Chapter 20

Question 1

Safe burglary covers:

Select one:

a. $300 cash stolen by an employee when breaking into the safe.
b. A stolen safe.

Answer 1

The correct answer is: A stolen safe.

Question 2

The definition of a robbery includes:

Select one:

a. Breaking and entering
b. Felonious abstraction

Answer 2

The correct answer is: Felonious abstraction

Question 3

A business is unable to locate a weed sprayer last used the previous year. This is an example of:

Select one:

a. mysterious disappearance
b. burglary
c. robbery
d. theft

Answer 3

The correct answer is: mysterious disappearance

Question 4

A building insured under a Premises Burglary policy suffers a loss of $350 cash, $2,000 stock, and $10,000 lost profits due to a closure caused by the burglary. The Premises Burglary policy will pay:

Select one:

a. $350
b. $2,000
c. $10,000
d. $12,350

Answer 4

To cover theft of money, we need a TDD (Theft, Disappearance, and Destruction Policy), also known as an Inside the Premises, Theft of Money and Securities Policy. The lost profits would be covered by a Business Interruption Business Income Policy. So, we will cover the theft of stock. Under insurance concepts, stock refers to inventory. If the policy is referring to stock certificates, it will use the term “securities.”

The correct answer is: $2,000

Question 5

Which is a burglary?

Select one:

a. A thief breaks down a door after business hours and steals goods.
b. A customer steals a watch from an open display counter.

Answer 5

The correct answer is: A thief breaks down a door after business hours and steals goods.

Question 6

Under a crime policy, the insured who suffers a loss is required to:

Select one:

a. file a proof of loss form
b. file criminal charges against any suspect

Answer 6

The correct answer is: file a proof of loss form

Question 7

The section of the Employee Theft form which specifies the amount of the coverage is the:

Select one:

a. definitions
b. conditions
c. declarations
d. insuring agreement

Answer 7

The dollar amount of coverage (limit of Liability) is almost always found in the Declarations section of the policy.

The correct answer is: declarations

Question 8

Which of the following is considered to be a “custodian” under a commercial crime policy?

Select one:

a. watchperson
b. customer
c. janitor
d. owner, partner, employee, or manager

Answer 8

A “custodian” is someone authorized to regularly have custody of the goods on premises. The owners, partners, employees, and managers are all custodians. A watchperson or janitor would not be expected to have custody of the goods. If we have a jewelry store, we would be upset to find the janitor, watchperson, or customer with possession of the inventory. This subtle distinction is important in the robbery policy which covers robbery of a “custodian.”

The correct answer is: owner, partner, employee, or manager

Question 9

Which is a burglary?

Select one:

a. The clerk is thrown to the ground and money is taken from the clerk’s wallet.
b. The door on the building is forced open and property is taken after business hours.

Answer 9

The correct answer is: The door on the building is forced open and property is taken after business hours.

Question 10

A Money and Securities policy covers:

Select one:

a. cash stolen from the business
b. embezzlement by an employee
c. theft of merchandise by a customer
d. theft of merchandise by an employee

Answer 10

The Money and Securities policy covers cash stolen from the register. However, it excludes theft by an employee, and doesn’t cover merchandise at all.

The correct answer is: cash stolen from the business

Question 11

A commercial building was burglarized. In addition to damaging the building during the breakin, the burglars stole a computer, took cash and stock certificates, and vandalized the premises. The Inside the Premises - Robbery or Burglary of Other Property policy will pay for:

Select one:

a. The cash only
b. The vandalism and the cash
c. The damage plus the computer
d. The damage plus the computer plus the stock certificates

Answer 11

The correct answer is: The damage plus the computer

Question 12

The Inside the Premises –Theft of Money and Securities Form covers money:

Select one:

a. stolen by a corporate official.
b. stolen from a corporate board member.

Answer 12

This policy excludes theft by an insured’s employee. The policy to cover theft by a corporate official is the Employee Dishonesty Policy (Fidelity Bond).

The correct answer is: stolen from a corporate board member.

Question 13

Loss from a business without either a threat or breaking and entering is:

Select one:

a. mysterious disappearance
b. robbery

Answer 13

The correct answer is: mysterious disappearance

Question 14

The Inside the Premises - Robbery or Burglary of Other Property policy covers which of the following?

Select one:

a. damage to the building caused by the burglary
b. a burglary where a large amount of cash is stolen
c. employee theft of goods from the business
d. theft from a vehicle

Answer 14

Employee theft is covered by an Employee Dishonesty Policy or Fidelity Bond. The Inside the Premises - Burglary of Other Property Policy won’t cover money (get a TDD for that), and it won’t cover theft off premises, such as from a vehicle. So, our correct answer is that damage to the building caused by the burglar will be covered. However, any fire or vandalism would be covered by a property insurance policy, not by the crime policy.

The correct answer is: damage to the building caused by the burglary

Question 15

A Theft, Disappearance and Destruction form covers:

Select one:

a. A company’s money disappears.
b. A company’s stock plummets in value.

Answer 15

The correct answer is: A company’s money disappears

Question 16

The Inside the Premises - Robbery or Safe Burglary of Other Property form covers valuables stolen in which situation?

