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3. a full subcontract and full scope of work that has not been fully executed by you and your Subcontractor. If
you and your Subcontractor execute a letter of intent that is contingent in any way at the option of an
Insured, only the work that is authorized by the letter of intent is deemed a Contract.

D. Contract Value means the total amount of all of a Subcontractor’s Contracts that are in Default, including any
amounts to which the Subcontractor is entitled under such Contracts, determined at the time of Default.
E. Default means material breach by the Subcontractor prior to fully complying with all the terms and conditions of
the Contract, including any Post-Completion Obligations, as determined either (i) by you in a written default
notice to the Subcontractor that includes references to the specific Contract provisions with which the
Subcontractor has not complied; or (ii) by a legally binding authority. A determination of Default by a legally
binding authority shall supersede any previous determination.
F. Indirect Costs means costs and expenses paid by you for time related work and corresponding project(s) delay
to the extent caused by and solely attributable to a Default of a Subcontractor under the terms and conditions of
a Contract and that are not included in Subsections II.I.1 and 2. Indirect Costs are subject to the Each Loss
Indirect Costs Sublimit of Insurance set forth in the Declarations and include job acceleration, extended project
overhead, damages, subject to Subsection III.I., and costs and expenses incurred and paid by you as defined
under your contract with your customer to construct the project on which there is a Default by the Subcontractor.

Indirect Costs shall be subject to a Critical Path schedule analysis which apportions time and delay to all
corresponding activities or parties functioning for the project. Insured shall contemporaneously maintain updated
detailed project schedules from at least the time of Default by the Subcontractor, using Critical Path scheduling
methodology. Schedules must be sufficiently detailed to permit an accurate analysis of the discreet delays to the
Critical Path.

Indirect Costs do not include costs incurred by the Insured for time related work and corresponding project(s)
delay if the Insured fails to maintain the data and schedules as described in this definition.
G. Insolvent means that any of the following steps, or equivalent steps, has been taken by or against a
Subcontractor by or in a court having jurisdiction over the Subcontractor's affairs or pursuant to a statute
applicable to the Subcontractor and its creditors:
1. Bankruptcy or insolvency is adjudicated against the Subcontractor.
2. Voluntary or involuntary proceedings are initiated under Chapter 7, Chapter 11 or Chapter 13 of the United
States Bankruptcy Code as well as any equivalent statute or similar law.
3. A court order is issued or the Subcontractor accepts a voluntary resolution for the winding-up of the
Subcontractor’s affairs or liquidation of the Subcontractor's assets.

H. Insured means the person(s) or entity(ies) set forth in the Declarations or set forth as an Insured by
endorsement to this Policy.
I. Loss means the costs and expenses paid by you that are solely attributable to a Default of a Subcontractor
under the terms and conditions of a Contract, less the unpaid Balance of the Contract Price, and less any
amounts retained or recovered by you with respect to the Contract of the defaulted Subcontractor.
These costs and expenses are:
1. Costs and expenses of completing Subcontractor's obligations under the Contract, including amounts the
defaulted Subcontractor is required to pay under the Contract, but only to the extent that there would be
legal liability for these costs and expenses under the Contract.

2. Cost of correcting defective or nonconforming work or materials; and
3. Indirect Costs.
For Insuring Clause A, multiple Defaults by the same Subcontractor on one or more Contracts shall be
considered a single Loss. Loss(es) will be attributed to the Policy Period in which the Contract was executed,
not the year(s) in which the costs and expenses are paid by you or Loss(es) are actually paid by us;
For Insuring Clause B, multiple Defaults by the same Subcontractor on one or more Contracts executed in
connection with one or more Projects reported for a particular Policy Period shall be considered a single Loss

U-SGD-100-B CW (04/16)
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