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Commercial Crime Coverage Form Discovery and Loss Sustained Forms

Summary: The commercial crime discovery (CR 00 20 05 06) and loss sustained (CR 00 21 05 06) forms, are revisions of the earlier discovery (CR 00 20 07 02) and loss sustained (CR 00 21 07 02) forms. Many of the changes involve simple wording changes for clarification, but there are coverage expansions and restrictions, a new insuring agreement and new exclusions. The changes in the new policies are presented and discussed, and differences between forms are highlighted. In the conditions section the loss sustained form contains a new section on how the policy pays when loss is sustained during prior policy periods.

Topics covered: Introduction Insuring_Agreement_1—Employee Theft Insuring Agreement 2—Forgery or AlterationInsuring Agreement 3—Inside the Premises-Theft of Money and Securities Insuring Agreement 4—Inside the Premises-Robbery or Safe Burglary of Other Property Insuring Agreement 5—Outside the Premises Insuring Agreement 6—Computer Fraud Insuring Agreement 7—Funds Transfer Fraud Insuring Agreement 8—Money Orders and Counterfeit Money Limit of Insurance/Deductibles Exclusions Conditions Language Specific to Loss Sustained Form Only Definitions

Introduction

These policies contain eight insuring agreements, and coverage is provided under these agreements when a limit of insurance is listed in the Declarations. In the discovery form, the loss must arise from an occurrence and be discovered by the named insured during the policy period or during the extended period to discover loss. The extended period of loss is described in the conditions section E.1.g. The loss sustained form is worded differently because it provides coverage based on when the loss was sustained, not discovered. Coverage applies to loss sustained during the policy period except as provided in conditions E.1.k. and E.1.l.; these conditions will be reviewed in detail later in this discussion.

Insuring Agreement 1—Employee Theft

1.Employee Theft

We will pay for loss of or damage to “money”, “securities” and “other property” resulting directly from “theft” committed by an “employee”, whether identified or not, acting alone or in collusion with other persons.

For the purposes of this Insuring Agreement, “theft” shall also include forgery.

Analysis

The key points in this insuring agreement are the defined terms (especially “employee”), which will be discussed later in this article. This insuring agreement provides coverage in case an employee takes money, securities, or other property unlawfully from the insured, thereby depriving the insured of that item.

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