Special Fail-Safe Coverage Provision Sample Clauses
The Special Fail-Safe Coverage Provision is a contractual clause designed to provide additional protection or coverage in the event that standard policy terms fail to address a specific risk or loss. Typically, this provision activates when unforeseen circumstances arise that are not explicitly covered under the main agreement, ensuring that the insured party is not left without recourse. For example, if a policyholder encounters a unique loss scenario not contemplated by the original policy, this clause may extend coverage to fill that gap. Its core practical function is to serve as a safety net, mitigating the risk of uncovered losses and ensuring comprehensive protection for the parties involved.
Special Fail-Safe Coverage Provision. Instead of applying the Fail-Safe Coverage Provision based on Category 1 and Category 2 Employees, the Employer may elect under Part 13, #56.b.(2) of the Nonstandardized Agreement [Part 13, #74.b.(2) of the Nonstandardized 401(k) Agreement] to eliminate the allocation conditions beginning with the otherwise Eligible Participant(s) (who are Nonhighly Compensated Employees and who did not terminate employment during the Plan Year with 500 Hours of Service or less) with the lowest Included Compensation and continuing with such otherwise Eligible Participants with the next lowest Included Compensation until the ratio percentage test is satisfied. If two or more otherwise Eligible Participants have the same Included Compensation, the allocation conditions will be eliminated for all such individuals.