Commercial Crime Coverage & Bonds

Question 1

Crime insurance has separate forms for _______ coverages, which are the forms intended for private businesses, and Government Crime coverages, which are designed for government entities. Both of these enterprises have the same two coverage form options.

Answer 1

Commercial Crime

Question 2

The _______ is similar to the Occurrence Form in general liability insurance.

Answer 2

Loss Sustained Form

Question 3

It covers losses that took place during the policy, as long as the losses were discovered either during the policy period or within _______ of policy termination.

Answer 3

1 year

Question 4

The _______ is similar to the Claims-Made Form in general liability insurance.

Answer 4

Discovery Form

Question 5

It covers losses that occurred between the _______ and end of the policy period.

Answer 5

retroactive date

Question 6

Those losses must be discovered during the policy period or during the _______.

Answer 6

extended reporting period

Question 7

The period is typically the 60-day period after policy termination, but losses relating to _______ may be discovered up to 1 year after policy termination.

Answer 7

employee benefit plans

Question 8

Regardless of the form, all Crime policies insure against certain dishonest acts. _______ is the taking of property by a person who leaves visible signs of forced entry or exit into the premises.

Answer 8

Burglary

Question 9

Burglarizing a safe or vault is known as _______.

Answer 9

safe burglary

Question 10

_______ is when a person unlawfully takes property from someone who they have harmed or threatened with harm, or when a person unlawfully takes property while in the presence of someone.

Answer 10

robbery

Question 11

_______ is the broadest term for any unlawful taking of property.

Answer 11

theft

Question 12

If the property is lost due to a _______, meaning the cause is unknown, that loss is often excluded from Crime policies.

Answer 12

mysterious disappearance

Question 13

The forms offer eight primary Crime coverages, known as _______.

Answer 13

Insuring Agreements

Question 14

_______ coverage is the only Insuring Agreement that protects against theft, including forgery, committed by an employee.

Answer 14

Employee Theft

Question 15

An employee is a person who is compensated and directed by the insured. A person terminated from employment is still considered an employee for _______.

Answer 15

30 days

Question 16

Coverage against employee theft will not cover losses that can only be proved by a(n) _______.

Answer 16

inventory computation

Question 17

Other exclusions include losses resulting from trading, or losses resulting from a fraudulent signing, issuing, or cancelling of a(n) _______.

Answer 17

warehouse receipt

Question 18

The _______ Insuring Agreement insures against any forgery or alteration of checks, drafts, or similar directions to pay a sum of money. Forgery refers to signing another person’s name with intent to deceive.

Answer 18

Forgery or Alteration

Question 19

Forged money orders or counterfeit money used to pay for merchandise would be covered by the _______ Insuring Agreement.

Answer 19

Money Orders and Counterfeit Money

Question 20

Any kind of theft to money or securities that takes place inside the insured’s premises is covered by the _______ Insuring Agreement. It includes coverage for damages to the premises or its exterior during the actual or attempted theft, as well as losses to locked safes, vaults, cash registers, and similar items.

Answer 20

Inside the Premises – Theft of Money and Securities

Question 21

Specific types of losses to property other than money and securities while they are inside the premises are covered by the _______ Insuring Agreement.

Answer 21

Inside the Premises – Robbery or Safe Burglary of Other Property

Question 22

This will only cover the actual or attempted robbery of a _______, who is the insured or their employee who has care and custody of property inside the premises, and burglary of other property from a safe.

Answer 22

custodian

Question 23

The _______ Insuring Agreement covers the theft, disappearance, or destruction of money or securities and robbery losses of other property while away from the premises.

Answer 23

Outside the Premises

Question 24

The money, securities, or other property must be in the care of an armored car service or a _______, who is the insured or their employee who has care and custody of property while outside the premises.

Answer 24

messenger

Question 25

All three of these coverages exclude vandalism and _______ losses.

Answer 25

accounting error

Question 26

Losses to property in _______ are also excluded.

Answer 26

vending machines

Question 27

Fraudulent acts committed on a computer to transfer money, securities, or other property from the insured’s premises or bank are covered by the _______ Insuring Agreement.

Answer 27

Computer Fraud

Question 28

This coverage will not protect the insured against _______ or other computer damage, which would need separate insurance.

Answer 28

Computer Viruses

Question 29

Losses resulting from instructions (other than computer instructions) to the insured’s bank to transfer funds without the insured’s consent is covered by the _______ Insuring Agreement.

Answer 29

Funds Transfer Fraud

Question 30

Other crime coverages are available by endorsement. The _______ Endorsement covers losses resulting from the surrender of money, securities, or other property resulting from a threat of bodily harm to property damage to the premises.

Answer 30

Extortion – Commercial Enterprises

Question 31

The _______ Endorsement covers losses to the property of a guest while it is in a safe deposit box inside the insured’s premises or otherwise in the insured’s premises or possession.

Answer 31

Guests’ Property

Question 32

The Insuring Agreements will not cover dishonest acts committed by the _______.

Answer 32

named insured

Question 33

As soon as the named insured learns of any theft or dishonest act committed by an employee, even acts committed before becoming employed by the named insured, coverage _______ for that employee.

Answer 33

ends

Question 34

Other exclusions include _______, war, and pollution.

Answer 34

government action

Question 35

Though Crime policies pay _______ arising directly from a covered loss, coverage is not provided for indirect losses, like loss of income or costs to establish the existence or amount of loss.

Answer 35

compensatory damages

Question 36

Expenses related to _______ are also not covered.

Answer 36

legal actions

Question 37

The forms contain a number of important conditions. If a policy written on the Loss Sustained Form is used to replace a previous policy, with _______ in coverage, the current policy will pay for losses that occurred during the previous policy’s period.

Answer 37

No lapse coverage

Question 38

Additional premises or employees acquired during the policy period are _______ with no increase in premium or notice requirement, except that premises and employees acquired during a consolidation or merger are covered for 90 days and the insurer must be notified as soon as possible in order to extend coverage.

Answer 38

Automatically covered

Question 39

Bonds are an alternative to insurance. Importantly, with bonds, the person obtaining the bond as a promise to fulfill an obligation, known as the _______, retains the risk of loss.

Answer 39

Principal

Question 40

This ultimately benefits the _______, who either receives the fulfilled obligation or the amount listed on the bond.

Answer 40

obligee

Question 41

If the principal is unable to fulfill the obligation or pay the bond, the _______ pays it and is reimbursed by the principal.

Answer 41

surety

Question 42

_______ are protect employers from direct loss due to dishonest or fraudulent acts by employees, such as employee theft.

Answer 42

Fidelity bonds

Question 43

_______ guarantee that a specific obligation or performance is fulfilled.

Answer 43

Surety bonds

Question 44

_______ guarantee someone, like a contractor or subcontractor, performs according to a contract. Examples include bid bonds, performance bonds, and labor and materials bonds.

Answer 44

Contract bonds

Question 45

_______ are required by courts to enforce certain behaviors related to legal action.

Answer 45

court bonds

Question 46

This includes the payment of legal costs (judicial bonds) and the faithful performance by executors appointed to care for another’s property (_______).

Answer 46

fiduciary bonds

Question 47

_______ are required by municipalities or other public bodies before issuing a license or permit.

Answer 47

License and permit bonds

Question 48

_______ are used to guarantee certain officials being sworn in to public office will perform according to law.

Answer 48

Public official bonds