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6. 1. F. - Page 64 Development consists of more than one hundred (100) separate interests, subject to the Board's good faith determination of availability and cost - effectiveness in relation to the risk and premium to be charged for such coverage; provided, however, under no circumstances may the minimum amounts of coverage be less than that specified in Civil Code Section 1365.7(a)(4). Such limits are to be reviewed by the Board not less frequently than annually. Said policy or policies shall provide for a full waiver or subrogation against the insureds, a full waiver of all defenses based upon acts of insureds and shall further provide that said policy or policies cannot be canceled or modified without at least sixty (60) days' prior written notice to the Association. Reference is made to Civil Code Section 1365.7 for further detail regarding statutory minimum requirements for Association officers and directors liability insurance. Section 9.5 Fidelity Bond or Insurance The Association shall maintain, or be covered by, a fidelity bond or policy of insurance against dishonest acts on the part of any Persons entrusted with or permitted to handle funds belonging to or administered by the Association including the professional manager and his employees. Such fidelity bond or policy of insurance shall name the Association as the named insured and shall be written in an amount sufficient to provide protection which is not less than the sum of three (3) months' Assessments on all Condominiums in the Development plus the Association's reserves. An appropriate endorsement shall be added to such policy or bond, if necessary, to cover any Persons who serve without compensation, including directors, if such policy or bond would not otherwise cover the acts of volunteers. Section 9.6 Workers' Compensation Insurance The Association shall obtain Workers' Compensation Insurance to the extent required to comply with any applicable law. Section 9.7 Earthquake Insurance The Association shall obtain earthquake insurance only if a majority of the Owners vote to purchase such insurance. If the Board elects to purchase such earthquake insurance, the insurance may be subsequently cancelled on a vote of the majority of the Owners. If cancelled, the Association shall make reasonable efforts to notify the Owners of the cancellation. Section 9.8 Insurance Required by Certain Lenders Notwithstanding Sections 9.1 through 9.6 or any other provision of this Declaration, in the event the casualty insurance, boiler and machinery insurance, liability insurance and fidelity bond requirements established for condominium projects by FNMA or FHLMC are greater than the insurance and fidelity bond requirements specified in this Declaration, the FNMA and FHLMC requirements, whichever are greater, shall govern and such insurance or fidelity bond shall be maintained by the Association. This requirement as to FNMA or FHLMC shall be effective so long as FNMA or FHLMC is a Mortgagee, Insurer or Guarantor of a Mortgage or an Owner of a Condominium within the Development; provided, however, to the extent such coverage is not available or has been modified or waived in writing by FNMA or FHLMC, it need not be obtained. Section 9.9 General Policy Provisions; Notice to Owners (a) Each of the policies of insurance obtained by the Association pursuant to this Article 9 shall include as named insureds the Association, as trustee for the Owners, the Association's directors and officers, Declarant, and the Owners and their family members and shall provide that the insurers may not cancel, change or refuse to renew the policies without first giving sixty (60) days' prior written notice to the Association, the Owners and the Mortgagees. Each such policy shall also provide that coverage shall not be prejudiced by any act or neglect of any Condominium Owner except to the extent such prejudice is unavoidably imposed by law or by any failure of the Association to comply with 54 CCRS -One Marina. docx