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CPCU 551 Chapter 9

Chapter 9 notes

QuestionAnswer
How many insuring agreements are there in the ISO Commercial Crime Coverage Form? 8
List the 8 insuring agreements in commercial crime coverage form? Employee Theft, Forgery, Theft of Money or Securities (inside), Roberty of Safe Burglary, Outside the Premises, Computer Fraud, Funds Transfer Fraud, Money Orders and Counterfeit Money.
How is employee defined in crime coverage? Currently employed or ended within 30 days, compensated, subject to control of the insured.
What three conditions apply to employee theft? 1) Right of insurer to terminate coverage of employee who has committed dishonest act. 2) Territory (extends coverage for 90 days for employee out of country) 3) Employee Benefit Plans
What is the limit for computer fraud? $5,000.00
List the 6 additional insuring agreements that can be added to crime coverage? Lesees of safe deposit boxes, Securities deposited with others, Guests Property, Destruction of Electronic Data, Unauthorized Reproduction of Software, Kidnap Ransom and extortion
Under commercial crime coverage and an insured list a separate limit of insurance for each of the eight agreements? Yes
List the general exclusions in commercial crime coverage? Acts committed by owners, Acts known about by owners, Acts committed by employees, Confidential Information, Govenment Action, Indirect Loss, Legal Fees
List the 3 exclusions applicable to employee theft? Inventory Shortages, Trading, Warehouse Receipts
Name the two versions of the iso crime coverage forms and policies? Loss Sustained and Discovery Version.
In order for a loss to be covered under a loss sustained form it must take place and be discovered during what? The policy period
How is discover defined? The time when an insured first becomes aware of facts that would cause a reasonable person to assume a loss has occurred.
What does not have to happen for a loss to still be discovered? The amount of the loss and details do not need to be known. Suspicion however is not enough.
Which type of insurance is affected most by the criteria of loss sustained and discovered language? Employee theft because it can be awhile before noticed.
Name the differences between the loss sustained and discovery condition of "extended period to discover loss" on a canceled policy? Loss sustained is 1 year, discovery is 60 day. Employee benefit plan is 1 year for both.
How are losses sustained during a partly during prior policy year handled Insured will first settle loss during current year.
Name 3 conditions that apply to employee theft? Territory, Termination as to Any Employee, Employee Benefit Plans
Name the 4 conditions of the iso crime forms related the the interest of the insureds. Must be owned by the insured, owned by joint insureds, coverage for merged or acquired companies, Additional premises or employees added
Conditions Affecting Claim Handling Concealment or Fraud (coverage is void if committed), Cooperation, Deductibles apply, Duties must be met, Other Insurance, Records, Recoveries, Transfer of Rights, Valuation.
List duties that insured has to claims in event of a loss? Notify asap, submit to examination, produce records, sworn proof of loss in 120 days, cooperate with investigation, notify police.
Limitations when other insurance applies. If it is primary limited to pro rata share if conditions are terms are same. If not the same pays > of sum of limit of insurance and deductible of other or the deductible of this insurance.
How are recoveries handled if there is a recovery after loss is already paid? First recovery is made to insured to the amount of any excess loss that wasn't covered. Second insurer is paid up to amount it paid, Third insurer is reimbursed deductible, rest is distributed back to insured.
How is covered loss of money valued for settlement? Face Value
How are securities lossed valued at settlement? Market value at the close of business day the loss was discovered.
How is loss or damage to property valued at settlement? Replacement cost if replaced but will pay no more then the least of, the cost to replace with comparable quality, the amount actually spent to replace, limit of insurance.
The insurer does not pay until property is actually repaired or replaced if it is not it pays at? Actual cash value
The Government Crime Forms Differ from the ISO Crime Forms dealing with Alternative Employee Theft Insurance Agreement How? Each Govt forms contains two insuring agreements one per loss and one per employee.
The Government Crime Forms Differ from the ISO Crime Forms dealing with Territory Coverage How? Canada is not included. Forgery, Alteration of Computer Fraud however are worldwide coverage.
The Government Crime Forms Differ from the ISO Crime Forms dealing with termination as to any employee condition how? Supervisors whom know of dishonest act are included if not terminated vs. just the employee with iso form.
What 2 additional exclusions apply to govt crime forms? Loss caused by individual required to be bonded, any treasurer or tax collector.
Created by: GARYSCHILD