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Hiscox Technology
Exhibit 10.13
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WORDING
ASure
USA
Cyber Insurance [HISCOX LOGO]
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CONTENTS
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SECTION PAGE
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OUR PROMISE TO YOU - 2 -
WHAT HAS TO GO WRONG - 2 -
WHAT WE WILL PAY AND HOW MUCH
WHAT WE WILL PAY - 3 -
HOW MUCH WE WILL PAY - 3 -
WHAT IS NOT COVERED - 4 -
YOUR OBLIGATIONS TO US
BEFORE WE AGREE TO INSURE YOU - 6 -
DURING THE POLICY PERIOD - 6 -
WHEN PERFORMING YOUR BUSINESS ACTIVITIES - 6 -
IF A PROBLEM ARISES - 7 -
GENERAL MATTERS - 8 -
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Throughout this policy words in bold have a special meaning and will be defined
under section GENERAL MATTERS - Definitions.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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OUR PROMISE TO YOU
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Insurance is a promise to pay. This insurance contains our promise to protect
you financially up to a specified amount where:
o A problem arises from the performance of your business activities
which falls within WHAT HAS TO GO WRONG and
o You first become aware of this problem during the policy period and
tell us about it in accordance with YOUR OBLIGATIONS TO US - If a
problem arises - Notification and
o This problem's financial consequences are covered by WHAT WE WILL
PAY AND HOW MUCH and
o Neither the problem nor its consequences are excluded in WHAT IS
NOT COVERED and
o You comply with the requirements set out in YOUR OBLIGATIONS TO US
WHAT HAS TO GO WRONG
Claims 1. A party brings or threatens a claim against
against you you for financial compensation including a related
injunction arising from your use of the Internet,
electronic mail, any intranet or extranet or a World
Wide Web site due to any
(a) infringement of any intellectual property
rights including copyright, trademark or
moral rights or an act of passing-off;
(b) breach of confidence or infringement of any
right to privacy;
(c) misuse of any information which is either
confidential or subject to statutory
restrictions on its use;
(d) defamation;
(e) inadvertent transmission by you of any
computer virus to anyone with whom you do
business, or who uses your World Wide Web
site in the course of their business, which
directly arises from your breach of a duty of
care. This does not apply to any virus
created by you, your employees or anyone
while working for you.
2. An aggrieved party brings or threatens a
claim against you for financial compensation due to
your negligence in the course of your business
activities
A claim under 1(a) - (d) is included if arising from:
(i) the authorised contents of your World Wide
Web site including the advertising or
marketing of your business on your Web site;
(ii) the unauthorised and malicious alteration or
destruction of anything on your World Wide
Web site by any person (other than your
directors, partners or employees) who had a
clear intention of causing you damage; or
(iii) the contents of any electronic mail sent by
any employee, director or partner of yours to
anyone with whom you do business.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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A claim under (d) is included if arising from the
contents of any internal electronic mail which
contains any defamatory statement concerning a
business competitor of yours.
Your own losses
Web Site damage Your World Wide Web site has been damaged, destroyed
or altered by any person (other than any director,
partner or employee of yours) acting maliciously with
a clear intention of causing you loss and damage.
WHAT WE WILL PAY AND HOW MUCH
WHAT WE WILL PAY
Claims against you
Investigation, We have the right, but not the duty, to conduct, in
settlement and your name, the investigation, settlement, or defense
defence costs of any claim, loss or covered subpoena. If we agree
to conduct the investigation, settlement, or defense,
we will pay any associated costs. It is understood
that the payment of these costs will reduce both the
policy's aggregate limit of liability as well as the
single loss limit of liability for the particular
claim and could even exhaust that limit entirely. If
we think it necessary we will appoint an adjuster,
attorney, or other appropriate person to deal with the
claim or loss. We may, at our sole discretion, appoint
your own attorney but only on a similar fee basis as
our attorney and only for work done with our prior
written approval. Once we agree to conduct the
investigation, settlement, or defense, we may settle
or defend the matter based solely upon our evaluation
of the likelihood of success.
Settling a claim Subject to the aggregate limit of liability of your
for damages policy, we will pay the amount agreed by us and the
claimant either through negotiation, mediation or some
other form of alternative dispute resolution to settle
your alleged liability for a claim.
When you are If we cannot settle, we will pay the amount which you
held liable by a are held liable to pay, including the claimant's
court for a claim costs, in either court or arbitration proceedings up
to and not exceeding the aggregate limit of liability
of your policy.
