Australian Aviation Underwriting Pool
Proprietary Limited A.C.N. 004 489 810

Your Aviation Insurance Policy - Agricultural Chemical Liability

EDITION 1

Section 1: ABOUT THIS POLICY

1. YOUR RELATIONSHIP WITH US

We have authorised our Agent to enter into this Policy (which includes the Coverage Schedule and any endorsement(s)) with you on behalf of each of us and to do all things we are able to do under or in connection with this Policy. You have made to our Agent or there has been made to our Agent on your behalf a proposal which is incorporated into and forms part of this Policy. By this Policy we insure you in respect of certain risks involved in operating the aircraft in aerial spraying and spreading operations. Any claim made under this Policy or any proceedings commenced in relation to this Policy must be made to our commenced against our Agent. Our Agent has the power to make, in its own name, any demand or commence or defend any legal action arising out of or incidental to this Policy so that the demand or action shall be as good and effective as if made or commenced by or against each of us. Should any amount of money become payable to you under this Policy each of us has agreed to pay to you, your executors, administrators or assigns the portion of that amount calculated by reference to the percentage appearing beside each of our names in the Coverage Schedule and no more. None of us nor our Agent shall have to pay to you, your executors, administrators or assigns any moneys owing or owed by another of us whether the moneys are owed under this Policy or not.

2. WHAT YOU GET UNDER THIS POLICY

If you pay the agreed premium and observe the Essential Terms set out in Section 5 we agree to provide you with the insurance cover described in this Policy for the Policy period of cover and any other period for which this Policy is renewed. However, the total amount of our combined liability under this Policy is limited to the relevant amount or amounts stated in the Coverage Schedule under the heading "Limit of our Liability² less any deductible payable by you. Furthermore and importantly, under no circumstances will we pay any moneys under this Policy where your liability or the loss, damage or liability arose or occurred in any of the circumstances described in Section 4.

Section 2: DEFINITIONS

In this Policy:

WE, OUR, US
"We² or "Our² or "Us² refers to the insurance companies named on the first page of the Coverage Schedule.

YOU, YOUR
"You² or "Your² refers to the Assured(s) named in the Coverage Schedule.

OUR AGENT
"Our Agent² refers to Australian Aviation Underwriting Pool Proprietary Limited.

COVERAGE SCHEDULE
"Coverage Schedule² means the Schedule to this Policy which sets out details relevant to your insurance cover including the limits of our liability in respect of the risks for which this Policy covers you. Please read it.

AERIAL SPRAYING
"Aerial Spraying² means the spraying, spreading, dusting or dispersing of any agricultural chemical or preparation (whether in a solid or liquid form), fertilisers, seeds or baits from an aircraft in flight.

AGRICULTURAL CHEMICAL(S )
"Agricultural Chemical(s)² means any chemical prescribed or defined as an agricultural chemical or agricultural chemical preparation by or under any Aerial Spraying Control Acts, Agricultural and Veterinary Chemical Acts or any legislation of the Commonwealth or any State or Territory of Australia relating to the control of the spraying or distribution from the air of such chemicals and which it is lawful to apply from aircraft for agricultural purposes.

THE AIRCRAFT
"The Aircraft² means the aircraft (including helicopter(s)) identified in the Coverage Schedule.

FLIGHT
"Flight² starts at the moment when power is applied to the engine(s) of the aircraft for the purpose of taking off and ends when the aircraft starts to taxi under its own power after resuming contact with the ground or comes to rest.

ONE SPECIFIC AERIAL APPLICATION
"One specific aerial application² means one flight or a series of flights comprising one aerial spraying operation or job.

SPRAY DRIFT
"Spray drift² means the airborne movement of any agricultural chemical following discharge or dropping from an aircraft in the course of aerial spraying on to a site other than that intended to be treated.

TREATING/TREATE
D "Treating/Treated² means aerial spraying. PROPERTY "Property² includes livestock and other animals, birds, crops, pastures and trees.

