P R O D U C E R G U I D E

P R O D U C E R G U I D E

This program is intended to target Contractors, Agricultural, Horticulture, and Food Services business segments.

Effective: 9.16.08

Offered and Underwritten Through:

Arrowhead General Insurance Agency, Inc.

2365 Northside Drive, Suite 450, San Diego, CA 92108 Tel: 866.401.2111 | Fax: 866.650.2747

Carrier:

Everest National Insurance Company

Rated A+, XV

Claims Administration:

American Claims Management

Workers’ Compensation Claims Reporting: 866.671.5042 | www.acmclaims.com

Medical Provider Network:

General Information

Arrowhead General Insurance Agency, Inc. (AGIA) has designed this program to meet the insurance needs for the workers’ compensation industry in California. This manual is designed to give basic information to the producer to determine risk eligibility in this program. This is not a rating or a quoting tool, but is a reference to attract the better than average risk. All completed submissions must be sent to Arrowhead for evaluation and pricing.

ELIGIBILITY

In order to qualify for consideration into the program, a prospective risk must meet the following criteria:

California only exposures. Non-California clerical/sales exposures are permitted in states of Arizona, Nevada, Oregon and Utah but any such payroll is limited to 10% of overall policy payroll (exceptions can be considered on a referral basis).

Any business with physical locations and payroll written outside of California is subject to referral to Everest.

 Average to above average risk in its class.

 Exhibit support of employee welfare and safety, typically reflected in characteristics such as:

1. Employer supported employee benefit programs 2. Average or higher wage level

3. Timely reporting of workplace injuries, and commitment to accident investigation 4. Preferred medical provider channeling and early return to work options

5. Willingness to improve safety within its work environment by implementing safety and loss control programs recommended by PA.

Documents required prior to binding:

Item

Completed and Executed ACORD application

For accounts exceeding $15,000 in premium—recently valued (Within 120 Days) loss history and/or experience mod worksheet covering the current year plus the three (3) preceding years.

For accounts with less than $15,000 in premium: an officer/owner signed “Report of Claims Experience” letter for the experience period covering the current year plus the two (2) preceding years.

Supplemental questionnaires as indicated by AGIA rules

Documentation supporting that the corporate entity type and officers had been qualified as to be included or excluded from workers compensation coverage. AGIA procedure uses the signed ACORD application to

document the inclusion or exclusion. If the application is incomplete, AGIA quotes subject to receipt of additional information and documentation.

ELIGIBILITY:

ALL RISKS THAT HAVE INCIDENTAL EXPOSURES (defined as 10% or less of the total payroll) TO INELIGIBLE CLASSES FOR THE PROGRAM MUST BE REFERRED TO EVEREST NATIONAL FOR CONSIDERATION.

In general we should target risks with management that will respond positively to loss control and managed care requirements. Risks should have low turnover, skilled workers with a wage base that makes workers compensation indemnity income unattractive. Risks that present the following exposures may be excluded:

1. Substantial part-time employment other than industries where typical such as restaurants and retail stores. (defined as > 15% of total payroll)

2. Substantial employee turnover other than industries where typical such as restaurants and retail stores. (defined as > 25% during the last 12 months)

3. 24-hour operations other than manufacturing risk operating 3 shifts, hotel, motel, telecommunications or broadcasting.

4. Substantial “over the road” exposure defined as: a. With greater than 20 drivers

b. Traveling more than 50 miles daily

5. Increased exposure to occupational disease. Most of these risks fall into Hazard Group IV, which are already excluded from the program.

6. Risks where the prior carrier has become insolvent and cumulative trauma (CT) injuries are identified in the loss history. New business risks that have potential for CT claims but occurrences of CT claims are not evident in prior terms must be reviewed with the underwriting manager before quoting. Renewal accounts can be reviewed on a case-by-case basis. Exceptions should be referred to Everest National prior to releasing a quote.

