2023-041-E-IT Dept-RecTrac-Parks and Rec

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TCM-POL-001 (01/19) Page 5 of 16 a material fact which is relied upon in good faith by such Insured, including such loss resulting from business e-mail compromise, social engineering, spear-phishing and e-mail spoofing; 2. the loss of money or securities from an account at a financial institution resulting solely from fraudulent electronic or telephone instructions issued by a third party to a financial institution directing such institution to transfer, pay or deliver money or securities from any account maintained by the Insured Entity at such institution, without the Insured Entity's knowledge or consent; or 3. the act of a third party gaining access to and using the Insured Entity’s telephone system in an unauthorized manner. eCrime Event does not include: a. any loss arising, directly or indirectly from an Insured’s acceptance, deposit or handling of: i. counterfeit currency or bank drafts; ii. a bank draft, check or other financial instrument returned due to insufficient funds; iii. counterfeit securities, bonds or other financial instruments; or iv. counterfeit goods of any kind, including, but not limited to, loss arising from a transfer of money by an Insured to a third party associated with an Insured’s acceptance, deposit or handling of such items; b. any loss arising, directly or indirectly, from loan fraud, mortgage fraud or accounting fraud including, but not limited to, check kiting, money laundering or fraudulent loan schemes. This includes loss arising from a transfer of money by an Insured to a third party associated with any such fraud; c. any actual or alleged use of credit, debit, charge, access, convenience, customer identification or other cards; d. any transfer involving a third party who is not a natural person Insured, but had authorized access to the Insured’s authentication mechanism; e. the processing of, or the failure to process, credit, check, debit, electronic benefit transfers or mobile payments for merchant accounts; f. any accounting or arithmetical errors or omissions, or the failure, malfunction, inadequacy or illegitimacy of any product or service; or g. any fraudulent, dishonest or criminal act committed by any natural person Insured. M.First Party Loss means the value of monies (including money in the form of a digital currency), marketable goods or services paid or delivered under duress by or on behalf of the Insured Entity,with the Insurer’s prior written consent, solely for the purpose of terminating a Cyber Extortion Threat. If the Declarations indicates that the Insured has purchased “Extended” First Party Loss coverage, then First Party Loss also means: 1. the reasonable and necessary costs charged by a vendor designated or approved in writing by the Insurer to restore, replace or recreate software or electronic data to its condition immediately prior to the Cyber Event but only for such costs that are as a direct result of the Cyber Event; 2. the reasonable and necessary expenses incurred by the Insured Entity during the Indemnity Period to continue or maintain normal operations that are over and above those expenses the Insured Entity would have incurred had no Cyber Event occurred; 3. the net profit or loss without interest and before tax that the Insured Entity would have earned or incurred during the Indemnity Period due to the actual interruption or impairment of the Insured Entity’s business operations as a direct result of the Cyber Event, plus the continuing normal operating expenses incurred by the Insured Entity during the Indemnity Period (including payroll), but only to the extent that such operating expenses must necessarily continue during the Indemnity Period; and 4. the cost to repair or replace computer hardware or equipment that is damaged or impaired and must be replaced. First Party Loss does not include, except as described in Section V.,Supplemental Payments & Services,any costs attributed to an upgrade or improvement of electronic data, software or computer systems beyond what existed prior to the Cyber Event unless such upgrade or improvement is reasonable because of improvements in the available technology. N.Indemnity Period means the period of time that begins after the elapse of the Waiting Period indicated in Item 8. of the Declarations and ends 60 days after the time when the Insured Entity could have resumed normal DocuSign Envelope ID: 028D978E-DF71-4D79-863D-8360D7144DD8