I. Covered Risks and Exclusions under Home and Contents Insurance

The Insured is insured for loss or damage to his/her Home and Contents caused during the Insurance Coverage Period directly by any of the following insured events

(I) Fire or Explosion, but not loss or damage to any item caused by scorching, melting, or charring without flames;

(II) Storm (including cylclone or hurricane) and/or rain, which may be accompanied by snow, sleet or hail, but not loss or damage caused by:

(a) mildew, mould and other microorganisms ;

(b) atmospheric or climatic conditions other than storm;

(c) water entering the property through an opening made for the purpose of alterations, additions, renovations and repair;

(d) water seeping into the Home through a wall, ceiling, roof or floor;

(III) Lightning or thunderbolt, but not loss or damage caused by fluctuations in the power supply, unless there is evidence that the damage was caused by a direct lightning strike;

(IV) Earthquake, provided:

(a) all destruction or damage occurring within a period of 48 hours of the earthquake is regarded as the one insured event;

(b) the amount of the due indemnity shall be reduced with 3% of the sum insured of the Home and/or Contents;

(V) Flood (inundation of normally dry land by water from any watercourse, lake, canal, dam or reservoir), provided the amount of the due indemnity shall be reduced with 3% of the sum insured of the Home and/or Contents;

(VI) Theft of electronic appliances by forcible and violent means, but not more than Euro 1000 for one occurrence and in aggregate for one Insurance Coverage Period;

(VII) Malicious acts, but not loss or damage intentionally caused by the Insured, a member of the Insured's family, a direct or lateral relative of the Insured, a tenant of, or visitors of a tenant of, the Home, but not more than Euro 5000 for one occurrence and in aggregate for one Insurance Coverage Period;

(VIII)    Bursting or leaking of fixed pipes used to hold or carry liquid of any kind, but not loss or damage which occurs gradually over time, provided the Insurer shall not pay:

(a) for repair or replacement of the apparatus, tank or pipe itself;

(b) provided the amount of the due indemnity shall be reduced with 100 euro .

(IX) Impact by:

(a) a vehicle, an aircraft or a waterborne craft;

(b) space debris or debris from an aircraft, rocket or satellite;

(c) an animal;

(d) a falling tree or part of a tree;

(e) a mast or a television or radio aerial that has broken or collapsed;

but not loss or damage caused by:

(a) an animal kept in the Home;

(b) rodents, vermin, or moth.

II. Ways of Determining of the Due Indemnity under Home and Contents Insurance

The indemnity due by the Insurer for loss or damage to a Home and/or Contents shall be equal to:

(I) the amount of the reasonable expenses for repair of the Home to a condition substantially the same as the condition of the Home prior to the occurrence of the insured event, or the replacement value of the Home, as the Insurer may freely chose, but not to exceed the sum insured of the Home;

(II) the amount of the reasonable expenses for repair of the Contents to a condition substantially the same as the condition of the Contents prior to the occurrence of the insured event, or the replacement value of the Contents, as the Insurer may freely chose, but not to exceed the sum insured of the Contents; and

(III) the amount of the reasonable expenses for removal of debris up to 5% of the amount of the damage or loss to the Home and/or Contents, provided the aggregate of such indemnity and the indemnity payable under items (I) and (II) above may not exceed the aggregate of the Home's and Contents' sums insured.

In case of underinsurance of Contents, the Insurer shall pay indemnity on a “first loss” basis. This clause shall not apply in case of underinsurance of a Home.

III. Covered Risks and Exclusions under Lessor’s Liability Insurance

Subject to payment of additional insurance premium the Insured may be provided insurance coverage  against any claim for compensation or expenses which the Insured becomes legally liable to pay for the death of, or bodily injury to, any tenant of the Home owned by the Insured resulting from an occurrence during an Insurance Coverage Period in respect of the Home and arising out of the Insured being the owner of the Home and the Contents, provided the Insurer has been notified of the occurrence within the same Insurance Coverage Period.

The liability of the Insurer shall be limited to Euro 10,000 per occurrence and in aggregate for an Insurance Coverage Period.  In case of joint ownership of a Home the Insurer's limit of liability shall be distributed among the joint owners of the Home pro rata to their respective shares on the ownership of the Home.  The existence of joint ownership shall not lead to an increase of the Insurer's limit of liability.

