CHUBB INSURANCE COMPANY OF AUSTRALIA LIMITED

C H U B B

A.B.N. 69 003 710 647 Level 51, Rialto South Tower, 525 Collins Street, Melbourne Victoria 3000 Australia Telephone: 61-3-9242 5111 Facsimile: 61-3-9629 7417 DX: 30973 - Stock Exchange Melbourne

FIRE PROTECTION IMPAIRMENT SUPERVISION

1.Fire Protection Valve Supervision History attributes a number of major losses in sprinklered industrial buildings , to valves, which were either shut prior to a fire or closed before the fire was extinguished. Since isolating valves are a key element in any fire protection or sprinkler water supply, it is critical that they remain open at all times. In principal, all valves controlling water supplies to fire protection systems including underground valves should be visually inspected on a regular basis & physically tried on a quarterly basis. All valves should be locked in the open position by the use of good quality chain & padlock or by providing a securely locked enclosure. Precautions when protection systems are Inoperative The majority of impairments result from shut sprinkler control valves. However, other items such as electrical power outages, damaged fire doors, inoperative fire pump, tank/reservoir less than two thirds full, & public water supply outages also constitute impaired protection. Following is a list of precautions to be taken: a. Plan Ahead. Non-production hours are the best times to fix impairments because there are fewer ignition sources around. b. Eliminate ignition sources during the impairment including shutting down of hazardous processes. c. All relevant plant personnel, in addition to the emergency organisation, should be notified that protection is out of service. d. Shut protection down at the last minute. Make sure all personnel, materials, and tools are ready. e. Emergency plugs for open ends of pipes should be available to enable unaffected areas to be restored f. Work on the impairment should be continuous , so that protection can be restored as soon as possible. g. Sometimes emergency connections are possible which will minimise the extent of an impairment. For example, it may be possible to connect a hydrant outlet to a riser drain to supply water. h. Have a functional fire hose or extinguisher/hose reel ready for immediate use. i. Establish a continuous watch in the impaired area so any fire can be quickly detected. j. A fire tender ( truck ) can sometimes be used if other sources of water are affected by the impairment. k. Hazardous work such as cutting and welding should be stopped. l. Smoking should be prohibited or, in a few exceptional cases, limited to safe areas. m. The public fire department should be notified. n. Make sure the people involved remain alert so protection can be quickly restored. o. The impairment notification system should be used & an individual stationed at the valve (see attached procedure).

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CHUBB INSURANCE COMPANY OF AUSTRALIA LIMITED

C H U B B

A.B.N. 69 003 710 647 Level 51, Rialto South Tower, 525 Collins Street, Melbourne Victoria 3000 Australia Telephone: 61-3-9242 5111 Facsimile: 61-3-9629 7417 DX: 30973 - Stock Exchange Melbourne

3. Temporary Closure of Fire Sprinkler Valves - Special Circumstances. 1. If a fire alarm is raised, but is a suspected false alarm, such as when a sprinkler head is knocked off: (a) The affected area should be investigated immediately. (b) Since any fire that could activate a sprinkler would be large, it would be clear if there is a fire incident. In the event of a certain false alarm, the sprinkler valve may be closed immediately in order to avoid further water damage. If there is no fire , the fire brigade cannot assume any authority for the incident, but if a fire were apparent they would be responsible for extinguishing any fire, once on site. 2. If a fire incident was witnessed & verified the fire emergency plan should be activated. Common sense should prevail, & site personnel should be cautious about closing any sprinkler valves until absolutely certain that the fire is extinct. Assuming the fire is small and is easily controlled it is necessary to exercise precautions such as stationing a person at the isolated valve, until the incident is 'cleared ' & the protection is restored. An additional precaution may be to temporarily suspend unusually hazardous operations such as oxy welding, solvent painting etc. until protection is restored. Only if the fire was substantial ( more than 5 sprinklers operating ) & the fire system was to be impaired for a long time, (typically resulting in an insurance claim & impairment notification), it may be practical to halt production for a short time, if there is some risk of a re-flare of the fire, or if salvage/clean-up operations have yet not been resolved. If a significant fire has occurred, it is likely that some production machinery, which may have been shut down, will need to be re-started to minimise business interruption. 3. For a 'temporary' closure (eg false sprinkler alarm) the situation should be monitored. For instance, when the sprinklers are temporarily impaired for routine testing/servicing of a short duration (3 hrs) there should be a plan to re-instate the protection as soon as the job is done. If for instance false operation of one sprinkler, causes a 'temporary closure', the fire brigade should be promptly notified of the false alarm. Then a job should be immediately issued to a fire protection contractor , staff or plumber, who is capable of safely removing the faulty head (at ceiling height level) & replacing it with a new sprinkler head from the spares kept in the sprinkler cabinet. In this case sprinkler fire protection may be restored as soon as possible & should not result in any substantial production interruption in the affected area, especially if water clean up is carried out quickly. Since in this case there is no increased hazard, it is common to rectify the temporary valve closure as soon as practical & resume production instantaneously.