7. Business history of less than one year with the following documented exceptions:

a. An existing business (3 years or more) has been purchased by new owner and existing management remains in place and the operation does/did not undergo significant change. Post survey required.

b. Expansion of a corporate entity from another state. Loss information and pre-survey required.

c. New management has extensive experience in same industry. Management resumes, resurvey and financial information required

d. New Ventures subject to a surcharge during the first three years. A New Venture is defined as a risk which is a) commencing to do business for the first time, or b) a business, though in existence, is hiring its first employee. Everest would require a) that owners, partners and/or corporate officers must be excluded, b) that a business in existence for some time with employees without carrying workers compensation insurance for any period of time prior to the date of inception will be ineligible, and c) documented evidence of financial viability in the underwriting file.)

8. Minimum account size is estimated standard annual premium of $1,000 and minimum of one full time employee in the governing class code other than owners/officers.

9. Policy Term -- Policies may be issued for a maximum one-year term only. No extensions beyond original expiration date are permitted.

10. Cancellation and Non-Renewals will be issued in accordance with the appropriate state law.

11. Risks having been canceled or non-renewed for underwriting reasons in the two years prior to inception should be referred to carrier. If there has been any lapse in coverage in the most recent three years, the risk will be essentially treated as new business.

12. Risks having been canceled for non-payment of premium in the twelve months prior to the inception are acceptable only at the underwriter’s discretion and upon terms there stated. The underwriters reserve the right to evaluate the credit of any risk and to reject the risk or modify payment terms based on its sole evaluation.

Note: Final authority on all risk eligibility rests with the issuing carrier. Guidelines are subject to change without advance notice. Excluded Operations or Conditions

Many types of operations are not specifically included or excluded in the Class Code Exhibits. The operations listed below may apply to more than one industry or class code. Accounts must be referred where one (1) or more of the operations or conditions listed below are present:

 Any risk with 0 employees

 Any vat storage tank or vessel cleaning and maintenance

 Any risk transporting employees in truck beds – Employees transported in quad-cab style pick-up trucks excepted provided seatbelts are available to each passenger.

 Any risk with height exposures in excess of 24 feet  Any risk digging or trenching depth greater the 4 feet

 Any risk with greater than 10% of work performed is exterior framing  Ammunition or explosives manufacturing or distribution.

 Asbestos exposures—handling, manufacturing or abatement, past or present  Any risk providing housing to more than 10% of employees

 Alarm Installation, Service or Repair

 Automatic Sprinkler Installation/Fire Suppression  Fire Suppression Contractors

 Applicant sponsors athletic teams where employees participate.

 Applicant has any exposure to owned, operated, leased or borrowed aircraft owned by insured or any executive officer, partner or owner.

 Aircraft flight operations or any business in the manufacturing or servicing of aircraft.  Applicant engages in blasting of any kind.

 Applicant has watercraft in excess of 26 feet owned, operated, leased or borrowed by insured or any executive officer, partner or owner.

 Boat, vessel or ship building or repair; work on docks, wharves, barges or otherwise over water.

 Marinas or boat livery operations.

 Interchange of employee labor between two or more employers.  Carnivals, circuses, amusement parks or devices.

 Chemical manufacturing, mixing or blending.

 Building demolition, wrecking, moving, shoring or underpinning.

 Tunneling, cofferdam, caisson work, dam, dike, lock or revetment construction.  Any non-US exposures.

 Applicant stores, transports, discharges or applies any radioactive or nuclear materials.  Applicants that have been declined or non-renewed by the current or prior carrier due

to poor, unsafe or dangerous premises or operations.

 Construction or manufacturing risk involving serious, unresolved, OSHA violations in the past three years, if AGIA has constructive knowledge of the violations.

 Any risk which either leases employees to or from another entity or firm.

 Temporary employment agencies, employee leasing, professional employment organizations or volunteer labor.

 Employee leasing, employment agencies (temporary or permanent), and PEO’s. AGIA is permitted to write an account coming out of a PEO if the loss experience is tied to the individual account and the loss information is credible.

 Oil or Gas Production, drilling, transportation, storage or distribution, including pipeline work.

 Railroad construction or operations.

 Security or guard services, armed or unarmed unless on an incidental basis as part of the insured’s operations. For instance, Everest would permit AGIA to write a bank which hires guards for the bank lobby.

 Slaughterhouses.

 Sports teams, professional or amateur.  Transportation of hazardous materials.

 Tunneling, cofferdam, caisson work, dam, dike, lock or revetment construction  Use of diacetyl (butter substitute food flavoring) or acetaldehyde.

