Commercial Crime Policy
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Theft is a very broad term that includes any type of stealing or attempted stealing.
Burglary is traditionally defined as the theft of property from within a premises by a person who forcibly enters the premises with the intent to commit a crime.
Robbery is a theft during which force is used or threatened. Picture a typical holdup or armed robbery.
Loss Sustained Coverage
Loss sustained coverage applies to loss that occurs during the policy period and is discovered within one year after the policy period ends.
Discovery Based Coverage
Discovery-based coverage applies to loss that is discovered during the policy period or within 60 days after the policy period ends (within a year for employee benefit plans), regardless of whether the loss occurs during the policy period.
Employee Theft Coverage
excluded from most business policies; most important and complex of crime coverages.
Covered property under the employee theft insuring agreement is money, securities, and other property. "Other property" is defined in each of the forms as "tangible property other than money and securities that has intrinsic value." Data and computer programs are specifically excluded from the definition of "other property."
Covered Cause of Loss
applies to loss of or damage to covered property resulting directly from theft committed by an employee including forgery.
Prior Dishonesty Provision
All forms exclude employee theft loss caused by a dishonest employee once that individual's dishonesty is known to the insured.
Exployee Theft Exclusions in Commercial Crime Forms
- Three exclusions apply only to coverage under the employee theft insuring agreement.
- The inventory shortages exclusion precludes coverage for claims that are based solely on inventory computation or profit and loss figures. The reason for this exclusion is that inventory shortages can be the result of causes other than employee theft. However, inventory records can be used to support the amount of loss claimed if the insured establishes, without reliance on this information, that a loss has occurred.
- The trading exclusion eliminates coverage for "loss resulting directly or indirectly from trading, whether in your name or in a genuine or fictitious account."
- The warehouse receipts exclusion eliminates coverage for "loss resulting from fraudulent or dishonest signing, issuing, canceling or failing to cancel, a warehouse receipt or any papers connected with it."
Exclusions for All Crime Policies
- Dishonest Acts of the Named Insured, Partners, or Members
- Dishonest Acts of Employees Learned of by You Prior to the Policy Period
- Acts of Employees, Managers, Directors, Trustees, or Representatives
- Confidential Information
- Indirect Loss
- Legal Fees, Costs, and Expenses
- Other Exclusions
Additional Government Exclusions
- loss caused by employees that are required by law to be individually bonded
- loss caused by treasurers or tax collectors
Forgery or Alteration Insuring Agreement
Forgery or alteration coverage protects an insured against loss due to the forgery or alteration of checks, bank drafts, promissory notes, and similar documents drawn on the insured's bank account.
Inside the Premises- Theft of Money & Securities
applies only to theft committed by a person who is physically present inside the insured's premises or a banking premises. It covers not only theft, but also the disappearance or destruction of money and securities from within the insured's premises or from within any banking premises or similar safe depository.
Inside the Premises- Theft of Money & Securities Exclusions
- accounting or arithmetical errors or omissions
- exchanges or purchases
- motor vehicles and their equipment or accessories
- money-operated devices
- transfer or surrender of property
- voluntary parting of title to or possession of property
Inside the Premises- Robbery or Safe Burglary of Other Property
covers loss to other property from actual or attempted robbery of a custodian inside the premises and actual or attempted safe burglary.
Outside the Premises Insuring Agreement
- This insuring agreement provides the following coverages-
- theft, disappearance, or destruction of money and securities while outside the premises in the custody of a messenger or an armored motor vehicle company; and
- loss or damage to property other than money and securities in the custody of a messenger or an armored motor vehicle company resulting from actual or attempted robbery.
Computer Fraud Insuring Agreement
This insuring agreement covers the loss of money, securities, and other property caused by the use of a computer to fraudulently transfer covered property from inside the insured's premises or a banking premises to a person or place outside those premises.
Computer Fraud Exclusions
- credit card transactions
- inventory shortages
- funds transfer fraud
Funds Transfer Fraud
The funds transfer fraud insuring agreement provides coverage for loss of money and securities resulting from the payment or transfer of funds from the insured's financial accounts on the basis of fraudulent instructions to a bank or other financial institution.
Money Orders & Counterfeit Money Insuring Agreement
This insuring agreement provides coverage for loss caused by acceptance of counterfeit money and money orders issued by a post office, express company, or bank that are not paid on presentation.
Lessees of Safe Deposit Boxes (CR 04 09) Endorsement
This endorsement is used to cover an insured’s property that is kept in a safe deposit box in a bank or other depository premises.
Securities Deposited with Others (CR 04 10) Endorsement
- provides coverage for theft, disappearance, or destruction of securities deposited with others
- while the securities are anywhere inside a named custodian's premises;
- while the securities are being transported outside the custodian's premises by the custodian or an employee of the custodian; and
- while the securities are on deposit by the custodian with a named depository for safekeeping.
Guests' Property (CR 04 11) Endorsement
- This endorsement is designed to protect an insured—such as a hotel, motel, hospital, or nursing home— that has guests staying on its premises. It covers the insured's legal liability for damage to guests' property while it is
- in safe deposit boxes in the insured's business premises;
- or inside the insured's premises or in the insured's possession.
Extortion—Commercial Entities (CR 04 03)
This endorsement provides commercial entities with protection against kidnap and ransom losses.
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