Accounts Receivable

This is a reporting form:

It is a condition of this schedule that 45 days before the anniversary date of the insurance to which this schedule is attached, the insured shall submit a statement of monthly values to the company showing the total dollar amount recorded of accounts receivable at each specified premises as of the end of the 12 most recent fiscal months.

Records of accounts receivable are insured against all risks of direct physical loss or damage, unless otherwise excluded.

ADDITIONAL EXCLUSIONS

This Insurance does not cover any loss caused by or resulting from:

1.  war

2.  nuclear

3.  government action;

4.  alteration, falsification, manipulation, concealment, destruction or disposal of records of accounts receivable committed to conceal the wrongful giving, taking or obtaining or withholding of money, securities or other property but only to the exent of such wrongful giving, taking, obtaining or withholding;

5.  any fraudulent, dishonest or criminal act by any insured, or any partner, offcer, director or trustee thereof, whether acting alone or in collusion with others.

6.  Bookkeeping, accounting or billing errors or omissions.

HOW LOSS IS SETTLED

1.  the company shall be liable for the actual loss sustained by the insured resulting from inability to collect accounts receivable, including

a.  interest charges on any loan to offset impaired collection pending repayment of such sums made uncollectible by loss of or damage to records of accounts receivable;

b.  collection expenses in excess of normal collection cost which are made necessary by loss or damage to records of accounts receivable;

c.  other expenses, when reasonable incurred by the insured, in re-establishing records of accounts receivable following loss or damage.

2.  determination of receivable: When there is proof that a loss is covered by this insurance has occurred but the insured cannot accurately establish the amount of accounts receivable outstanding as the date of such loss, such amount shall be based on the insured’s latest statement of monthly receivable and shall be computed as follows:

a. determine the amount of all outstanding accounts receivable at the end of the same fiscal month in the year immediately preceding the year in which the loss occurs;

b. calculate the percentage of increase or decrease in the gross sales of goods and services by the insured for the 12 fiscal months immediately preceding the month in which the loss occurred against the 12 fiscal months prior to the above period;

c. the amount determined under (a) above, increased or decreased by the percentage calculated under (b) above, shall be in the agreed total amount of accounts receivable as of the last day of the fiscal months in which said loss occurs;

d. the monthly amount of accounts receivable thus es