EXCLUDED COVERAGE/ENDORSEMENTS:

AGIA is not permitted to quote, bind or issue any risk outlined in the excluded coverage/endorsements listed below:

 Acetylene Gas Mfg.

 Aircraft Coverage Endorsements  All Vessels Including NOC

 Amusement Park/Carnival/Circus  Asbestos Exposures

 Boat Livery

 Blasting Operations  Boiler Scaling

 Caisson, Dam, Dike, Lock, Revetment Work  Carbonic Acid

 Chemical and Dyestuff Rating Plan

 Chimney Construction or Smoke Stack Lining

 Civilian Employees of Non-Appropriated Fund Instrumentalities Act  Cofferdam Work

 Concrete Construction with Bridges and Culverts  Crop Dusting

 Diving  Dredging

 Defense Base Act Coverage  Electric Utilities

 Employee Leasing/Temporary Services

 Coverage to pay defense expenses in any suit for serious and willful misconduct brought against an employer or his agent.

 Explosive or Ammunition Mfg.

 Federal Employers Liability Act or F.E.L.A. Exposures  Federal Coal Mine Health & Safety Act Coverage  Federal Employers Liability Act Coverage

 Federal Work Comp & Employers Liability Law  Fireworks Manufacturing

 Hazardous Waste Haulers  Hone or Oil Stone Mfg.  Iron or Steel Erection  Jones Act

 Long Shore & Harbors Workers Act Coverage (USL&H )  Marine Railway Operations

 Marine Salvage Operations  Marine Wrecking

 Maritime Coverage Endorsement  Mining Operations

 Non Appropriated Fund Instrumentality’s Act Coverage  Nuclear Risk

 Ocean Marine  Offshore Exposures  Oil/Gas Well Exposures

 Outer Continental Shelf Act Coverage

 Participation in any Insolvency Pool unless required by law or regulation  Pile Driving

 Professional Sports Teams  Quarries

 Railroad Operations or Construction  Rocket Missile Testing or Launching  Slate Miller or Splitting

 Soapstone Products Mfg.  Stevedoring

 Subway Construction or Shaft Sinking  Tank Erection or Repair

 Tunneling

 Use of diacetyl (butter substitute food flavoring) or acetaldehyde.  War Risk



Classifications

The Classification that most accurately describes the Insured’s operations is to be used. In the case of multiple operations, the classification for each operation will be used. Only those

governing classes listed qualify. A “governing class” is determined by the largest payroll amount assigned. Risks with incidental exposures from classifications not on the eligible list may be considered upon underwriter review.

Class

Code Class Code Description

NCCI Hazard Grade 0005 Nurseries - propagation and cultivation of nursery 2

0016 Orchards - citrus and deciduous fruits 2

0034 Poultry raising, Egg production and hatcheries 2

0034 Sheep raising and Hog Farms 2

0035 Florists - cultivating or gardening 2

0038 Feed yards 2

Class

Code Class Code Description

NCCI Hazard Grade 0038 Stock farms 2 0040 Vineyards 2 0041 Potato Crops 2 0042 Landscape gardening 2 0044 Cotton Farms 2 0045 Orchards-nut crops 2

0050 Farm Machinery operation 2

0079 Strawberry Crops 3

0079 Bush Berry Crops 3

0106 Tree Pruning, repairing or trimming 3

0171 Field crop 2

0172 Truck farms 2

0251 Irrigation works operation 2

0400 Cotton Merchants-incl. cotton compressing 3

0400 Warehouses-cotton-incl. cotton compressing 3

0401 Cotton gin operation 3

2002 Macaroni Mfg 2

2003 Bakeries and Cracker Mfg 3

2014 Grain or rice milling 3

2014 Feed Mfg 3

2030 Sugar Mfg or refining - beet or cane - including beet dumps 3

2063 Creameries and Dairy products Mfg 2

2081 Butchering incl. the handling of livestock 2

2081 Stockyards with or without butchering 2

2095 Meat products Mfg - NOC including canning 2

2102 Fruit or vegetable evaporation or dehydrating 2

2106 Olive handling - sorting, curing, packing and canning - incl. olive oil Mfg 2

2106 Pickle Mfg 2

2107 Fruit - fresh fruit packing and handling incl. storage 2 2108 Fruit - citrus fruit packing and handling incl. storage 2

