DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
PAGE 42

ARTICLE IX

9.  Insurance.

9.1.  Duty to Obtain Insurance: Types.

(a)  Public Liability.  The Board shall obtain and maintain adequate blanket public liability insurance (including medical payments), with such limits' as may be considered acceptable to FNMA and as set forth in Section 1365.9 of the California Civil Code, insuring against liability for bodily injury, death and property damage arising from the activities of the Association and its Members, with respect to the Common Property.

(b)  Fire and Casualty Insurance.  The Board shall also obtain and maintain fire and casualty insurance with extended coverage, without deduction for depreciation, in an amount as near as possible to the full replacement value of the Common Property.

(c)  Fidelity Bonds.  Fidelity bond coverage which names the Association as an obligee must be obtained by or on behalf of the Association for any person or entity handling funds of the Association, including, but not limited to, Association officers, directors, trustees, employees and agents, and employees of the Manager, whether or not such persons are compensated for their services, in an amount not less than the estimated maximum of funds, including reserve funds, in the custody of the Association or the Manager at any given time during the term of each bond. The aggregate amount of such bonds may not be less than the sum equal to one fourth (1/4) of the Annual Assessments on all Condominiums in the Project, plus reserve funds.

(d)  Insurance Required by FNMA, GNMA and FHLMC.  The Association shall continuously maintain in effect such casualty, flood and liability insurance and fidelity bond coverage meeting the insurance and fidelity bond requirements for similar residential developments established by FNMA, GNMA and FHLMC, so long as any of which is a Mortgagee or Owner of a Condominium within the Project, except to the extent such coverage is not reasonably available or has been waived in writing by FNMA, GNMA and FHLMC, as applicable.

(e)  Other Insurance.  The Board shall purchase such other insurance, as necessary, including but not limited to, errors and omissions, directors, officers and agents liability insurance, plate glass insurance, medical payments, malicious mischief, liquor liability and vandalism insurance; fidelity bonds and worker's compensation, and such other risks as shall customarily be covered with respect to condominium projects similar in construction, location and use.

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