Your own losses
Web site damage We will pay the expenses incurred with our prior
written consent in replacing or repairing your Web
site to the same standard and with the same contents
before it was damaged, destroyed or altered. This will
include any advertising or publicity expenses involved
in contacting any people who attempted to use your Web
site while it was destroyed, damaged or altered.
HOW MUCH WE WILL PAY
For claims and If you pay the excess we will pay up to the limit of
their costs liability for each actual or threatened claim,
including costs and claims expenses covered by this
policy, subject to the overall aggregate limit of
liability for the policy period. The limit of
liability available to pay damages shall be reduced
and may be completely exhausted by the payment of
costs or claims expenses. Damages, costs and claims
expenses shall be applied against the excess.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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Web Site damage If you pay the excess we will pay a maximum of
$150,000 for all your losses.
Paying out the At any stage we can pay you the aggregate limit of
policy limit liability or what remains after any earlier payment
from that limit. We will then have no further
obligation to you of any kind, for claims, costs or
expenses.
WHAT IS NOT COVERED
This insurance does not respond to every conceivable claim or loss from the
performance of your business activities and so we will not make any payment for
any claim or loss which would otherwise be covered by this insurance, directly
or indirectly arising from, or occasioned by or due to:
Millennium 1. Any claim directly or indirectly arising out
and EMU of, or in any way connected with:
a) the actual, alleged or anticipated failure or
inability of any computer or electronic
device or component or system or embedded
programming or software, whether or not owned
by you or in your possession:
i) to correctly assign any date to the
correct day, week, month, year or
century;
or
ii) to correctly recognise or compute
any date which is or is intended to
be beyond 31 December 1998;
or
iii) to continue to operate as it would
have done had its current date, the
true date or any other date
relevant to any function being
carried out by it been prior to 1
January 2000;
b) the use of any arbitrary, ambiguous or
incompletely defined date in any data,
software or embedded programming, whether or
not owned by you or in your possession;
c) any measures taken with the intention of
averting or minimising any of the above.
2. any failure of any software you have supplied
to process correctly any data relating to a
single European Currency.
Matters specific 3. any statement, representation or information
to your business either concerning you or your business or
contained in your accounts, reports or
financial statements.
4. any statement you knew was defamatory at the
time of publication where you did not
reasonably believe that you would have a good
defence to an action on it.
5. any loss of profit, trading loss or trading
liability including those arising from the
loss of any client, account or business.
6. any financial advice you give or the
arrangement of any financing or credit
7. any infringement of a patent law
8. the unavailability or slow performance of
access to the Internet
9. the failure of communications infrastructure,
process or storage media or mechanisms,
including components thereof
[LETTERHEAD OF HISCOX TECHNOLOGY]
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10. "spam" being unsolicited mail, including but
not limited to sales literature
11. any obscenity, blasphemy or pornographic
material.
12. the credit risk from the use of credit cards
or other methods of payment the credit risk
or any compromise or breach of security in
respect of credit cards or other methods of
payment
13. any transactions exceeding $2000
14. any problem or dispute with any merchant's
payment to you
15. the representation that any party other than
you is insured by this policy
16. your insolvency
17. a merchant who was not approved according to
your standard registration process
18. the breach of any competition, restraint of
trade or anti-trust legislation or
regulation.
19. any official action or investigation by or
decision or order of any federal, state,
public, local or governmental body or
authority.
20. the operation or administration of any
health, pension or employee benefit scheme
plan, trust or fund including breach of any
relevant legislation or regulation such as
the U.S. Employee Retirement Income Security
Act of 1974.
21. the sale or purchase of or dealing in any
stocks, shares or other securities or the
misuse of any information relating to them
including breach of any relevant legislation
or regulation such as the U.S Securities Act
of 1933 and the Securities and Exchange Act
of 1934, both as amended.
22. any breach of the Racketeer Influenced and
Corrupt Organisations Act 18 USC Sections
1961 et seq, any amendments to this Act or
any rules or regulations made under it.
23. your breach of any taxation legislation or
regulation.
24. any pollution or contamination, including
noise, electromagnetic fields, radiation and
radio waves.
25. a change in law.
Already in the introductory clause at the start
26. any investigation by the Export
Administrationor similar legislation or
regulation. okay
Other insurances
27. death or any bodily or mental injury or
disease suffered by anyone.