2109 Fruit - dried fruit packing and handling 2

2111 Canneries - NOC including fruit preserving 2

2113 Canneries - Fish 2

2116 Fruit juice or concentrate Mfg 2

2117 Vegetable or Fruit processors - frozen 2

2121 Breweries or Malt houses - incl. bottling 2

2142 Wineries - all operations 2

2142 Distilling - NOC 2

2142 Vinegar Mfg 2

2150 Ice Mfg or Ice dealers 2

2163 Bottling beverages, no spirituous liquors 2

2702 Logging or lumbering 3

2710 Sawmills or shingle mills 3

5020 Ceiling installation-suspended acoustical grid type 3

Class

Code Class Code Description

NCCI Hazard Grade

5027 Masonry-less than $23 per hour 3

5028 Masonry-equals or exceeds $23 per hour 3

5040 Iron or steel erection-structural and exterior installation 4

5040 Bridge building-metal 4

5040 Painting-steel structures or bridges 4

5057 Iron or steel erection-NOC 4

5059 Iron or steel erection-structural 4

5102 Iron, steel, brass, bronze or aluminum erection - non structural 3

5102 Floor installation-elevated 3

5107 Door or pre-glazed window installation 3

5108 Door installation-overhead doors 3

5128 Instrument-professional or scientific 3

5140 Electrical wiring - equals or exceeds $27 per hour 3

5146 Cabinet or fixtures - installation 3

5146 Sign installation or repair-interior 3

5160 Elevator erection or repair 4

5183 Plumbing - less than $24 per hour 3

5183 Refrigeration equipment - less than $24 per hour 3

5184 Steam pipe or boiler insulation 3

5185 Automatic sprinkler instll - less than $26 per hour 3 5186 Automatic sprinkler instll - equals or exceeds $26 per hr 3

5187 Plumbing-equals or exceeds $24 per hour 3

5187 Refrigeration equipment - equals or exceeds $24 per hr 3

5190 Electrical wiring-less than $27 per hour 3

5191 Office machine installation 2

5191 Computer or computer system installation 2

5191 Telephone or telephone system installation 3

5192 Vending or coin operated machines 2

5195 Communications cabling-within buildings-shop and Outside 2 5201 Concrete or cement-sidewalks less than $23 per hour 2 5205 Concrete or cement-sidewalks equals or exceeds $23 per hour 2

5212 Concrete pumping - all operations 3

5213 Concrete construction - NOC 3

5214 Concrete or cement work - precast concrete walls 3

5225 Reinforcing steel installation 3

5348 Tile, stone, mosaic or terrazzo work 3

5403 Carpentry - less than $25 per hour 3

5432 Carpentry - equals or exceeds $25 per hour 3

5436 Hardwood floor laying-including finishing 3

5443 Lathing 2

5446 Wallboard application-less than $25 per hour 3

5447 Wallboard application-equals or exceeds $25 per hour 3 5467 Glaziers-less than $25 per hour

Class

Code Class Code Description

NCCI Hazard Grade

5467 Glaziers-less than $25 per hour 3

5470 Glaziers-equals or exceeds $25 per hour 3

5474 Painting-less than $23 per hour 3

5474 Waterproofing-less than $23 per hour 3

5474 Painting-oil or gas storage tanks-less than $23 per hour 3

5479 Insulation Work 3

5482 Painting-equals or exceeds $23 per hour 3

5482 Waterproofing-equals or exceeds $23 per hour 3

5482 Painting-oil or gas storage tanks-equals or exceeds $23 per hr 3 5484 Plastering or stucco work-less than $24 per hour 3 5485 Plastering or stucco work-equals or exceeds $24 per hour 3

5506 Street or road construction-paving 3

5507 Street or road construction grading 3

5538 Sheet metal work-less than $24 per hour 3

5538 Sheet metal work-less than $24 per hour 3

5542 Sheet metal work-equals or exceeds $24 per hour 3

5606 Contractors-executive supervisors 3

5630 Steel framing light gauge-residential-less than $25 per hour 4 5631 Steel framing light gauge-residential-equals or exceeds $25 per hour 4 5632 Steel framing light gauge-commercial-less than $25 per hour 4 5633 Steel framing light gauge-commercial equals or exceeds$25 per hour 4 5645 Carpentry detached private residence 1 or 2 families less than $25 per hour 3 5645 Carpentry dwelling not exceeding 3 stories-less than $25 per hour 3