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CHUBB INSURANCE COMPANY OF AUSTRALIA LIMITED

C H U B B

A.B.N. 69 003 710 647 Level 51, Rialto South Tower, 525 Collins Street, Melbourne Victoria 3000 Australia Telephone: 61-3-9242 5111 Facsimile: 61-3-9629 7417 DX: 30973 - Stock Exchange Melbourne

Fire Protection Impairment Reporting

PURPOSE/SCOPE This is a Loss Control procedure - not a permit or approval . It is intended to be a quick means of communication, to both site personnel and your insurers, of actions relating to the impairment of automatic or manual fire protection, [or other critical protection systems], (during servicing, repair, modifications etc.) to ensure any impairment is conducted in a safe, well planned manner. It is important to use this procedure for all MAJOR impairments affecting primary protection systems. Please phone your Loss Control contact who can advise you of the appropriate circumstances for your operations. ( For instance , in some cases written notification may only be required if the timeframe exceeds 4hrs or affects 25% of the site or an area over 250 sq.m ) PROCEDURE Notification Form ( attached ) PRIOR to isolation or impairment of a fixed fire protection system (including, but not limited to; sprinklers, hydrants, electric & diesel powered fire pumps, public water supply sources, CO2/Halon systems, and/or their associated alarms), Part 'A' of the impairment advice form [ Isolation ] should be completed and Faxed or Emailed. The notice must include start and finish times, the areas where protection will be affected, precautions taken, and reason for the impairment. If access to a fax is not available, telephone may be used, but telephone notification is less desirable, particularly at night or during weekends & public holidays. In the event that telephone advice is necessary during non-business hours, a recorded answering service is available. Upon completion of work, and full restoration of protection, Part 'B' of the advice form [Restoration] should be completed and faxed/Emailed as outlined ; the original being filed on site for future reference. Impairment Tag (Red Tag) Impairment tags (red tags) should be conspicuously displayed on all relevant equipment whenever a protection system is rendered inoperative. The tag should be signed, with time and date, by the person responsible for the closure. Upon completion of work and full restoration of protection (eg re-opening of a sprinkler valve), tags are to be removed and returned to the appropriate department for filing. ('Valve', in this context, includes any switch, lever, hand wheel etc., whose operation, disables an automatic protection or critical detection system). Upon your request, red tags & warning stickers showing the relevant contact phone & fax numbers can be supplied, so that these can be affixed to your fire protection equipment. You will be notified of the relevant risk management/loss control department contact details for each region.

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CHUBB INSURANCE COMPANY OF AUSTRALIA LIMITED

C H U B B

A.B.N. 69 003 710 647 Level 51, Rialto South Tower, 525 Collins Street, Melbourne Victoria 3000 Australia Telephone: 61-3-9242 5111 Facsimile: 61-3-9629 7417 DX: 30973 - Stock Exchange Melbourne

FIRE PROTECTION & SECURITY IMPAIRMENT FORM

Protection impairments occur when a fire prevention, protection, alarm or supervisory system is shut off, impaired or otherwise taken out of service completely or in part. Such circumstances are sometimes unavoidable due to a number of reasons such as a fault, failure or accidental damage of equipment, renovation or expansion of the areas being protected. As a result of these system(s) being impaired, the premises or equipment previously protected are now exposed to a greater loss should an incident occur. Proper impairment handling procedures can assist Management in reducing the impact of such impairments to property and life safety.

INSTRUCTIONS: When fire protection systems (e.g. sprinkler systems, fire detection systems, specialextinguishing systems) or security systems are impaired as follows:

Impairment/isolation exceeds 8 hours duration or extends overnight, and/or Impairment/isolation of any primary fire water supply (city water mains and fire pumps), and/or Impairment/isolation affecting more than 25% of the complex/building

Complete this form, save , then attach document & email to AUS.LCD @ CHUBB.com.
PROPERTY NAME: PROPERTY ADDRESS: PERSON REPORTING IMPAIRMENT: DATE OF IMPAIRMENT: TITLE : TEL #:

TIME OF IMPAIRMENT:

HOW LONG WILL IMPAIRMENT LAST ? DESCRIPTION OF IMPAIRMENT: REASON FOR IMPAIRMENT: NAME OF CONTRACTOR COMPLETING WORK: CONTRACTOR CONTACT NAME & NUMBER:

1 2 3 4 5 6 7 8

ACTION TAKEN BY LOCAL MANAGEMENT: Fire Brigade notified ? Are additional fire extinguishers available in impaired area ? Are security guards patrolling impaired area ? Is impaired area monitored by a detection system ? Heat Smoke Other (specify) Detection system monitored by: Is hydrant/hosereel system available for impaired area ? Have hazardous operations been discontinued (eg. welding) Other:

STATUS

ADDITIONAL ACTIONS (if any) RECOMMENDED BY THE CHUBB INSURANCE COMPANY OF AUSTRALIA WILL BE ADVISED BY RETURN EMAIL. *PLEASE ADVISE BY EMAIL WHEN SYSTEM IS RESTORED TO NORMAL OPERATION* If any problems with emailing this form , please fax to Loss Control Manager Chubb Insurance Melbourne 03 9629 7417 or phone 03 9242 5111 Sydney 02 9273 0101 or phone 02 9273 0100

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