycharge additional premium or cancel the Policy subject to the terms and conditionsof the Policy within thirty days upon the Insurer’s receipt of such notice, inwhich case, the Insurer shall retain the premium due for the period frominception of the Policy to the date of cancellation, and refund the remainderof the charged premium to the Applicant


        Ifthe Insured or Assignee fails to comply with the obligation of notification,the Insurer shall not be liable for any loss or damage due to the materialincrease of risks resulted from such transfer of the property insured.


        Article 41 During the Period of Insurance, the Insured shall  give the Insurer timely writtennotice  of the material changes of the project design, methods, techniques or any other material alteration which materiallyincreases the risks of the insurance and affects the Insurer’s decision whetherto continue writing the risk of insurance and, if so, whether to increase the premium,in which case, theInsurer has the right to claim for additional premiums or cancel the Policy. Ifthe Insurer cancels the Policy, the Insurer is entitled to retain the premiumdue for the period from the date of inception to the date of cancellation and thebalance of premium shall be returned to the Applicant.


        If the Insured fails tocomply with the obligation of notification aforementioned, the Insurer shallnot be liable for any loss or damage due to the material change.


        Article 42 If any event giving rise toor likely to give rise to a claim under this Policy comes to his knowledge, theApplicant or the Insured shall:


        42.1. take all necessary and reasonable measures toprevent or minimize the damage; otherwise the Insurer shall not indemnifythe Insured in respect of the extended or aggravated loss or damage causedhereby;


        42.2. notify the Insurerimmediately and submit a written report on the cause, course and extent of theloss or damage. If the Applicant and/or Insured fail to notify the Insurerin time due to his willful act or gross negligence, which makes the Insurer notadjust the nature, cause and extent of the loss, the Insurer shall notindemnify the Insured in respect of the uncertain part, except that theInsurer is aware or ought to be aware of the occurrence timely by other means.


        42.3. preserve the spot, permit and assist the Insurer to investigate theaccident. If the cause of the accident cannot be ascertained or the severityof the damage cannot be verified due to the refusal of or disturbance by theInsured, the Insurer shall not indemnify the Insured in respect of suchuncertain part of loss or damage.

        42.4 report to the PublicSecurity Bureau immediately in the case of loss of or damage to the property insureddue to theft or burglary or malicious acts;


        42.5 immediately notify the Insurer in writing whenever having knowledge ofany impending prosecution in connection with any accident for which there maybe liability under this Policy and forward to the Insurer every letter writ,summons or process or other court documents on receipt thereof


        Article 43 To lodge a claim, the Insured should submit to theInsurer the Policy, claims application, Breakdown of loss and damage ofproperty insured, loss report, as well as other relevant evidence and / ordocuments concerning the nature of the accident, cause and the extent of loss.


        If the Applicant orInsured fails to comply with their obligation of providing the proofs anddocuments aforementioned, which makes the Insurer not able to verify the lossor damage, the Insurer shall not indemnify the Insured in respect of theuncertain part of the loss or damage.


        Article 44 If the discovery of adefect in any property insured indicates or suggests that similar defect existsin other property insured, the Insured shall, at his own expenses, investigateand rectify forthwith the defect in such other property.Otherwise, the Insurer shall not be liable for any loss or damagearising out of the said or similar defect thereof.




        Article 45 The Insured cannot lodge any claim against theInsurer if he has no Insurable Interest in the property insured at the time ofthe occurrence hereby insured.


        Article 46 The property insured still carrying salvage valueafter loss or damage shall be disposed upon agreement between the Insured andInsurer. If the salvage of the damaged property is retained by the Insured, thesalvage value shall be deducted from the actual amount of indemnity 


        Article 47 If at theoccurrence of any event insured hereby, there be any double insurancesubsisting, the Insurer shall not pay or contribute more than his rateableproportion of loss or damage as the corresponding sum insured under this Policybears to the corresponding total sum insured under all these policies.


        The Insurer shall not advance the amount payable byother insurer(s). If the Insurer has paid more than his share due to the Insured’snon-disclosure, the Insurer is entitled to claim for the portion paid inexcess.


        Article 48 If any third party is held liable for the loss ordamage insured against hereby, the Insurer shall be entitled by subrogation toclaim for indemnity against such third party from the date of payment subjectto the limit of the payment, and the Insured shall provide the Insurer with allthe necessary documents and relevant information known to him.


        If the Insured has alreadybeen indemnified by the third party liable for the loss, the Insurer shalldeduct the corresponding amount when calculating the amount of indemnity.


