Page 36 - 018 Mutiny Bay - CCRs Second Amended Restated 2012 0605 REDUCED[2188]_Neat

ARTICLE 13. INSURANCE

13.1 In General. The Association shall obtain and maintain, to the extent reasonably
available and appropriate:

13.1.1 Property Insurance on the Condominium, which may, but need not,
include structures, equipment, improvements, and betterments in a Unit installed by the Unit
Owners, insuring against all risks of direct physical loss commonly insured against. The total
amount of insurance after application of any deductibles shall not be less than one hundred
percent of the full replacement cost of the Common Elements, Limited COlnmon Elements, the
Units (inclusive of interior partitions, equipment, fixtures, betterments and improvements in or
serve the Units installed by the Declarant, Association or the Unit Owner intended as a
permanent part of the Units) and personal property of the Association with an "Agreed Amount
Endorsement" or equivalent thereof and, if required by FNMA or FHLMC, construction code
endorsements, such as a "Demolition Cost Endorsement", a "Contingent Liability from
Operation of Building Laws Endorsement", and "Increased Cost of Construction Endorsement",
and such other endorsements as FNMA or FHLMC deems necessary and are reasonably
available. The Board's policy shall provide a separate loss payable endorsement in favor of the
Mortgagee of each Unit. The policy may, in the discretion of the Board, cover the peril of
earthquake or flood if such coverage is reasonably available. The Board or insurance trustee, if
any, shall hold insurance proceeds in trust for the Owners and their Mortgagees, as their interests
may appear. Each Owner and the Owner's Mortgagee, if any, shall be beneficiaries of the policy
in accordance with the percentage of undivided interest of each Unit Owner. Certificates of
Insurance shall be issued to each Owner and Mortgagee upon written request to the Association.

13.1.2 Liability insurance, including medical payments insurance, in an amount
determined by the Board but not less than Two Million Dollars, covering all occurrences
commonly insured against for death, bodily injury, and property damage arising out of or in
connection with the use, ownership, or maintenance of the Common Elements;

13.1.3 Industrial insurance to the extent required by applicable laws;

13.1.4 Fidelity bonds naming the members of the Board, the Manager and its
employees and such other persons as may be designated by the Board as principals and the
Association as obligee, in at least an amount equal to three months aggregate Assessments for all
Units plus reserves, in the custody of the Association or Manager at any given time during the
term of each bond. Such fidelity bonds shall contain waivers of any defense based upon the
exclusion of persons who serve without compensation from any definition of "employee" or
similar expression;

13.1.5 Insurance against loss of personal property of the Association by fire, theft
and other losses with deductible provisions as the Board deems advisable;

13.1.6 Directors' and Officers' liability coverage; and

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