The Insurer does not provide coverage for liability arising from:

(I) the actual or alleged use or presence of asbestos;

(II) any agreement, unless liability would have attached to the Insured if that agreement did not exist;

(III) death or bodily injury to the Insured, a husband or partner of the Insured, or a direct or collateral relative of the Insured;

(IV) death or bodily injury to anyone employed by the Insured or “Property Management”Ltd.;

(V) any workers compensation legislation;

(VI) the use of any Home for other than residential purposes;

(VII) vibration or the weakening of or interference with support to land, buildings or other property;

(VIII) building work, construction or demolition of a building, including the building comprising the Home;

(IX) the lawful seizure, confiscation, nationalisation or requisition of the Home;

(X) destruction of or damage to the Home by any government or public or local authority;

(XI) fines or other administrative penalties;

(XII) consequential loss.

Within the limit of liability the Insurer shall cover legal expenses of the Insured provided the amount of such expenses has been approved by the Insurer in writing prior to such expenses being made by the Insured, the lawsuit is conducted before a Bulgarian court and the subject of the lawsuit is a liability of the insured covered under the Insurance Agreement.  The liability of the Insurer under this article may not exceed 10% of the indemnity due by the Insurer in regards to the respective occurrence.  The insurance coverage for legal expenses is included in the limit of liability under the Lessor’s Liability Insurance and does not form an addition thereto.

The amount of indemnity due by the Insurer under Lessor’s Liability Insurance shall be determined on the basis of an out-of court settlement agreement approved by the Insurer or a final court decision issued by a Bulgarian court.  The Insurer shall not be liable for payment of any indemnity under the Lessor’s Liability Insurance in case the amount of such indemnity has been determined by a court decision issued by a non-Bulgarian court.

IV. Surveys and Instructions

The Insurer shall be entitled to conduct a survey of each Home.

The Insurer shall be entitled to issue written instructions in respect of the use and/or safekeeping of each Home.  In case of non-compliance with any such instructions the Insurer shall be entitled to reduce the amount of indemnity or refuse to pay any indemnity under any of the Home and Contents Insurance and the Lessor’s Liability Insurance, provided the occurrence of the insured event and/or the amount of damages is a consequence of the non-compliance with the instructions given by the Insurer.

V. Occurrence of an Insured Event. Settlement of Claims

If an event happens which may give rise to a claim for indemnification the Insured must:

(I) take all reasonable precautions to prevent further loss, damage or liability;

(II)    keep the Home and/or the Contents in the condition they have been immediately after the occurrence of the insured event (except for changes in result of actions taken for prevention of further loss, damage or liability) in order to allow the Insurer to conduct any necessary survey and investigation;

(III) notify the police if any property is lost, stolen, or maliciously or intentionally damaged;

(IV) notify the Insurer immediately but not later than 48 hours of becoming aware of the event;

(V) supply the Insurer with all information required by the Insurer to settle or defend the claim, including but not limited to:

(a) a copy of the Agreement for Management of an Apartment/Family Home entered into between the Insured and “Property Management”Ltd;

(b) documents evidencing the Insured's title to the Home;

(VI) notify the Insurer of any other insurance covering the same loss, damage or liability;

(VII) cooperate with the Insurer fully in any action the Insurer takes, if the Insurer has a right to recover any money payable under the Insurance Agreement from any other person.

6.2 If an event happens which may give rise to a claim, the Insured must not:

(I) authorise repairs to or arrange replacement of the Home or the Contents in connection with any claim without the consent of the Insurer, other than emergency repairs necessary to prevent further loss;

(II) admit liability or enter into any settlement agreement if an accident occurs which is likely to result in a claim being made against the Insured.

If the Insured does not take reasonable care to:

(I) protect and maintain the Home and/or the Contents;

(II) minimize the cost of any claim under the Insurance Agreement, or

(III) comply with all statutory obligations and by-laws or regulations relating to the safety of persons or property,

the Insurer may refuse to pay for any loss or damage to which this failure to take reasonable care contributes.

The Insurer shall be entitled to refuse to pay or to reduce the amount of a claim if:

(I) it is in any way fraudulent, or

(II) any fraudulent means or devices are used by the Insured or anyone acting on the Insured's behalf to obtain any benefits under the Insurance Agreement.