        TheInsurer shall not be liable for the loss or damage after the occurrence ofinsured event, if the Insured waive the right to claim against the third partyliable before the Insurer makes payment of indemnity. If the Insured waives the right to claim against thethird party liable without the Insurer’s consent after receiving indemnity fromthe Insurer, such waiver of right is invalid. If the Insurer cannot exercisethe right of subrogation due to willful act or gross negligence of the Insured,the Insurer may deduct a corresponding amount when calculating the amount ofindemnity or request refund of a corresponding amount  from the indemnity paid to the Insured.


        Article 49 The limitationof action to claim for indemnity under this Policy shall be two years from thedate that the Insured is aware or ought to be aware of the occurrence of lossor damage insured hereby.




        Article 50 All disputesarising from implementing this Policy shall be settled through negotiationsbetween the parties concerned. Upon failure to reach an agreement throughnegotiations, such dispute shall be referred to the arbitration commissionspecified in the Policy. If there is no arbitration commission specified in thePolicy and no agreement reached for arbitration, legal proceeding could beinitiated with the People’s Court in People’s Republic of China.


        Article 51 All disputes shall be governed by the laws ofthe People’s Republic of China,but except laws of Hong Kong SAR, Macau SAR, and Taiwan.




        Article 52 In respect of partial loss of the property insured,the Applicant is entitled to cancel the Policy within thirty days from the datethat the Insurer fulfils the obligation of payment. This insurance may also beterminated at the option of the Insurer by sending fifteen days’ notice to theeffect being given to the Applicant, unless otherwise agreed and stipulated inthis Policy.


        Ifthis Policy is cancelled as aforementioned, the Insurer shall refund to theApplicant the premium of the undamaged proportion of the property insured afterdeducting the premium that shall be charged from the date of inception to thedate of cancellation.


        Article 53 At the Applicant’s request for cancellationof the insurance contract before the inception of insurance, the Insurer shallcharge the Applicant a commission for cancellation as stipulated in the Policy,but shall return the balance of the premium to the Applicant. If the Policy iscancelled at the request of the Insurer, no commission shall be charged and thefull premium charged shall be returned to the Applicant.


        Atthe Applicant’s request for cancelation of the Policy after inception ofinsurance, the insurance shall terminate from the date that the Applicantinforms the Insurer, and the Insurer shall retain the premium calculated on prorata daily basis from the inception date of insurance to the date of cancellation,and refund the balance of the premium to the Applicant. This insurance may alsobe cancelled at the request of the Insurer after inception of insurance bysending fifteen days’ notice to the effect being given to the Applicant, inwhich case the Insurer shall calculate the premium on pro rata daily basis fromthe inception date of insurance to the date of cancellation, and refund thebalance of premium to the Applicant.  


        Article 54  In the case that the property insured suffers totalloss insured against hereby, the insurance shall terminate upon the Insurer’s fulfillmentof indemnity obligation. If the loss is not covered hereby, the Policy shallterminate, and the Insurer shall refund the premium to the Applicant afterdeducting the short-term premium as calculated pro rata daily from the date ofinception to the date of loss.




        Article 55  In the event of a discrepancybetween the Chinese version and its English translation, the Chinese versionshall prevail.




        Article 56 The following definitions shall be applicable tothe wording concerned in this Policy.


        1. Naturalhazards: lightning, rainstorm, flood, tempest, cyclone, hailstorm, typhoon,hurricane, sandstorm, snowstorm, ice slush, sudden landslide, avalanche,mud-rock flow, sudden subsidence of ground and any other phenomena of naturewith strong destructive power and beyond human control.


        1.1 Earthquake: the shake theearth's crust makes.


        1.2 Tsunami: huge ocean wavescaused by submarine earthquake, volcanic eruption, underwater landslide orcollapse.


        1.3 Lightning stroke: a disastercaused by lightning. Lightning refers to an electric discharge phenomenonhappening in cumulonimbus clouds, between clouds or between clouds and ground.The destructive forms of lightning stroke are divided into direct lightningstroke and inductive lightning stroke. 


        1.3.1. Direct lightning stroke: loss caused as lightning hits property insureddirectly, which is covered hereby as direct lightning stroke liability.


        1.3.2. Inductive lightning stroke: static induction or electromagnetic inductioncaused by lightning stroke makes indoor metal objects which insulate againstground produce high potential and sparks, thereby leading to fire and damage ofelectric appliance, or high voltage induction of lightning results in damage ofelectric appliance, which is insured hereby as inductive lightning strokeliability.


        1.4 Rainstorm: rainfall withprecipitation of more than 16mmper hour, or more than 30mmwithin 12 consecutive hours, or more than 50mm within 24 consecutive hours.


        1.5 Flood: flash flood, flooding ofrivers, tide landing and backflow. The following are not flood risks: regularflood tide, water leakage of automatic sprinkler system, underground waterseepage and water pipe burst.