Select one:

a. a burglar guesses the safe’s combination
b. the safe’s combination was written on the back of the safe
c. there is visible damage to the safe
d. the safe is left open

Answer 16

The “Safe Burglary” part of the policy requires that there be a breaking into the safe (or the taking of the safe itself).

The correct answer is: there is visible damage to the safe

Question 17

Employee Dishonesty covers:

Select one:

a. Disappearance of inventory which can be proven only by a profit and loss computation.
b. Dishonest actions of the insured.
c. Disappearance of inventory which can be proven only by an inventory.
d. None of the above.

Answer 17

The Insurer under an Employee Dishonesty policy wants proof that a loss was actually caused by employee dishonesty. For that reason, the Insurer won’t pay claims based merely on an inventory loss or a profit and loss statement. Theft of money by an employee is covered by Employee Dishonesty, but not theft by the Insured.

The correct answer is: None of the above.

Question 18

The Inside the Premises - Robbery or Burglary of Other Property policy covers:

Select one:

a. fire damage to the building resulting from a burglary.
b. damage to the building resulting from a burglary.

Answer 18

The correct answer is: damage to the building resulting from a burglary.

Question 19

A Theft, Disappearance and Destruction policy sold to the owner of a car wash business covers:

Select one:

a. A bank erroneously balances the Insured’s checking account.
b. An employee who steals money from a bank deposit bag.
c. Money that is mysteriously missing from the business.
d. Money stolen from a change machine.

Answer 19

The old “Theft, Disappearance and Destruction Form,” now called the Inside the Premises - Theft of Money and Securities excludes money stolen from a vending machine, excludes employee theft, and excludes arithmetical errors. So, it will cover the mysterious disappearance of money or securities.

The correct answer is: Money that is mysteriously missing from the business.

Question 20

Employee theft of goods is covered by:

Select one:

a. premises burglary
b. fidelity bond

Answer 20

The correct answer is: fidelity bond

Question 21

“Theft” includes all of the following EXCEPT:

Select one:

a. shoplifting
b. mysterious disappearance
c. robbery
d. burglary

Answer 21

The correct answer is: mysterious disappearance

Question 22

The Inside the Premises - Robbery or Burglary of Other Property policy covers:

Select one:

a. theft from a trailer attached to the building
b. employee theft
c. damage to a wood door during the burglary
d. damage to the property by a fire started by the burglar

Answer 22

Fire or vandalism caused by the burglar will be covered under the Property Policy. The “Inside the Premises - Robbery or Burglary of Other Property policy” will cover the items stolen as well as the damage from the breakin but will not cover employee theft. We need an Employee Dishonesty Policy (Fidelity Bond) for to cover employee theft.

The correct answer is: damage to a wood door during the burglary

Question 23

A locked business is broken into and goods stolen. This is covered as a:

Select one:

a. robbery
b. burglary

Answer 23

The correct answer is: burglary

Question 24

Robbery is:

Select one:

a. taking property from a person by threat of violence
b. taking property from a locked safe

Answer 24

The correct answer is: taking property from a person by threat of violence

Question 25

The definition of theft includes:

Select one:

a. Embezzlement
b. Mysterious disappearance

Answer 25

The correct answer is: Embezzlement

Question 26

If a criminal hides in the business storeroom until closing, then steals merchandise and leaves through a fire door, this is an example of:

Select one:

a. mysterious disappearance
b. burglary
c. robbery
d. theft

Answer 26

There is no sign of damage from breaking in, or breaking out, so this would be an example of theft.

The correct answer is: theft

Question 27

Which will deter burglary losses?

Select one:

a. a crime insurance policy
b. workers compensation insurance
c. a watch person
d. a bonded employee

Answer 27

The correct answer is: a watch person

Question 28

The Inside the Premises - Robbery or Safe Burglary of Other Property form covers:

Select one:

a. money in the safe
b. damage to the safe during a burglary

Answer 28

The correct answer is: damage to the safe during a burglary

Question 29

Taking property by force or threat of violence is:

Select one:

a. burglary
b. theft
c. robbery
d. mysterious disappearance

Answer 29

Robberies involve threats or violence. Robbery is a type of theft, but robbery is the most specific answer. Burglaries do not involve a threat or violence. The term “theft” includes both robbery and burglary. If I have a “Theft Policy,” both robbery and burglary are covered. But If I have only a Robbery Policy or only a Burglary Policy, I have much narrower coverage.

The correct answer is: robbery

Question 30

Employee embezzlement of money is covered by:

Select one:

a. Employee Dishonesty Form
b. Theft, disappearance and destruction

Answer 30

The correct answer is: Employee Dishonesty Form

Question 31

Which policy covers the firm’s bank deposits stolen from the accountant’s office at night?

Select one:

a. Inside the Premises - Theft of Money and Securities
b. Inside the Premises - Robbery or Burglary of Other Property Form

Answer 31

The correct answer is: Inside the Premises - Theft of Money and Securities

Question 32

A burglary policy covers the felonious removal of property:

Select one:

a. from a locked building which is broken into.
b. from an unlocked building.

Answer 32

The Burglary Policy will only cover a theft (felonious abstraction) from the premises. There are special policies to cover theft away from the premises but the standard Burglary Policy only covers a burglary at the insured premises listed on the dec sheet.

The correct answer is: from a locked building which is broken into.