5650 Termite control work 2

5697 Carpentry detached private residence 1 or 2 families less than $25 per hour 3 5697 Carpentry dwelling not exceeding 3 stories-equals or 3

6204 Drilling - NOC 4

6204 Drilling-NOC 3

6218 Excavation less than $25 per hour 3

6218 Grading land less than $25 per hour 3

6218 Land leveling -farm land less than $25 per hour 3

6220 Excavation equals or exceeds $25 per hour 3

6220 Grading land equals or exceeds $25 per hour 3

6220 Land leveling-farm land-equals or exceeds $25 per hour 3

6258 Foundation preparation work 4

6307 Sewer construction less than $25 per hour 3

6308 Sewer construction equals or exceeds $25 per hour 3 6315 Water mains construction less than $25 per hour 3

6315 Gas mains construction less than $25 per hour 3

6316 Water mains construction-equals or exceeds $25 per hour 3 6316 Gas mains construction equals or exceeds $25 per hour 3

6325 Conduit construction 2

6364 Irrigation pipe installation-agricultural-all operations 2

Class

Code Class Code Description

NCCI Hazard Grade

6504 Confections and food sundries Mfg 3

7601 Telephone, telegraph or fire alarm line construction 3 7605 Burglar and security alarm systems installation 2

7606 Cable television companies 2

8102 Seed merchants incl. operation of seed sorting 2

8107 Machinery dealers 3

8117 Stores - feed, tack and farm supplies - retail 2 8209 Vegetables - fresh vegetable and tomato packing and handling 2

8215 Hay, grain or feed dealers 3

8215 Warehouses - grain or bean 3

8227 Construction or erection permanent yards 3

8227 Construction or erection permanent yards 4

8286 Livestock dealers or commission merchants 2

8286 Livestock auctioneers 2

8290 Warehouses - self storage 3

8291 Warehouses - cold storage 2

8292 Warehouses - general merchandise - NOC 2

9008 Janitorial services - by contractors employees 3 9079 Restaurants or Taverns - all employees - incl. musicians and entertainers 2

9079 Vending concessionaires 2

9096 Residential cleaning services by contractors 2

9097 Swimming pool cleaning 2

9402 Sewer or tank cleaning - NOC 3

9403 Garbage, ashes or refuse collecting 3

9403 Street sweeping service companies 3

9424 Garbage, ashes or refuse dump operations-all employees 3

9426 Sanitary companies 3

9516 Television and radio Equipment installation 3

9519 Household appliances-electrical installation 3

9519 Water softening or conditioning 3

9521 House furnishing - NOC installation incl. upholstering 3

9521 Floor covering-installation 3

9521 Window covering installation within buildings 3

9522 Upholstering 2

9522 Upholstering 2

9522 Furniture-upholstering 2

9522 Automobile body upholstering 2

9522 Coffin or casket upholstery work 2

9522 Wheelchair upholstering 2

9529 Scaffolds, shoring, cement distributing towers 4

Forms

Policy and endorsement forms are carrier filed and approved by the California Dept. of Insurance in compliance with all insurance codes and the WCIRB.

Eligible States

California. Please contact your underwriter on accounts with incidental exposures in states other than California.

Policy Term

All policies are issued as guaranteed cost for a 12-month term. Short-term policies may be available to coincide with a Normal Anniversary Date or as an accommodation to replace business midterm. Retrospective or Deductible programs are not currently available.

New Business & Renewal Submission Requirements

Completed new business and renewal submissions must include: • Signed Acord 130 application

• Arrowhead supplemental application. Supplemental application must be signed by insured.

• Experience Mod worksheets (if available or applicable)

• Minimum four (4) years, preferably five (5) years summary company loss runs currently valued within 90 days of the effective date. Please include detailed loss information on individual claims with incurred amounts over $100,000.

Binding of Coverage

AGIA will retain full binding authority. Producers authorized to market this program do not have binding authority. The producer may request to bind coverage upon receiving a written certified quotation. No verbal representations by any employee of AGIA are valid. No backdating is permitted.