28. anyone's employment with or work for you; or
any breach of an obligation owed by you as an
employer or any kind of discrimination or
harassment.
29. the ownership, possession or use of any land
or building, any animal, any aircraft,
watercraft or any motor vehicle.
30. the loss, damage or destruction of any
tangible property.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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31. the loss, damage or destruction of any bearer
bonds, coupons, share certificates, stamps,
money or other negotiable paper.
32. any personal liability incurred by a director
or officer of yours when acting in that
capacity or managing your business other than
when performing a business activity for a
client.
33. your manufacture, sale, supply, installation
or maintenance of any product.
34. any claim or loss recoverable under any other
insurance unless in excess of the limit of
that insurance.
Claims brought 35. any claim brought by an insured included in
by another the definition of you, or any party with a
insured financial, executive or managerial interest
in you, including any parent company; or any
party in which you have a financial,
executive or managerial interest, including a
subsidiary company.
Deliberate, reckless 36. any act, breach, omission or infringement
or dishonest acts you deliberately, spitefully, dishonestly or
recklessly commit, condone or ignore.
Non-compensatory 37. fines and contractual penalties, aggravated,
payments punitive or exemplary damages, additional
ok damages under the Canadian Copyright Laws or
any similar Act
Pre-existing 38. any claim, shortcoming in your work or your
problems own loss which you knew about, or reasonably
ok should have known about, before we agreed to
insure you.
Pollution 39. Any claim arising from:
(i) the actual, alleged or threatened
discharge, dispersal, release,
escape or failure to detect any
Pollutants.
(ii) any governmental or regulatory
directive or request that you pay
for the monitoring, clean up,
removal, containment, treatment,
detoxification or neutralization of
any Pollutants.
Nuclear 40. Any claim arising directly or indirectly
from:
(i) any injury, sickness, disease,
death or destruction caused by or
alleged to be caused by the
hazardous properties of any nuclear
material including but not limited
to the operation of a nuclear
facility by you or any other person
or organization;
(ii) any claim covered or potentially
covered under nuclear energy
liability insurance issued by any
insurance company, governmental or
quasi-governmental agency of any
country; or
(iii) any injury, sickness, disease,
death or destruction caused by or
alleged to be caused by the
furnishing of services, materials,
parts or equipment in connection
with the planning, construction,
maintenance, operation or use of
any nuclear facility.
War 41. any claim, loss or damage directly or
indirectly occasioned by, happening through
or in consequence of war, invasion, acts of
foreign enemies, hostilities (whether war be
declared or not), civil war, rebellion,
revolution, insurrection, military or usurped
power or confiscation or nationalisation or
requisition or destruction of or damage to
property by or under the order of any
government or public or local authority.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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Computer You failed to take reasonable steps to maintain and
systems protection upgrade any programs which protect against any
unauthorised use or access to your computer systems,
electrical links or World Wide Web site.
Back-ups You failed to take back-up copies of any data, file or
program at regular intervals.
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YOUR OBLIGATION TO US
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It is important that you understand you have a number of obligations to us which
arise before we agree to insure you; during the policy period; when performing
your business activities; and if a problem arises.
BEFORE WE AGREE TO INSURE YOU
The information given to us before we agree to insure must be complete, accurate
and not misleading. Because of its importance, the proposal form and all other
written information which you, or anyone on your behalf, provide are
incorporated into and form the basis of this insurance.
The proposal form reminded you that before we agreed to insure you all material
matters must be disclosed and all material representations must be true
otherwise we unless.....
you satisfy us that the alleged misrepresentation or failure to disclose was
innocent and not intended to mislead us; and finally, our interests have not
been prejudiced as a result.
Where the material matter is a claim, shortcoming in your work or a loss, we
will cover you either on the basis of this insurance or that in force when the
matter should have been notified whichever gives the more restrictive cover.
DURING THE POLICY PERIOD
Mergers or change You must tell us within 30 days if you take over or
in ownership merge with another business or if any party acquires
25% or more of the voting shares of your business. If
you fail to notify us the stated 30 days, from the date
you learned of the merger or purchase, there will be no
coverage for losses arising out of the business
activities of the new or merged entity. We may charge
an additional premium for the new or merged entity
gaining further coverage.
Representations You must gain our prior written approval of any
about Insurance representation made by you or on your behalf on a
website or elsewhere about Lloyd's, us or the cover
this policy offers
Payment of the We will not make any payment under this insurance
premium unless you have paid the premium by the agreed date or
agreed instalment dates.
