SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT INSURANCE
1. INSURING AGREEMENTS
The
Insurers agree, subject to the Combined Single Limits of Liability, terms and
conditions applicable to Section Two, to indemnify the Insured
against:
A. all
sums which the Insured shall by law or under the terms of any oil and/or gas
and/or thermal
energy lease and/or license be liable to pay
for the cost of remedial measures and/or as damages for
bodily injury (fatal or non-fatal) and/or loss of, damage to or loss of use of
property caused directly by seepage, pollution or
contamination arising from wells insured herein;
B. the cost of, or of any attempt at,
removing, nullifying or cleaning up seeping, polluting or
contaminating
substances emanating from wells insured herein, including the cost of
containing and/or diverting the substances and/or preventing the substances
reaching the shore;
C. costs
and expenses incurred
in the defence
of any claim
or claims resulting from actual or
alleged
seepage, pollution or contamination arising from wells insured herein,
including Defence
Costs and costs and expenses of litigation awarded to
any claimant against
the Insured,
provided,
however, that the inclusion
of the above
costs (and expenses)
shall in no way
extend the
combined single limits of liability of the Insurers over all Sub-Sections of
this Section
Two,
provided always that such seepage, pollution or contamination results
from both
(1) an accident or occurrence taking place during the
period of this Insurance (including any
continuation
thereof provided for by Clause 13. of the Additional General Conditions) and of
which
notice has been given in accordance with Clause 3. of
the General Conditions of this Section Two,
and
(2) an occurrence giving rise to a claim which would
be recoverable under Sub- Section A of Section
Two if the Insured's Retention applicable to Sub-Section A were nil.
2. INSURED
As
respects this Sub-Section C only, but subject always to the Combined Single
Limit of Liability over all Sub-
Sections of this Section Two, the unqualified word
"Insured" includes the Named Insured, and any principal,
officer, director or stockholder or employee thereof
while acting within the scope of his duties as such.
3. COST AND APPEALS CLAUSE
In the event of any claim and/or series of claims arising out of one Occurrence where the Insured's final gross
claim is likely to exceed the retention of the Insured, no costs shall be incurred on behalf of the Insurers without
the consent of the Insurers, and if such consent is given, the Insurers shall consider such costs as part of the
final claim hereunder. No settlement of losses by agreement shall be effected by the Insured without the
consent of the Insurers where the Insured's final gross claim will exceed the retention of the Insured
In
the event that the Insured elects not to appeal against a judgement in excess
of the retention of the Insured, the Insurers may
elect to conduct such appeal at their own cost and expense, and shall be liable
for the taxable cost and interest incidental thereto, but in
no event shall the liability of Insurers exceed the Combined Single Limits of Liability over all Sub-Sections of this Section Two.
4. EXCLUSIONS
There shall be no indemnity or liability under this Sub-Section C for:
A. any
loss of or damage to any drilling or production equipment at the site of any
well insured herein;
B. any
claim recoverable under Section Two solely by reason of the addition or
attachment to Sub-
Section A of the Underground Control of Well Endorsement;
C. any claim arising directly or indirectly from
seepage, pollution or contamination if such seepage,
pollution or contamination:
(1) is deliberate from the standpoint of the Insured
or any other person or organisation acting for
or on behalf of the Insured; or
(2) results directly from any condition which is in
violation of or non-compliance with any
governmental
rule, regulation or law applicable thereto; notwithstanding the foregoing, this
Exclusion does not apply with respect to any such
condition which at the time of loss is in the process
of being corrected by a schedule or program sanctioned and approved by the appropriate governmental authority with jurisdiction over such rule,
regulation or law, to the extent that the Insured is in compliance with such
schedule or program;
D. any
claim for mental injury, anguish or shock unless same results from physical
injury to the
claimant.
SEEPAGE AND POLLUTION, CLEAN-UP AND CONTAINMENT
Subject to
the terms, conditions,
exclusions and Combined
Single Limits of
Liability of Section Two, it is agreed to extend coverage under this Sub-Section C to indemnify or
pay on behalf of the
Insured all sums, costs and
expenses as defined
in the Insuring
Agreement applicable to this
Sub-Section C arising from seepage,
pollution or contamination
arising from property covered under Section 1 or which could be covered
under Section 1 had the Insured had an interest.
However, no indemnity shall be payable to
the Insured in respect of such properties unless all the following conditions
have been met:
a. the seepage, pollution or contamination was caused
by an event and was neither expected or
intended by the Insured and
b. the event first commenced on an identified
specific date during the Period specified in the Policy
Schedule hereto.
c. the event was first discovered by the Insured or
the Operator within …. days of such first
commencement and
d. written notification of the event was first
received from the Insured by Insurers within … days of
the Insured's or Operator's first discovery of the event and
e. the event did not result from the Insured's
intentional violation of any statute, rule, ordinance or
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