OPERATIONAL LEGISLATION
"Operational Legislation² means all provisions in force from time to time of:
(a) the Air Navigation Act, Civil Aviation Act, Air Navigation Regulations, Civil Aviation Regulations, Air Navigation Orders, Civil Aviation Orders and regulations, orders, requirements, notices, directions, circulars and approvals issued by the Civil Aviation Authority, the Department of Transport or by any other competent authority; and/or
(b) Commonwealth, State and/or Territory legislation, regulations and orders relating to aerial spraying and/or application of agricultural chemicals from aircraft and applicable to the jurisdiction in which the aircraft is operating.

PASSENGER
"Passenger² means a person who is on board the aircraft (including a person in the process of embarking or disembarking) for the purpose of carriage but does not include a pilot in command.

AUSTRALIA
"Australia² means the Commonwealth of Australia but NOT including Australian Antarctic Territory, Macquarie Island, Territory of Heard Island and McDonald Islands or territorial waters adjacent thereto.

POLICY PERIOD OF COVER
"Policy Period of Cover² means the period so identified on the Coverage Schedule or any endorsement.

Section 3: YOUR AGRICULTURAL CHEMICAL LIABILITY COVER

1. We will pay, up to the relevant limit of our liability stated in the Coverage Schedule, such sums which you, or a pilot authorised by you who is within the class of pilots described in the Coverage Schedule or any employer of such a pilot who may be held legally liable for the pilot¹s acts or omissions, are legally liable to pay as compensation (excluding interest and costs awarded and punitive or exemplary damages) for
(a) accidental bodily injury (including death, illness or disease) of other persons; or
(b) accidental loss of or damage to the property of other persons which occurs during the Policy period of cover and is caused directly by aerial spraying by the aircraft or spray drift from the aircraft whilst it is being operated by you and flown by a pilot authorised by you.

2. If we make a payment under this Policy, we will also pay the amount of any interest and legal costs which are awarded. However, if the amount of the judgment on, or settlement of, any claim exceeds the limit of our liability under this Policy, we will only pay that part of the interest and legal costs awarded which the limit of our liability under this Policy bears to the amount of the judgment or settlement. When calculating the amount of the judgment or settlement, interest and legal costs awarded and punitive or exemplary damages will be excluded.

3. In addition we will pay for any legal costs incurred with our written consent in defending any claim made in respect of an occurrence which is covered under this Policy. However, if any person indemnified under this Policy is liable to pay compensation under any judgment or settlement and that payment exceeds the limit of our liability under this Policy, we are only liable to pay that part of the legal costs as the limit of our liability under this Policy bears to the compensation payable (excluding interest and legal costs awarded or agreed and punitive or exemplary damages) and we have the right to recover from that person as a debt due and payable any part of such costs we have paid in excess of our liability.

4. We will not pay under this Policy in respect of any claim
(a) for or arising out of damage to or loss or destruction of property on the land you are or any person insured under this Policy is treating if the owner or occupier of that land intends some portion of that land to be treated by you or any person insured under this Policy;
(b) arising out of the death, bodily injury, illness or disease of any person who owns, occupies or is upon the land you are or any person insured under this Policy is treating (whether or not such person was present on the land while it was being treated) if the owner or occupier of or a resident on that land intends some portion of that land to be treated by you or any person insured under this Policy;
(c) under or arising from environment protection or equivalent legislation;
(d) arising out of the possession, handling, storage, sale, dealing in or distribution of agricultural chemicals (otherwise than by aerial spraying by the aircraft) or other chemicals, fertilisers, seeds, baits and/or insecticides;
(e) under workers¹ compensation, employees¹ compensation, accident compensation or equivalent legislation other than a subrogation claim brought by an insurer to recover sums paid pursuant to such legislation;
(f) arising out of the death or injury of any person in the course of or in connection with his or her employment by the party claiming indemnity under this Policy;
(g) for the loss of or damage to property owned by or in the custody or control of you, your employees or any person insured under this Policy;
(h) arising out of any air traffic control operations conducted by you; (i) arising out of breach of any professional duty owed by you or your employees or agents;
(j) arising from any work undertaken by your subcontractors;
(k) for which you are liable under Part VA of (Commonwealth) Trade Practices Act 1974;
(l) arising out of any air display, air meet, air race or air show or the use or occupation of any building or stand to accommodate spectators in connection therewith ;
(m) arising out of death, bodily injury, illness or disease suffered or contracted by
(i) you or a member of your family or household; or
(ii) any other person insured under this Policy or a member of that person¹s family or household;
(n) arising out of death, bodily injury, illness or disease suffered or contracted by any person (including a passenger) whilst aboard an aircraft or embarking or disembarking;
(o) arising out of any fright, panic, shock or nervous or psychiatric disorder suffered by any person animal or bird.