        1.6 Tempest: natural wind withforce over Beaufort Force 8 and speed more than 17.2 m/s.


        1.7 Tornado: a violent whirlwindwithin small range and in short time, with average maximum land speed from 79m/s to 103m/s, and extreme maximum speed more than 100m/s.


        1.8 Hailstone: ice block or iceball of a diameter over falling to the ground from severe convectivecumulonimbus clouds, whose diameter is greater than 5mm and core is hard. 


        1.9 Typhoon and hurricane. Typhoon is a tropical cyclone with the maximumaverage force near the center reaching or exceeding Beaufort Force 12,namely  tropical cyclone at speed of morethan 32.6m/s.Hurricane is a of the same nature as typhoon but positioned differently areasas the Indian and Atlantic Ocean for hurricane while northwestern Pacific Oceanfor typhoon.


        1.10 Sand storm: a weatherphenomenon that strong wind blows up large quantities of dust and sand on theground making air dirty and horizontal visibility less than one kilometer.


        1.11 Snowstorm: snowfall equal to or greater than 10mm in 12 consecutive hours.


        1.12 Ice slush: a phenomenon that during springbreak, the floating of ice blocks is obstructed and ice blocks accumulateresulting in river channel blockage and sharp rise of water level, river water overflowsfrom river channel and spreads all around to cause damage.


        It is also ice slushrisk covered against in this insurance that in mountain, valley or otheroverland area, ice block formed by rain or snow gets heavier and drops anddamage is so made.


        1.13 Sudden landslide: a phenomenon that unstablesoil bodies or man-made deposits on slopes slide down suddenly and integrallyunder the action of gravity.


        1.14 Avalanche: a phenomenon that rock cliffs,soil cliffs and rocks crumble and collapse due to natural weathering and rainerosion and a great deal snow collapses and tumbles down from on high suddenlyunder the action of gravity. 


        1.15 Mud-rock flow: a special torrent containinglarge quantities of sand and stones, excited by rainwater and water produced byice and snow melting. 


        1.16 Sudden subsidence of ground: aphenomenon that the earth's crust subsides suddenly resulting from naturalvariation and stratigraphic contraction. It can also be that the groundsubsides suddenly due to erosion of tide water, river or heavy rain, or due tocavities or pockets about which the contractor has no such stratigraphicknowledge before construction. However, foundation subsidence, crack andcollapse, etc, caused by not meeting the requirements of construction are notsudden subsidence of ground. 


        2  Accident: unforeseen, uncontrollable andsudden event which leads to material damage, which includes fire and explosion.


        2.1 Fire: fire is a disaster caused by combustion out of control in time orspace. The Insurer shall not be liable for the peril of fire unless thefollowing three conditions are met together:


        2.1.1. Combustion produces heat, light and flame;


        2.1.2. Combustion is occasional and unexpected;


        2.1.3. Combustion goes beyond control and tends to spread and expand.


        Combustion itself is not “fire” insuredin this Policy. Purposive burning in manufacture or daily life is not insuredagainst, such as burning down contaminated clothes for epidemic prevention orburning the grass on waste land by fire, etc.


        The loss caused by baking, roasting orironing is not insured as there is neither combustion nor spreading orexpanding tendency.


        The damage to electric motors,appliances and equipment caused by overuse, overvoltage, swinging cross, flash,leakage and self-heating is not “fire” insured. However, if combustion happens,spreads beyond control, fire insured comes into existence and the Insurer shallthen be liable t for the losses of electric motors, appliances and equipment.


        2.2 Explosion: explosion includes physicalexplosion and chemical explosion.


        2.2.1. Physical explosion. Physical explosion happens when the container cannot bearthe sharply rising pressure when the liquid inside changes into steam or gas.Some examples are boiler explosion, air compressor explosion, compressed gascylinder explosion and liquid gas storage tank explosion, etc. Boiler orpressure vessel explosion is an accident that during use or pressure test, aboiler or pressure vessel bursts making its internal pressure to instantlydrops to external air pressure, i.e. explosion accident.


        2.2.2. Chemical explosion. Chemical explosion happens when plenty of heat and gas arereleased and expands with great pressure when things decompose or burnsmomentarily. Some examples are gunpowder explosion, flammable dust and fiberexplosion, flammable gas explosion and explosion of various chemicals, etc.


        Lossescaused by inherent vice, latent defect, wear and tear, inferior quality, ornegative pressure inside container are not insured under this coverage.


        3. The amount required to be insured: the amountrequired to be insured is the amount insured reached by Article 9.1 and 9.2 ofthis insurance contract.