WHEN PERFORMING YOUR BUSINESS ACTIVITIES
In view of the cover we provide under WHAT HAS TO GO WRONG we will not cover you
where you unduly increase the risk of a problem arising. We will not, therefore,
make any payment for any claim or loss which is otherwise covered by this
insurance if:
Entering into You failed to take reasonable steps before entering
onerous contracts into a contract with a client, or extending the scope
of an existing contract, to ensure that either you
could provide the required level and quality of
performance or services for the quoted price using the
resources available to you or the contract was capable
of being performed in accordance with all its terms and
any representations made by you or on your
behalf.
Onerous contractual You agree in your contract with a client either to use
terms more than reasonable care and skill or contractual
terms to have a greater financial responsibility for
any claim covered by this insurance than would
otherwise be the case at law.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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Except for those contracts that you have obtained specific prior written
approval from us
IF A PROBLEM ARISES
Notification We need notice of the following so that we can decide
what steps should be taken to protect your interests:
(a) your first awareness of a shortcoming in your
work for a client which is likely to lead to
a claim against you. This includes any
criticism of your work even though regarded
by you as unjustifiable.
If we accept your notification we will regard
any subsequent claim as notified to this
insurance.
(b) any claim or threatened claim against you;
(c) any damage or alteration to your Web site.
We will not indemnify you under this insurance unless
we receive such notice promptly in the policy period,
or at the latest within 30 days after it expires for
any problem you first became aware of in the 14 days
before expiry.
ok
Your dealings We will not make any payment under this insurance if
with others you, when dealing with your client or a third party,
admit that you are liable for what has happened, make
any offer, deal or payment unless you have our prior
written agreement. You must also not reveal the amount
of cover available under this insurance, unless you
had to give these details in negotiating a contract
with your client or have our prior written agreement.
Providing us with You must provide us with full and accurate information
information and about any problem or potential problem. If you, or
assistance anyone on your behalf, tries to deceive us by
deliberately giving us false information then the
insurance will be treated as if it had never existed.
If we have accepted notice of any problem or potential
problem, then:
(a) You must give us, or anyone appointed by us,
at your expense, all the assistance and
information which we reasonably require and
you must do everything we reasonably request
to avoid, minimise, settle or defend any
claim or loss. This includes your paying the
excess, following our legal advice, and
allowing us access to and use of software
source material.
(b) you must give us any assistance we reasonably
require to pursue at our expense any right of
recovery in your name following a payment
under this insurance.
We will not make any payment under this insurance
unless you comply with these obligations.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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GENERAL MATTERS
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Definitions Phrases which appear both in this insurance and the Schedule,
which is part of this insurance, are in bold and have the
meaning which is given to them in the Schedule. Any headings
are given for ease of identification only. The following words
have a special meaning:
aggregate limit means the most we will pay in any one policy
period.
claim means any demand received by you for monetary or
injunctive relief including the service of suit or institution
of arbitration proceedings against you. Two or more claims
arising from a single or related series of actual or alleged
acts, errors or omissions will be considered a single claim
for the purposes of this policy, irrespective of the number of
claimants. Further, all such multiple claims shall be deemed
to have been made at the time of the initial claim. Claim also
includes any loss covered by Your Own Losses section of the
policy.
covered subpoena means a subpoena seeking documents, testimony
or information from the Insured but only if the documents,
testimony or information arises out of the performance of your
business activities.
damages means any monetary judgment, award, or settlement
including an award of attorneys' fees. It does not mean
punitive, multiplied, or other exemplary type damages.
excess means any amounts not covered by this insurance or any
other insurance available to you.
insured means your partners, directors and employees but only
when acting solely in these capacities while conducting your
business activities.
hazardous properties means radioactive, toxic or explosive
properties.
nuclear material means source material, special nuclear
material, by-product material, or spent fuel. "Source
material," "special nuclear material", "by-product material"
have the meaning given them by the Atomic Energy Act of 1954
and any amendments thereto.
nuclear facility means any nuclear reactor, any equipment or
device designed or used for 1) separating isotopes of uranium
of plutonium; 2) processing or utilizing spent fuel, or 3)
handling, processing or packaging waste. waste means any
material containing 1) containing by-product material and 2)
resulting from the operation of any nuclear facility.