5. It shall be your obligation to pay the deductible stated in the Coverage Schedule in respect of each claim under this Policy. Bodily injury (including death, illness or disease) of one or more persons and/or damage to one or more properties resulting from one specific aerial application shall be regarded as one claim for this purpose.

Section 4: WHAT WE DO NOT COVER UNDER THIS POLICY

1. You are not covered if at the time of an occurrence giving rise to the claim:

A. The aircraft is being used with your knowledge and/or consent for any illegal purpose or any use other than aerial spraying, ferrying or positioning flights.

B. The aircraft is outside the geographical limits stated in the Coverage Schedule.

C. The aircraft is being piloted with your knowledge and/or consent by any person other than those named or otherwise described in the Coverage Schedule as pilots.

D. The aircraft is, with your knowledge and/or consent, being used for:
(a) pylon racing;
(b) record attempts;
(c) mustering, fish spotting or feral animal control;
(d) experimenting with or testing new parts (other than replaced similar parts), new devices or new designs; and the occurrence is caused or contributed to by any of these activities.

E. The pilot is not licensed or authorised under operational legislation to conduct the operation.

2. This Policy does not provide cover for any legal liability arising from or created or determined by the laws, statutes or courts of any jurisdiction outside Australia.

3. CONTRACTUAL LIABILITY
You are not covered for any liability you have assumed under any agreement except to the extent that you would have been liable if the agreement had not been entered into.

4. OTHER POLICIES
You are not covered under this Policy in respect of any claim to the extent that the risk is or should be insured by or would but for the existence of this Policy be insured by your Employer¹s Liability policy or an equivalent policy required by or deemed to be in force by any workers¹ compensation, employees¹ compensation, accident compensation or equivalent legislation. If at the time of an occurrence giving rise to a claim under this Policy the risk is insured by or would but for the existence of this Policy be insured by any other chemical liability, public liability and/or property damage policy or policies you are not covered except to the extent that the amount of any such claim exceeds the amount payable under such other policy or policies. However, we will not pay any amount in excess of the relevant limit of our liability under this Policy.

5. RADIOACTIVE CONTAMINATION
You are not covered for loss, damage or liability directly or indirectly caused by or contributed to by or arising from ionizing radiations or contamination by radioactivity.

6. WAR, HIJACKING AND OTHER POLITICAL PERILS
y or arising out of:
(a) War, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, martial law, military or usurped power or attempts at usurpation of power;
(b) Any hostile detonation of any weapon of war employing atomic or nuclear fission and/or fusion or other like reaction or radioactive force or matter;
(c) Strikes, riots, civil commotions or labour disturbances;
(d) Any act of one or more persons, whether or not agents of a sovereign power, for political or terrorist purposes and whether the loss or damage resulting therefrom is accidental or intentional;
(e) Any malicious act or act of sabotage;
(f) Confiscation, nationalisation, seizure, restraint, detention, appropriation, requisition for title or use by or under the order of any government (whether civil, military or de facto) or public or local authority;
(g) Hijacking or any unlawful seizure or wrongful exercise of control of the aircraft or crew in flight (including any attempt at such seizure or control) made by any person or persons on board the aircraft acting without your consent. Furthermore this Policy does not cover claims arising whilst the aircraft is outside your control by reason of any of the above perils. The aircraft shall be deemed to have been restored to your control on the safe return of the aircraft to you at an airfield not excluded by the geographical limits of this Policy, and entirely suitable for the operation of the aircraft. Such safe return shall require that the aircraft be parked with engines shut down and under no duress.

7. NOISE AND POLLUTION AND OTHER PERILS
A. You are not covered for claims directly or indirectly occasioned by, happening through or in consequence of:
(i) noise (whether audible to the human ear or not), vibration, sonic boom and any phenomena associated with them;
(ii) pollution and contamination except as provided in paragraph 1 of Section 3 of this Policy, subject to all other conditions exclusions and Essential Terms;
(iii) electrical and electromagnetic interference;
(iv) interference with the use of property; unless caused by a crash fire explosion or collision or a recorded inflight emergency causing abnormal aircraft operation.

