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WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 99 06 07 E (Ed. 01-22) CALIFORNIA CANCELLATION ENDORSEMENT This endorsement applies only to the insurance provided by the policy because California is shown in Item 3.A. of the Information Page. The cancellation condition in Part Six (Conditions) of the policy is replaced by these conditions: Cancellation: 1. You may cancel this policy. You must mail or deliver advance written notice to us stating when the cancellation is to take effect. 2. We may cancel this policy for one or more of the following reasons: a. Non-payment of premium; b. Failure to report payroll; c. Non-payment of deductible billing; d. Failure to permit us to audit payroll as required by the terms of this policy or of a previous policy issued by us; e. Failure to pay any additional premium resulting from an audit of payroll required by the terms of this policy or any previous policy issued by us; f. Material misrepresentation made by you or your agent; g. Failure to cooperate with us in the investigation of a claim; h. Material failure to comply with Federal or State safety orders; i. Material failure to comply with written recommendations of our designated loss control representatives; j. The occurrence of a material change in the ownership of your business; k. The occurrence of any change in your business or operations that materially increases the hazard for frequency or severity of loss; I. The occurrence of any change in your business or operation that requires additional or different classification for premium calculation; m. The occurrence of any change in your business or operation which contemplates an activity excluded by our reinsurance treaties. 3. If we cancel your policy for any of the reasons listed in (a) through (g), we will give you 10 days advance written notice, stating when the cancellation is to take effect. Mailing that notice to you at your mailing address shown in Item 1 of the Information Page will be sufficient to provide notice. If we cancel your policy for any of the reasons listed in Items (h) through (m), we will give you 30 days advance written notice; however, we agree that in the event of cancellation and reissuance of a policy effective upon a material change in ownership or operations, notice will not be provided. 4. If we mail the notice to you, the stated periods of notice and your right to remedy the condition will be extended by 5 days if the place of mailing and your mailing address is within California, 10 days if the place of mailing or your mailing address is outside of California and 20 days if the place of mailing or your mailing address is outside of the United States. 5. The policy period will end on the day and hour stated in the cancellation notice. 6. A short rate penalty applies if you cancel this policy or if we cancel due to non-payment of premium, failure to report payroll, or non-payment of deductible billing. First, the standard premium, defined as the base premium (computed in accordance with Part 1, Section 2, Subsection 2 of the WCIRB's California Basic Underwriting Manual) adjusted for the experience modification factor and all other pricing factors except for premium discount and expense constant, will be multiplied by the quotient of the number of days for which the policy was written divided by the number of days the policy remained in force to produce the full standard premium. Second, the extended number of days will be determined by dividing the number of days the policy was in force by the number of days for which the policy was written and multiplying the quotient by 365 days. When the policy is written for a one-year period, the extended number of days will equal the number of days the policy remained in force. Third, the short rate percentage corresponding to the extended number of days will be obtained from the short rate cancellation table. Fourth, the short rate premium will be equal to the product of the full standard premium times the short rate percentage. The short rate table below will be used in computing the short rate premium. In no event will the final earned premium be less than the policy minimum premium. , Ride Mamg�nmtDhAefart o n ' ,, REV!e&v D 6 APPROVE] RY: _ WC 99 06 07 E Page 1 of 2 ' Risk Mang =® Management Specialist (Ed. 01-22) 01