The use of any Home or contents for other than residential purposes is a "significant circumstance with a view to the covered risk" in the sense of art. 188 of the Bulgarian Insurance Code. If a Home and/or Contents is/are used for other than residential purposes and an insurance event has occurred as a consequence thereof, the Insurer shall be entitled to refuse to pay indemnity.

VI. General Exclusions

The Insurance Agreement does not provide coverage for any liability, loss, damage, cost or expense directly or indirectly caused by, contributed to by, resulting from, arising out of or in connection with any of the following, regardless of any other cause or event contributing concurrently or in any other sequence to the loss:

(I) the lawful seizure, confiscation, nationalisation or requisition of the property insured;

(II) destruction or damage to property by any government or public or local authority;

(III) the deliberate application of heat;

(IV) inherent defects, structural defects, faulty workmanship, faulty design, breach of, or non-compliance with, any mandatory technical standards or requirements, or any gradual process;

(v) wear, tear, rust, corrosion, depreciation or gradual deterioration;

(VI) mold, mildew, algae, fungus, spores or other micro-organism of any type, nature, or description, including but not limited to any substance whose presence poses an actual or potential threat to human health, provided this exclusion applies regardless whether there is

(a) any physical loss or damage to insured property;

(b) any insured peril or cause, whether or not contributing concurrently or in any sequence;

(c) any loss of use or of occupancy of insured property, or loss of functionality of  insured property;

(VII) settling, shrinkage or expansion in buildings, foundations or walls;

(VIII) the removal or weakening of supports or foundations for the purpose of alterations, additions, renovations or repair;

(IX) any consequential loss;

(X) any process of cleaning involving the use of chemicals;

(XI) rodents, vermin and moth;

(XII) erosion, subsidence, landslide or earth movement other than as a direct result of one of the following insured events :

(a) storm;

(b) earthquake;

(c) explosion;

and occurring no more than 72 hours after the event.

(XIII) the action of the sea, high water, tidal wave, tsunami;

(XIV) ionising radiations from or contamination by radioactivity from any nuclear fuel or from any nuclear waste or from the combustion of nuclear fuel;

(XV) the radioactive, toxic, explosive or other hazardous or contaminating properties of any nuclear installation, reactor or other nuclear assembly or nuclear component thereof;

(XVI) any weapon or device employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter;

(XVII) the radioactive, toxic, explosive, or other hazardous or contaminating properties of any radioactive matter, provided the exclusion in this clause does not extend to radioactive isotopes, other than nuclear fuel, when such isotopes are being prepared, carried, stored, or used for commercial, agricultural, medical, scientific or other similar peaceful porposes;

(XVIII) any chemical, biological, bio-chemical, or electromagnetic weapon;

(XIX) war, invasion, acts of foreign enemies, hostilities or warlike operations (whether war be declared or not), civil war;

(XX) mutiny, civil commotion assuming the proportions of or amounting to a popular rising, military rising, insurrection, rebellion, revolution, military, or usurped power;

(XXI) any act of terrorism or any action taken in controlling, preventing, suppressing or in any way relating to an act of terrorism, provided for the purpose of this clause an "act of terrorism" means an act, including but not limited to the use of force or violence and/or the threat thereof, of any person or group(s) of persons, whether acting alone or on behalf of or in connection with any organisation (s) or government(s), which from its nature or context is done for, or in connection with political, religious, ideological, ethnic or similar purposes including the intention to influence any government and/or to put the public, or any section of the public, in fear;

(XXII) any intentional act of the Insured.

VII. Exclusion “Damage to Electronic Data”

The Insurance Agreement does not provide coverage for any loss, damage, destruction, distortion, erasure, corruption or alteration of electronic data from any cause whatsoever (including but not limited to computer virus) or loss of use, reduction in functionality, cost, expense or whatsoever nature resulting therefrom, regardless of any other cause or event contributing concurrently or in any other sequence to this loss.

For the purpose of this clause:

"Electronic data" means facts, concepts and information converted to a form useable for communications, interpretation or processing by electronic and electromechanical data processing or electronically controlled equipment and includes programs, software and other coded instructions for the processing and manipulation of data or the direction and manipulation of such equipment;

"Computer virus" means a set of corrupting, harmful or otherwise unauthorized instructions or code, programmatic or otherwise, that propagate themselves through the computer system or network of whatsoever nature, which are self-multiplying, and are of nature to affect computer systems or computer data, to engulf computer resources, to change, destroy data or in other way to prevent the normal work of a computer, computer system or computer network.