B. With respect to any provision in this Policy concerning our duty (if any) to investigate or defend claims, such provision shall not apply and we shall not be required to defend:
(i) claims excluded by Clause A, or
(ii) a claim or claim covered by this Policy when combined with any claims excluded by Clause A (referred to below as "Combined Claims²).

C. In respect of any Combined Claims, we shall (subject to proof of loss and the limits of this Policy) reimburse you for that portion of the following items which may be allocated to the claim or claims covered by this Policy: (i) damages awarded against you, and (ii) defence fees and expenses incurred by you.

D. Nothing in this paragraph shall override any radioactive contamination or other exclusion clause attached to or forming part of this Policy.

Section 5: ESSENTIAL TERMS

1. We are not liable to make any payment to or on behalf of you unless you observe and fulfil all the Essential Terms of this Policy and any other obligations imposed on you by this Policy (including any endorsement). Nor are we liable to make any payment to or on behalf of any other person otherwise entitled to indemnity under this Policy unless that person observes and fulfils all such Essential Terms and obligations. However, we shall not decline to make payment in respect of any claim made under this Policy in relation to the death, injury or loss of or damage to the property of other persons who at the time of the occurrence were not passengers, merely because:
(a) you and/or any other person otherwise entitled to indemnity under this Policy failed to observe the Essential Terms or failed to fulfil any of the obligations imposed by this Policy; and/or
(b) the operation of paragraph 1 of Section 4 of this Policy excludes our liability. If we do make any such payment we have the right subject to law to recover from the persons against whom the claim is made (or the executors, administrators or assigns of those persons), as a debt due and payable, the total amount we have paid. However, we will only exercise this right where the occurrence giving rise to the claim was caused or materially contributed to by the failure to observe Essential Term No. 3 or by participation in any of the conduct referred to in paragraph 1 of Section 4 of this Policy. This right is in addition to the right we have under Essential Term No. 11 by way of subrogation.

2. The exclusions set out in this Policy apply equally to any other person otherwise entitled to indemnity under this Policy as if that person were you.

3. You shall comply with all operational legislation and shall take all reasonable steps to ensure that:
(a) any pilot of the aircraft, your agent(s) and employee(s) comply with :
(i) all operational legislation;
(ii) use and application guidelines and techniques specified by the manufacturer of the agricultural chemical used; and
(b) the aircraft is airworthy and its equipment for aerial spraying is functioning correctly at the commencement of each flight.

4. You will at all times exercise reasonable care to ensure that you employ only competent personnel and that the ways, implements, plant, machinery and appliances used in your business are substantial and sound and in proper order, and fit for the purpose for which they are used, and that all reasonable safeguards and precautions against accidents are provided and used.

5. On request you shall produce to our Agent or any assessor appointed by our Agent:
(a) all log books and operational or other records in relation to the aircraft;
(b) all records relating to a flight operation or job giving rise to or which may give rise to a claim under this Policy;
(c) all records required to be kept pursuant to operational legislation.

6. You shall use due care and do everything reasonably practicable to avoid or lessen any loss or liability covered by this Policy. Without our written consent you are not to:
(i) admit any liability or fault;
(ii) pay or offer or promise to pay any moneys; in respect of any claim or occurrence covered by this Policy.

7. In the event of an occurrence likely to result in a claim under this Policy you shall immediately take any action that may be necessary in the interests of safety and to prevent further damage.

8. We shall be entitled at any time and for so long as we desire to take absolute control of all negotiations and proceedings and in your name to settle or defend or pursue any claim. We may at any time upon giving written notice to you abandon the pursuit or the defence of any claim which we have undertaken but, if we do, we shall (except where you have or your representative has been dishonest or withheld relevant information) pay our share of any costs incurred in connection with such pursuit or defence up to the date we gave you notice.

9. You must immediately give to our Agent a full and truthful written description of any event likely to result in a claim being made under this Policy. You must also immediately give to our Agent any letter, writ, summons or statement of claim you receive relating to any claim under or occurrence covered by this Policy.

