If Lessee is unable or fails to procure physical damage insurance on the Equipment in accordance with Lessor’s requirements set forth in the Agreement, Lessee has elected, and hereby agrees, to be enrolled in Lessor’s Rental Damage Waiver Program (“RDW Program”) and agrees to pay the fee set forth in this Addendum (“RDW Fee”).  The RDW Program is not insurance. Pursuant to the RDW Program, however, Lessor will agree to waive its right to recover from Lessee for damage to the Equipment for which Lessee is responsible except as follows: Lessee shall be and remain responsible for payment of:

(A) the RDW Fee; and

(B)(i) a deductible of $1,000 which shall apply to each item of Equipment except a deductible of $2,500 which shall apply to each item of Equipment while waterborne; or

(B)(ii) any loss or damage to the Equipment, including total loss, if the cost to repair the damage or replace the Equipment is less than the applicable deductible or any loss or damage to the Equipment, including total loss, attributable to, resulting from, or caused by an exclusion or other limitation under the RDW Program.

RDW limits are $500,000 limit each item of Equipment unless waterborne; and $25,000 limit each item of Equipment while waterborne.

Under all circumstances, the RDW Program does not apply to, and therefore does not cover, loss or damage to the Equipment resulting from:

(1) The Equipment being used for a purpose for which it was not designed;

(2) Loss, damage or failure of any tires, tubes or wheels caused by blowout, punctures or any other circumstances; (3) Normal wear and tear, mechanical, structural or electrical breakdown;

(4) Loss caused by criminal, fraudulent, dishonest or illegal acts by Lessee or Lessee’s employees or agents;

(5) Breach of the Agreement by Lessee;  

(6) Loaning of Equipment to others;

(7) Missing property where the only proof of loss is unexplained or mysterious disappearance or any other instance where there is no physical evidence to indicate what happened to the Equipment;

(8) Voluntary parting of Equipment due to fraudulent scheme, trick or false pretense;

(9) Contamination or deterioration including corrosion, decay, fungus, mildew, mold, virus, bacteria, rot, or rust;

(10) Seizure, confiscation, destruction or quarantine of property by civil authority;

(11) Loss caused by war, civil war, insurrection, rebellion, revolution or military action;

(12) Failure to perform normal periodic and other basic maintenance, service, adjustments, and lubrication of the Equipment pursuant to the manufacturer’s specifications;

(13) The use or operation of the Equipment in violation of any law, rule, legislation, statute, regulation, code or any other legal authority;

(14) Damage to motors, other electrical appliances or devices resulting from artificially generated currents;

(15) Loss caused by or resulting from a nuclear reaction, nuclear radiation or radioactive contamination whether controlled or uncontrolled, caused by natural, accidental, or artificial means;

(16) Use of the Equipment while waterborne if the value of the Equipment exceeds $25,000.00;

(17)Any loss or damage to Equipment in excess of $500,000.00 regardless of cause;

(18) Use or storage of Equipment  while underground or while being used in strip or underground mining operations;

(19) Abuse or intentional misuse of the Equipment;

(20) Any loss or damage caused by the release, discharge, seepage, migration, dispersal or escape of pollutants; and/or

(21) Any loss or damage caused by dryness, humidity, or changes in extreme temperature;

(22) Any loss or damage while being used in logging or pulpwood operations;

(23) Any loss of damage caused by actual or threatened discharge, dispersal, seepage, migration, release, escape or application of any pathogenic or poisonous biological or chemical material;

(24) Any delay, loss of use, loss of market or consequential loss.

A complete copy of Lessor’s RDW policy is available here.