The producer is responsible for collection of the down payment amount as stipulated on the quotation for new business and renewals. A copy of the deposit check or confirmation of check by fax/email must accompany the binding request. The down payment must be received within 5 business days after the date the request to bind was made or prior to the inception date of coverage if there is enough lead-time. If the down payment is not received within this

timeframe, a Rescinding Bind Notice will be issued and the risk will not be re-bound without the underwriter approval.

Please note that upon binding coverage all down payment checks must be made payable to Everest National Insurance Company.

NOTE: If rescinded, no contract of insurance will be recognized, as the insured is deemed unable to perform and consummate the contract.

Certificates of Insurance

Certificates may be issued by the producer on ACORD certificate forms only with a copy to be forwarded to AGIA for approval. Please do not strike any wording from the approved ACORD certificate form as it will be rejected. Dept. of Motor Vehicle filings will be generated by AGIA.

Waiver of Subrogation

Subrogation entitles an insurance company to recover the amount due an insured from a third party who caused the loss. When these rights are waived the Company gives up this opportunity. Because the right of subrogation is important, we want to protect that right, however, we recognize that there are instances where contracts require the Insured to waive their subrogation rights as a condition of the contract award.

• Certificates Of Insurance that include request for waiver of subrogation will need to include the following information:

• Length of Job, start to finish, if applicable • Detailed description of work being performed

• Detailed description of Job Name/Job Number/Contract Number, Job Location, etc. • Name and address of party requesting the Waiver Of Subrogation

• Class codes applicable to the job, class descriptions and applicable payroll. Be sure that payroll is consistent with the description of job, insured’s operation and size of risk respectively.

All Waiver of Subrogation endorsements are subject to the following charges:

For the purpose of this rule, Classification premium is defined to be the Premium developed by applying manual rates to the payroll by classification; Classification premium does not include the impact of experience rating or any other adjustments.

A. SPECIFIC WAIVER

The premium for a specific waiver is 5% of the classification premium associated with each specified contract or project within a policy, Minimum premium per specific waiver is $100, B. BLANKET WAIVER

The premium for a blanket waiver is 2% of the total classification premium. Minimum premium per policy is $350.

The premium for the Waiver of Subrogation is subject to the same experience rating, premium discount and other adjustments as the classification premium.

Rates

Rates quoted and issued will be in accordance with the issuing company’s rate filing. Other modifiers may apply that will deviate the company’s base rate. Contact your underwriter for further details.

Commissions

As quoted by the underwriter. Cancellations

Short Rate Cancellation: The policy is cancelled short rate when cancellation is at the Insured’s request.

If a policy is canceled, final premium will be determined in the following way unless our manuals provide otherwise:

If we cancel for reasons other than non-payment of premium, final premium will be calculated pro rata based on the time this policy was in force. Final premium will not be less than the pro rata share of the minimum premium.

If you cancel, or if we cancel due to non-payment of premium, final premium will be more than pro rata; it will be based on the time this policy was in force, and increased by our short-rate cancelation table and procedure. Final premium will not be less than the minimum premium.

Reinstatements & Rescissions

A policy that has had three cancellation notices sent for payment of premiums and/or non-reporting of payroll will not be reinstated.

Reinstatements and rescissions may be allowed pursuant to the following guidelines and conditions, subject for approval by the underwriter:

• Money is received bringing the account current • Frequency of Cancellations (3 or less)

Premium Accounting

All payments will be applied in the following order: 1. Past due premium on inactive policies

2. Past due fees, surcharges, taxes on inactive policies 3. Past due premium on active policies

4. Current charges

*Please note that alternative payment instructions included with the check will not be honored.

Experience Modifications and Normal Anniversary Rating

If the risk has an established experience modification factor, it will be applied. If the effective date of a policy is different than their normal anniversary date, Company and/or Bureau rules will apply concerning rates and the experience mod.

Customer Service

Arrowhead has dedicated Customer Service Representatives, staffed from 8:00 a.m. to 5:00 p.m. Monday through Friday. They are available to answer questions for producers and customers on a wide range of operational units including Premium Accounting, Claims, Audit and Operations, etc. To utilize this customer service option, please call our main phone line at (866) 671-5046 and follow the appropriate menu options.