10. You shall not do anything to harm our interests and shall assist us in any way we or our Agent reasonably require. If required by us or our Agent, you shall attend inquests hearings and trials, and shall assist in reaching settlements, in obtaining and giving evidence, in securing the attendance of witnesses and in the conduct of litigation.

11. We have the right to recover any payment made by us from any person you may be able to hold liable or responsible and we shall have full discretion in the conduct, defence or settlement of any claim and to take any action in your name. You and any other person entitled to claim under this Policy will not hinder these rights and will give us and our Agent all information, assistance and co-operation we or our Agent may require.

12. Should we make any payment to or on behalf of any of you under this Policy in circumstances where we are not liable to pay another or others of you because the other or others are in breach of Essential Terms Nos. 3 or 4, or because any of the Exclusions in paragraph 1 of Section 4 apply, we have the right to recover as a debt due and payable from the other or others or their executors, administrators or assigns the total amount we have paid in such circumstances.

13. You must be honest in all your dealings with us, our Agent and any assessor appointed by our Agent. If you or any person acting on your behalf is not honest in making a claim, whether as regards amounts or otherwise, we are not liable in respect of that claim or in respect of the occurrence giving rise to that claim.

14. If there is any change in the circumstances, magnitude or nature of any of the risks covered by this Policy after this Policy is in force you must give our Agent immediate notice of the change. We are not liable for any claim arising after such a change unless our Agent has been notified of the change and we have accepted it.

15. This Policy shall not be transferred or assigned either in whole or in part without our written consent to the transfer or assignment appearing on this Policy.

16. You and we agree that this policy shall not be construed as a policy of marine insurance.

17. We may cancel this Policy on any of the grounds set out in section 60 of the Insurance Contracts Act 1984 by giving notice in writing of the proposed cancellation to you either personally or by post to your last address known to us. Such notice shall have effect to cancel this Policy at 4.00 p.m. on the third business day after the day on which the notice was given to you or at any later time specified in the notice. If we cancel this Policy, we will return in respect of the unexpired period of insurance a pro rata portion of the premium. In the event of cancellation by you, the premium shall be adjusted on the basis of our receiving or retaining the customary short term premium charged by our Agent, details of which will be provided upon request. You are not entitled to a return of premium if any moneys have been paid or are payable by us under this Policy.

18. If aircraft are added to this Policy, a pro rata premium for agricultural chemical liability cover in respect of operation of such aircraft by you shall be charged. If any of the aircraft are deleted from this Policy, premium in respect of such aircraft shall be refunded in accordance with the following table: Policy in force for: % of Annual Premium attributable to the deleted aircraft returnable on deletion 0-31 days 66 2/3% 31-61 days 40% 61-91 days 25% 91-120 days 15% 120 days or more nil You are not entitled to a return of premium upon the deletion of any of the aircraft in respect of the operation of which moneys have been paid or are or may be payable by us. Cover for aircraft added commences on the date you notify us of and we agree to the addition. Cover for the aircraft deleted ceases on the date the aircraft leaves your fleet or you cease to operate it (whichever is the earlier).

19. Your cover under this Policy remains in force whilst the aircraft is being used:
(a) by the Civil Aviation Authority in connection with the normal activities of the Authority and whilst being operated by designated Authority personnel subject to our approval being gained for such use for a period intended to be in excess of seven (7) days;
(b) with your approval for type endorsement or agricultural operational flying training of you or any pilot employed by you subject always to you or such pilot satisfying any minimum flight experience requirements set out in the Coverage Schedule;
(c) for emergency medical or mercy flight(s) in respect of an injured or incapacitated person;
(d) in connection with search and rescue services provided pursuant to operational legislation.

20. In the event of an award being made both against you (or your Estate) and against any other person(s) covered under this Policy (or their Estate or Estates) you shall to the extent of your liability be entitled to priority in respect of any moneys payable by us.

21. The inclusion of more than one of you as being covered under this Policy shall not in any way affect the rights of any of you, it being the intent of this Policy to protect you in the same manner as though each of you had been issued with a separate policy. However, irrespective of there being more than one of you covered under this Policy, whether by endorsement or otherwise, our total liability under this Policy shall not exceed the relevant limit(s) of our liability stated in the Coverage Schedule.

22. This Policy shall be construed according to the laws in force from time to time of the State or Territory of Australia