Unit 16-Crime Insurance Flashcards
TYPES OF CRIMES
Burglary is the taking or attempted taking of property from inside the premises by a person unlawfully entering or leaving the premises. Evidence of forcible entry or exit-such as marks made by tools, explosives, chemicals, or electricity–is required.
Safe burglary is the taking of property from within a locked safe or vault by a person unlawfully entering the safe or vault, as evidenced by marks of forcible entry on the exterior of the safe or vault. It also includes the taking of the entire safe or vault from inside the premises.
Robbery is the unlawful taking of property from the care and custody of another person. The robber
must have caused or threatened to cause bodily harm to the person being robbed, or must have committed an obviously unlawful act that is witnessed by the person being robbed.
Theft means the unlawful taking of property. This broad term includes burglary, safe burglary, and robbery. However, unlike burglary, safe burglary, and robbery, which involve the use of force, theft also includes the taking of property by stealth (action designed to escape notice, like shoplifting).
Forgery is signing the name of another person or organization with the intent to deceive.
Mysterious disappearance is defined as property of the insured which has vanished with no explanation. This is the only definition listed that does not involve theft. Theft must be ruled out! The item is just gone with no explanation as to where it is.
Other definitions (possessions)
A custodian is someone who has care or custody ot property inside the premises. It includes the insured, the insureds partners or members, or any emplovee. It does not include a watchperson or janitor.
A messenger is someone who has care and custody ot property while it is outside the premises. It can include the insured, a relative of the insured, the insured’s partners or members, or any employee. A messenger is acting on behalf of the insured/business.
A watchperson is someone retained specifically by the insured whose sole duty is to have care and custody of property inside the premises.
What is commercial crime insurance?
commercial crime insurance, which is insurance designed to protect businesses and government entities against property loss resulting from such crimes as burglary, robbery, theft, and employee dishonesty.
Crime coverage can be provided as a monoline policy or as part of a commercial package policy (CPP).
There are separate crime forms for commercial businesses and government entities.
Each crime form is available in two versions: the loss sustained form and the discovery form. The difference between the forms is what triggers coverage.
Lost Sustained Form
Crime insurance written under a loss sustained form covers losses that are sustained during the policy period and discovered either during the policy period or up to one year after the policy expires. This one-year discovery period terminates immediately when the insured obtains other commercial crime insurance.
Note that the policy does not extend coverage beyond the policy expiration date. Losses that occur after policy expiration will not be covered, but losses that occur during the policy period and are discovered
within one vear atter policy expiration are covered.
Discovery Form
Crime insurance written on a discovery basis covers losses that are sustained at any time and discovered either during the policy period or up to 60 days after the policy expires (up to one vear for losses related to emplovee benent plans.
A loss is discovered when the insured:
• first becomes aware that a loss has occurred or will occur, even if the actual amount of loss or details concerning the loss are not known; or
• gives notice of an actual or potential claim for a covered loss.
The extended periods to discover losses terminate immediately when the insured obtains other
commercial crime insurance.
Types of Commercial Crimes Form
The commercial crime forms include the following:
• Employee theft
• Forgery or alteration
• Inside the premises-theft of money and securities
• Inside the premises–robbery or safe burglary of other property
• Outside the premises
• Computer fraud
• Money orders and counterfeit money
• Funds transfer fraud
• Extortion–commercial entities
• Guests property
Employee Theft
Employee theft (also known as employee dishonesty) coverage pays for loss of or damage to money, securities, and other property resulting from theft or forgery committed by an employee, either acting alone or in collusion with others. Proof of loss may not be based on an inventory shortage or profit and loss computation.
There is no coverage tor:
• an employee who has previously had similar insurance canceled and not reinstated;
• loss resulting from trading, either in the insured’s name or in a genuine or fictitious account; or
• loss resulting from fraudulent or dishonest use of warehouse receipts.
There are three ways a business can cover employees for theft.
• Name scheduled- Employees are listed by name.
• Position scheduled-Only listed jobs within the business are covered, such as branch manager, accountant, etcetera. Employees occupying the covered positions are not listed.
• Blanket-All employees are covered.
Forgery or Alteration
Forgery or alteration coverage pays for loss resulting from forger y or alteration of checks, drafts, promissory notes, or similar instruments made, drawn by, or on the named insured or the insured’s agent. This includes documents that are forged or altered with a mechanically reproduced facsimile signature.
Coverage is provided worldwide.
Forgery or alteration excludes employee acts of dishonesty, as this would be covered under employee theft.
