Section 3 - Crime Coverages and Endorsements Flashcards
Why Crime Coverage (3 Shortcomings of Special form property policies)
- Dishonesty Exclusion for named insureds and others in the organization
- Voluntary Parting / Unauthorized instruction exclusion
- Low limits for items such as fur, jewelry, patterns, dies, molds, stamps, tickets, letters of credit $2,500 or $250
Loss Sustained vs Discovery Form (2 Each)
Loss Sustained
- Occurrence must take place during the policy period AND
- The occurrence must be discovered by a designated person during the policy period or during the extended period to discover loss
Discovery Form
- The occurrence can take place at any time AND
- The occurrence must be discovered by a designated person during the policy period or during the extended period to discover loss
5 Different Types of “Designated People” to Discover the Loss
REEPH
- Risk Manager
- Elected Officer
- Employee Benefit Plan admin / Trustee
- Partner, LLC member, LLC manager, director, or trustee
- Highest ranking employee at a premise
What is the Extended Reporting Period to Discover a loss? (Loss Sustained Form) (2)
- One year following the cancellation or termination of a policy.
- Also applies when policy is still in effect, but coverage for a particular insured has been removed or when one of the coverages is removed.
3 Requirements for Replacing a Policy with ERISA Coverage (Both Loss Sustained and Discovery)
- At least as broad as the policy being replaced
- Has a limit at least equal to the limit required by ERISA
- Applies to losses sustained prior to its effective date
Loss Sustained Partly During This Insurance and Partly During Prior Insurance (Loss Sustained) (3)
- First settles the current term losses, then goes back to the prior insurance
- Pays Highest single limit applicable
- current policy’s deductible applies
Loss Sustained Entirely during Prior Insurance (3)
- Covered under current policy
- Pays the most recent prior term and then the terms before that
- Uses highest single limit applicable during period of loss and current deductible
Prior Insurance with a Different Carrier (3)
- Loss must be covered under current policy
- Lesser of the prior and current limit
- Current Deductbile Applies
3 Things to Do to Keep Best Coverage when renewing Crime Policy
- Stay Continuous
- Stay with the same insurer
- Don’t lower your limits
Extended Reporting Period for Loss Discovered Form
60 days following the Cancellation or Termination of a policy
3 Fidelity Insuring Agreements
- Employee Theft
- ERISA Plan Official Dishonesty
- Employee Theft of Client’s Property
What is Covered Property - Fidelity (3)
Money: Currency, coins, bank notes, travelers checks, money orders, deposits in accounts at any financial institute
Securities: Tokens, tickets, revenue and other stamps. Evidences of Debt issued in connection with credit or charged cards, which cards are not issued by you
Other Property: Tangible property other than money or securities that has intrinsic value. Doesn’t include computer programs, or electronic data
Does property have to be owned (Fidelity)
No it does not. Can be held by insured in any capacity and can apply if insured legally liable
Who can be the thief? (Fidelity) (8)
LEFT MIND
- Leased workers
- Employee Benefit plan natural persons
- Former employees, partners, LLC members or managers, directors or trustees retained by the insured as a consultant
- Temporary workers
- Merger or Acquisition natural persons employed by them prior to effective
- Interns and Guest students
- Natural persons whom the insured compensates and has the right to direct or control. Includes coverage for 30 days after service unless fired for dishonest, malicious acts
- Directors, trustees, or LLC managers performing acts within the scope of the duties of an employee or acting as a member of a committee to perform specific directorial acts on behalf of NI
What does employee theft include (2)
Loss or damage from employee committing theft, whether identified or not, or in collusion with others
Includes “forgery”
