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<div align="justify" style="font-size: 10pt; margin-top: 10pt"><b>Note 1. Accounting Policies</b>
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<div align="justify" style="font-size: 10pt; margin-top: 10pt">The accompanying interim consolidated financial statements are unaudited and reflect all
adjustments which, in the opinion of management, are necessary to fairly present the results of
The Navigators Group, Inc. and its subsidiaries for the interim periods presented on the basis of
United States generally accepted accounting principles (“GAAP” or “U.S. GAAP”). All such
adjustments are of a normal recurring nature. All significant intercompany transactions and
balances have been eliminated. The preparation of these financial statements requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial statements and the
reported revenues and expenses during the reporting periods. The results of operations for any
interim period are not necessarily indicative of results for the full year. The term “the
Company” as used herein is used to mean The Navigators Group, Inc. and its subsidiaries, unless
the context otherwise requires. The term “Parent” or “Parent Company” are used to mean The
Navigators Group, Inc. without its subsidiaries. These financial statements should be read in
conjunction with the consolidated financial statements and notes contained in the Company’s 2010
Annual Report on Form 10-K. Certain amounts for the prior year have been reclassified to conform to the current year’s presentation.
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<!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis element may be used to describe all significant accounting policies of the reporting entity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 22
-Paragraph 8
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