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may be required or permitted to pay as indemnity
<br />to an Insured, for a claim or claims made against
<br />an Insured fora Wrongful Act and shall include but
<br />not be limited to damages, judgements, set-
<br />tlements and costs, cost of investigation and
<br />defense of legal actions (excluding salaries of
<br />officers or employees of the Public Entity, or any
<br />other governmental body) claims or proceedings
<br />and appeals therefrom, premiums on bonds to
<br />release attachments or similar bonds but without
<br />any obligation to apply for or furnish any such
<br />bonds, provided always, however, such subject of
<br />loss shall not include fines and penalties imposed
<br />by law and any amounts due or payable under the
<br />terms of any contractual obligation.
<br />(e) "Policy Year" shall mean the period of one year
<br />commencing on the effective date and hour of this
<br />policy or any anniversary thereof, or if the time
<br />between the effective date or any anniversary and
<br />the termination of the policy is less than one year,
<br />such lesser period.
<br />IV. Exclusions:
<br />(a) The Company shall not be liable to make any
<br />payment in connection with any claim made
<br />against the Insureds:
<br />(1) based upon or attributable to their gaining in
<br />fact any profit or advantage to which they were
<br />not legally entitled, including remuneration
<br />paid in violation of law as determined by
<br />the Courts;
<br />(2) brought about or contributed to by fraud or
<br />dishonesty of an Insured; however, not-
<br />withstanding the foregoing, the Insureds shall
<br />be protected under the terms of this policy as
<br />to any claims upon which suit may be brought
<br />against them by reason of any alleged fraud or
<br />dishonesty on the part of any insureds, unless
<br />a judgement or other final adjudication thereof
<br />adverse to such Insureds shall establish that
<br />acts of active or deliberate dishonesty or fraud
<br />committed by such Insureds was material to
<br />the cause of action so adjudicated;
<br />(3) which is insured by another valid policy or
<br />policies or which shall be deemed uninsurable
<br />under the law pursuant to which this policy
<br />shall be construed;
<br />(4) for any damages arising from bodily injury,
<br />sickness, mental anguish, disease or death of
<br />any person or for damage to or destruction of
<br />any tangible property including loss of use
<br />thereof;
<br />(5) for false arrest, libel, stander, defamation of
<br />character, invasion of privacy, wrongful
<br />eviction, assault or battery;
<br />(6) based upon or attributable to the rendering or
<br />failure to render any opinion, treatment,
<br />consultation or service if such opinion,
<br />treatment, consultation or service was ren-
<br />dered or failed to have been rendered while
<br />such Insureds were engaged in any activity for
<br />which they received compensation from any
<br />source other than the Public Entity named in
<br />Item A of the Declarations or were gratuitously
<br />engaged other than by specific direction of the
<br />Public Entity named in Item A of the
<br />Declarations;
<br />arising out of the discharge, dispersal, release
<br />or escape of smoke, vapors, soot, fumes,
<br />acids, alkalis, toxic chemicals, liquids or
<br />gases, waste materials or other irritants, con-
<br />taminants or pollutants into or upon land, the
<br />atmosphere or any watercourse or body of
<br />water; but this exclusion does not apply if
<br />(7)
<br />(8)
<br />such discharge, dispersal, release or escape ls`'
<br />sudden and accidental;
<br />for which the Insureds are entitled to in-
<br />demnity and /or payment by reason of having
<br />given notice of any circumstances which might
<br />give rise to a claim under any policy or policies
<br />the term of which has expired prior to ttr"'\
<br />inception date of this policy; ))
<br />(9) for any claims arising out of the Insured's
<br />acting in a fiduciary capacity or as trustee or in
<br />any similar capacity;
<br />(10) for any claim against any attorney, architect,
<br />engineer or accountant while acting in the
<br />scope of his professional duties;
<br />(11) for any damages arising from inverse con-
<br />demnation, adverse possession or dedication
<br />by adverse use.
<br />V. Limits of Liability:
<br />(a) The Company will be liable to pay each and every
<br />loss hereunder which shall include all costs,
<br />charges and expenses in excess of the deductible
<br />shown in Item D of the Declarations and up to the
<br />limits of liability as shown under Item C of the
<br />Declarations. The deductible set out in Item D of
<br />the Declarations shall remain uninsured. The
<br />Company may pay all or any part of the deductible
<br />amount to effect settlement of any claim or suit or
<br />to defend such claim or suit and upon notification
<br />of the action taken, the Insured shall promptly
<br />reimburse the Company for such amount of the
<br />deductible amount as has been paid by the
<br />Company.
<br />(b) Losses based on or arising out of the same act or
<br />interrelated acts of one or more of the Insureds
<br />shall be considered a single loss and only one
<br />deductible shall be applicable to such single_.,
<br />loss.
<br />(c) Subject to the foregoing, in no event shall
<br />Company's total limit of liability in any one policy
<br />year exceed the maximum annual aggregate stated
<br />in Item C of the Declarations. However, maximum
<br />liability in the last policy year shall not be in-
<br />creased for any discovery period.
<br />VI. Notice of Claim:
<br />(a) If during the policy period or the extended
<br />discovery period, the Public Entity or any Insureds
<br />shall receive written or oral notice from any party
<br />that it is the intention of such party to hold the
<br />Insureds responsible for a Wrongful Act, they shall
<br />give written notice to the Company of the receipt of
<br />such written notice or oral notice as soon as
<br />practicable, but in no event exceeding one year,
<br />then any claim which may subsequently be made
<br />against the Insureds arising out of such Wrongful
<br />Act shall, for the purpose of this policy be treated
<br />as a claim made during the policy year in which
<br />such notice was given or if given during the ex-
<br />tended discovery period, as a claim made during
<br />the last policy year.
<br />(b) The Public Entity or any Insureds, or the named
<br />designee shall, as a condition precedent to their
<br />rights under this policy, give the Company notice
<br />in writing as soon as practicable of any claim made
<br />and shall give the Company such information and
<br />cooperation as it may reasonably require.
<br />(c) For the purpose of the above clauses notice to t1y
<br />designee named under Item F of the Declaratiok_j
<br />shall constitute notice to the Public Entity or to
<br />any Insureds.
<br />(d) In the event of any claim occurring hereunder,
<br />notice to the Company shall be given to the person .
<br />or firms) shown under Item G of the Declarations.
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