Final Audit Overview

Every insurance policy that cancels mid-term or expires must have a final audit conducted, reconciling actual payrolls/exposure to the estimated amounts used on the policy when incepted. The results will determine if the premium paid by the Insured over the policy period is in excess or additional pay is needed.

Procedure

The following guidelines determine what type of audit is to be conducted pursuant to the premium size of the account:

• Estimated Annual Premium (EAP) between $0 and $9,999 are subject to a mail-in voluntary audit to be completed by the Insured.

• EAP of $10,000 and greater will be subject to a physical audit.

• Final Audits for expiring policies will be requested no less than 15 days prior to expiration. • Final audits for policies cancelled by request of the insured or by request of the carrier will

be ordered upon the effective date of cancellation.

• Final audits for policies cancelled for non-payment will be ordered 30 plus 5 days after the effective date of cancellation.

Final Audit Billing

Final audits with additional premiums will be due in 20 days. If the final audit additional premium is not paid within 25 days, a second notice will be sent with a due date of 10 days. If the

premium is not paid after the second request, a third and final notice will be sent with a due date of 10 days. Uncollectible accounts may be sent to Collections if the premium is not received by the 61st _{day from the original premium due date.}

Final Audit Disputes

When an audit is disputed by an Insured, the Premium Audit department is notified immediately. Premium Auditing will review and determine what part of the audit is being disputed, why it is being disputed, and the insured’s recommendations for resolving the dispute. If the audit is being partially disputed, the undisputed portion of the audit must be paid by the insured based on the above final audit billing time frames. If the audit is disputed over the accuracy of the figures, then copies of the records should accompany the dispute notification with clear

explanation. Disputes regarding classifications will need to be quantified by the insured. Disputes should include a detailed narrative outlining why they feel the classification is erroneous.

Owners/Officers of Company

o All owners/officers of the insured will be considered included for coverage unless specifically excluded by the application.

o All owner/officer information contained on the application will be considered factual. It will be the Producer’s and/or the Insured’s responsibility should an error or omission regarding owners/officers be found at final audit. There is some frustration

Inspections

Loss Control inspections are the key to determining improvement and success for a risk as well as identifying hazards that may exist which may eventually lead to the declination of a risk with Arrowhead. As previously mentioned in the eligibility section, the following is a guideline for submitted risks:

• Any account over $500,000 in premium may have a pre-audit inspection performed. It is the responsibility of the producer to provide a contact person at the insured.

• Any account over $150,000 in premium may have a post binding inspection or any need for an inspection as determined by underwriting.

• Telephone inspections may be conducted at any time on any account at the discretion of Arrowhead.

Payment Plans

Policies with California Only Exposure: Policy Written Premium

(before surcharges) Payment Plan Min Premium to $ 2,000 Annual

$ 2,001 to $ 3,000 40% Down + 2 Non-Monthly Installments (60/90) $ 3,001 to $ 7,500 15% Down + 3 Monthly Installments, or

15% Down + 6 Monthly Installments, or 15% Down + 3 Non-Monthly Installments Above $7,500

OR

Above $3,000

15% Down + 9 Monthly Installments 20% Down + 9 Monthly Installments

Policies with both California and Other States Exposure: Policy Written Premium

(before surcharges) Payment Plan Min Premium to $ 2,000 Annual

$ 2,001 to $ 3,000 40% Down + 2 Non-Monthly Installments (60/90) $ 3,001 to $ 7,500 25% Down + 3 Monthly Installments, or

25% Down + 6 Monthly Installments, or 25% Down + 3 Non-Monthly Installments Above $7,500

OR

Above $3,000

25% Down + 9 Monthly Installments 20% Down + 9 Monthly Installments

Payment Method:

AGIA will handle billing accounts on a Direct Bill basis. AGIA will be expected to maintain a positive equity in the uncollected premium at an account level.

Surcharges and Taxes

Non-premium surcharges and taxes are due in full with the down payment.

Sub-Contractors

When the Named Insured sub-contracts work, a certificate of insurance naming the named insured as the certificate holder must be provided or payroll for the sub-contractor will be charged as an employee at final audit.

Minimum Premium

The minimum premium is subject to Everest National’s filings and may vary depending on pricing tier.