However, in the event that a fire or an explosion results from any of the matters described above in this paragraph, the Insurance Agreement, subject to all its terms, conditions and exclusions, will cover physical damage occurring during the respective insurance coverage period to insured property caused by such fire or explosion.

Should electronic data processing media insured under the Insurance Agreement suffer physical loss or damage insured by the Insurance Agreement, then the basis of valuation shall be the cost of the blank media plus the cost of coping the electronic data from back – up or from originals of a previous generation. These costs will not include research and engineering nor any costs of recreating, gathering or assembling such electronic data. If the media is not repaired or restored the basis of valuation shall be the cost of the blank media. However the Insurance Agreement does not insure any amount pertaining to the value of such electronic data to the Insured or any other party, even if such electronic data cannot be recreated, gathered or assembled.

VIII. Notifications

All notifications and other correspondence between the parties must be in written form and be sent to the address of the respective party specified below, or to any other address which such party has notified to the other party in writing.

Sofia
Oborishte Region
26-28-30 Bacho Kiro Str.

IX. Dispute Resolution. Competent Court. Applicable Law.

The relations between the Parties and between the Insurer and any Insured in respect of the subject matter of the Insurance Agreement shall be settled solely on the basis of the provisions of the Insurance Agreement.  The Insurer's general conditions for property damage and liability insurance shall not apply in respect of the insurance cover provided hereunder.

Any issues which are not resolved in the Insurance Agreement shall be settled on the basis of the provisions of the applicable Bulgarian legislation.

All disputes and claims arising out of, or related to, the Insurance Agreement, which cannot be resolved through negotiations shall be resolved by the competent Sofia court, unless the dispute or claim should be settled by another Bulgarian court by operation of a mandatory statutory provision.

X. Definitions

“Villa” shall mean a solid detached or semidetached house

“Contents” shall mean all items which:

(I) belong to the Insured;

(II) are located in a Home; and

(III) are used for residential purposes,

except for the following:

(I) jewelry, objects made of precious metals, precious or semi-precious stones and works of art;

(II) cash, collections of any kind or collectibles, negotiables, financial transaction cards and documents;

(III) animals;

(IV) any plant life;

(v) any property:

(a) illegally in the possession of the Insured;

(b) stored in a dangerous or illegal way;

(c) any equipment connected with growing or creating any illegal substance;

(VI) commercial or retail trade stock;

(VII) property used in connection with a profession, trade or business, or otherwise for reward;

(VIII)    motor vehicles and bicycles;

(IX) items being cleaned, repaired, restored or located for any other reason away from the Home;

(X) items stored or installed in the open air (including terrace, or balcony).

“Insurer” shall mean QBE Insurance (Europe) Limited - Sofia Branch.

“Insurance Agreement” shall mean Insurance Agreement NoQ03600159., executed on 24.08.2006 between “Property Management” EOOD and QBE Insurance (Europe) Limited - Sofia Branch.

“Agreement for Management of an Apartment/Villa” shall mean an agreement entered into between “Property Management” EOOD and the Insured, whereby “Property Management”Ltd undertakes to carry out activities related to the safekeeping and management of the Home.

“Home” shall mean an apartment or a Villa which is:

(I) subject to an Agreement for Management of an Apartment/Villa;

(II) subject to an issued deed for establishing of the construction works' readiness for acceptance (attachment #15) in the sense of art. 7. para. 3, item 15 of Ordinance #3 on Issuing of Deeds and Protocols at the Time of Construction;

(III) used solely for residential purposes; and

(IV) not a building or a part of a building in the course of being constructed, reconstructed, demolished, or that is vacant pending any such activity;

excluding:

(I) any ideal parts, attics or basements pertaining or corresponding to apartments;

(II) outbuildings (not having the quality of a building), installation on the outside walls of buildings, swimming pools, tennis courts, spas, saunas, jetties and pontoons;

(III) improvements of the surrounding ground, pathways, driveways, retaining walls, fences, gates, plant life; and

(IV) any other items located or installed outside the building.