pollutants means any noise, solid, semi-solid, liquid, gaseous
or thermal irritant or contaminant, including smoke, vapor,
soot, fumes, acids, alkalis, chemicals, biological and other
etiologic agents or materials, electromagnetic or ionizing
radiation and energy, genetically engineered materials,
teratogenic, carcinogenic and mutagenic materials, waste and
any other irritant or contaminant. Waste includes materials
that must be disposed of, recycled, reconditioned or
reclaimed.
spent fuel means any fuel element or fuel component, solid or
liquid, which has been used or exposed to radiation in a
nuclear facility.
policy period means the period during which you have coverage
under this policy.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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property means money, securities, uncertificated securities of
any Federal Reserve Bank of the United States, negotiable
instruments, certificates of deposit, documents of title,
acceptances, evidences of debt, security agreements,
certificates of origin or title, letters of credit, insurance
policies, abstracts of title, deeds, mortgages on real estate,
books of account and other records whether recorded in writing
or electronically, gems, jewelry, precious metals in bars or
ingots, and tangible items of personal property which are not
listed.
your business activities means the furnishing of professional
advice in relation to the promise to honour the online return
of goods policy of a merchant to a consumer because the
merchant was unable to honour the return of goods policy.
It does not include attempts to correct, fix, avert or
minimise any millennium or Year 2000 failures or the inability
of any computer, electronic device, component, system,
embedded programming or software to properly recognize or
compute any date as more fully set out in Exclusion 1 of WHAT
IS NOT COVERED.
We/Us/Our Hiscox Syndicates Ltd, 1 Great St
Helen's, London, EC3A 6HX (telephone
0171 448 6000).
You/Your (a) The Insured in the
Schedule which includes any
person who was, is or,
during the period of
insurance, becomes your
partner or director or
senior manager in actual
control of your operations.
(b) Any person who takes legal
control of your business or
affairs on your insolvency,
financial difficulties,
death or incapacity.
Choice of law This insurance, including its construction,
application and validity, is governed by the laws of
Canada
Service of Suit In the event, you believe Underwriters have
wrongfully declined your claim or failed to
pay you and you decide to sue us, we agree to
submit to a court of competent jurisdiction
within Canada Our agreement, however, does
not mean we agree to waive any rights or
defense we may have. In fact, we reserve any
rights we may have including but not limited
to, our right to bring suit against you in
any court or to remove your action to a
Canadian District Court.
If you do decide to sue us we appoint the
person named in Item 7 of the Declarations
page to accept service of process on our
behalf and to make any appearances on
Underwriters' behalf necessary to protect the
rights and interests of the Underwriters
Cancellation The insurance will be cancelled
- if you or we give the other 60days' written
notice, automatically effective on receipt
- automatically on the date of your or our
insolvency or filing of insolvency
We will return a pro-rata amount of premium unless we
have accepted a notification before the cancellation
takes effect.
Other Insurance If you have other insurance, which would pay for the
loss you are claiming under this policy, you
need to first make a claim under and collect,
if you can, under that policy. Provided you
meet the other requirements of this policy,
we will then pay, subject to the limits of
your policy, any excess amount not covered by
your other insurance.
[LETTERHEAD OF HISCOX TECHNOLOGY]
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DECLARATIONS
Please read this page carefully. It is important to you and is part of your
PROFESSIONAL INDEMNITY
CYBER INSURANCE POLICY
This Policy is Lead by Hiscox Syndicates Limited, 1 Great St Helen's, London
EC3A 6HX, England at Lloyd's of London, England.
Item 1. :NAMED INSURED
Your Name:
Your Address:
Item 2. :POLICY PERIOD
This Insurance is effective from DD/MM/YR to DD/MM/YR 12:01
AM Standard Time for Your Address listed above.
Item 3. :LIMITS OF LIABILITY
Aggregate Limit: The most we will pay during any one Policy
Period is $10,000,000
These Limits of Liability include and apply to any amounts
paid under the policy section entitled WHAT WE WILL PAY.
Item 4. :DEDUCTIBLE
$2,000,000 in all for the period
Item 5. :GROSS PREMIUM
You have paid $250,000 in gross premium for the Policy
Period listed in Item 2.
Item 6. :RETROACTIVE DATE
We will accept claims that were caused by wrongful or
negligent acts taking place before inception of cover
Item 7. :NOTICE OF CLAIM & UNDERWRITERS' REPRESENTATIVE
Please send your notification of any claim to: TBA
Underwriters
[LETTERHEAD OF HISCOX TECHNOLOGY]
