Commercial Crime Coverage & Bonds Flashcards
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.
Commercial Crime
The _______ is similar to the Occurrence Form in general liability insurance.
Loss Sustained Form
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.
1 year
The _______ is similar to the Claims-Made Form in general liability insurance.
Discovery Form
It covers losses that occurred between the _______ and end of the policy period.
retroactive date
Those losses must be discovered during the policy period or during the _______.
extended reporting period
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.
employee benefit plans
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.
Burglary
Burglarizing a safe or vault is known as _______.
safe burglary
_______ 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.
robbery
_______ is the broadest term for any unlawful taking of property.
theft
If the property is lost due to a _______, meaning the cause is unknown, that loss is often excluded from Crime policies.
mysterious disappearance
The forms offer eight primary Crime coverages, known as _______.
Insuring Agreements
_______ coverage is the only Insuring Agreement that protects against theft, including forgery, committed by an employee.
Employee Theft
An employee is a person who is compensated and directed by the insured. A person terminated from employment is still considered an employee for _______.
30 days
Coverage against employee theft will not cover losses that can only be proved by a(n) _______.
inventory computation
Other exclusions include losses resulting from trading, or losses resulting from a fraudulent signing, issuing, or cancelling of a(n) _______.
warehouse receipt
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.
Forgery or Alteration
Forged money orders or counterfeit money used to pay for merchandise would be covered by the _______ Insuring Agreement.
Money Orders and Counterfeit Money
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.
Inside the Premises – Theft of Money and Securities
Specific types of losses to property other than money and securities while they are inside the premises are covered by the _______ Insuring Agreement.
Inside the Premises – Robbery or Safe Burglary of Other Property
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.
custodian
The _______ Insuring Agreement covers the theft, disappearance, or destruction of money or securities and robbery losses of other property while away from the premises.
Outside the Premises
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.
messenger
All three of these coverages exclude vandalism and _______ losses.
accounting error
Losses to property in _______ are also excluded.
vending machines
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.
Computer Fraud
This coverage will not protect the insured against _______ or other computer damage, which would need separate insurance.
Computer Viruses
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.
Funds Transfer Fraud
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.
Extortion – Commercial Enterprises
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.
Guests’ Property
The Insuring Agreements will not cover dishonest acts committed by the _______.
named insured
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.
ends
Other exclusions include _______, war, and pollution.
government action
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.
compensatory damages
Expenses related to _______ are also not covered.
legal actions
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.
No lapse coverage
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.
Automatically covered
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.
Principal
This ultimately benefits the _______, who either receives the fulfilled obligation or the amount listed on the bond.
obligee
If the principal is unable to fulfill the obligation or pay the bond, the _______ pays it and is reimbursed by the principal.
surety
_______ are protect employers from direct loss due to dishonest or fraudulent acts by employees, such as employee theft.
Fidelity bonds
_______ guarantee that a specific obligation or performance is fulfilled.
Surety bonds
_______ guarantee someone, like a contractor or subcontractor, performs according to a contract. Examples include bid bonds, performance bonds, and labor and materials bonds.
Contract bonds
_______ are required by courts to enforce certain behaviors related to legal action.
court bonds
This includes the payment of legal costs (judicial bonds) and the faithful performance by executors appointed to care for another’s property (_______).
fiduciary bonds
_______ are required by municipalities or other public bodies before issuing a license or permit.
License and permit bonds
_______ are used to guarantee certain officials being sworn in to public office will perform according to law.
Public official bonds
