CPCU 551 Flashcards – Module 9
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[h] CPCU 551 – Module 9
[q] Discovery crime form
[a] A type of commercial crime form that covers losses that are discovered during the policy period even though they may have actually occurred prior to the policy period.
[q] Loss sustained crime form
[a] A type of commercial crime form that covers losses that are actually sustained during the policy period, provided they are discovered no more than one year after the expiration of the policy.
[q] ISO commercial crime coverage forms
[a] Insurance designed to provide crime coverage for any type of nongovernment commercial or not-for-profit entity other than a financial institution.
[q] Financial institution bond
[a] An insurance policy that covers the crime loss exposures of financial institutions.
[q] Organizations eligible to be insured under financial institution bonds
[a] Eligible organizations include:
Banks, savings and loans.
Credit unions.
Finance companies.
Insurance companies.
[q] Employee Theft insuring agreement
[a] An ISO Commercial Crime Coverage Form insuring agreement that covers an employer against theft by its own employees. Theft is the unlawful taking of money, securities, or other property. Coverage is also provided for forgery committed against the insured by the insured’s employees.
[q] Employee Theft insuring agreement definition of employee
[a] A natural person (not a corporation):
Currently employed by the insured or was employed by the insured in the past 30 days.
Compensated by the insured by salary, wages, or commissions.
Subject to the control of the insured.
[q] Forgery or Alteration insuring agreement
[a] An ISO Commercial Crime Coverage Form insuring agreement that provides worldwide coverage for losses resulting from forgery or alteration of checks and similar instruments.
[q] Inside the Premises – Theft of Money and Securities insuring agreement
[a] An ISO Commercial Crime Coverage Form insuring agreement that covers money and securities (inside either the premises or a financial institution) against theft, disappearance, or destruction. Loss or damage to the premises is also covered by the agreement if the insured is the owner or is liable for the damage.
[q] Inside the Premises – Robbery or Safe Burglary of Other Property insuring agreement
[a] An ISO Commercial Crime Coverage Form insuring agreement that covers other property from actual robbery of a custodian and safe burglary.
[q] Robbery
[a] The unlawful taking of property if the person taking the property has caused or threatened to cause bodily harm.
[q] Outside the Premises insuring agreement
[a] An ISO Commercial Crime Coverage Form insuring agreement that covers money, securities, and other property while outside the premises, while in the custody of either a messenger or an armored vehicle company. Money and securities are covered against theft, disappearance, or destruction. Other property is covered against actual or attempted robbery.
[q] Computer and Funds Transfer Fraud insuring agreement
[a] An ISO Commercial Crime Coverage Form insuring agreement that provides worldwide coverage for losses resulting from fraudulent entry of electronic data into a computer system or fraudulent instruction directing a financial institution to debit the named insured’s account.
[q] Money Orders and Counterfeit Money insuring agreement
[a] An ISO Commercial Crime Coverage Form insuring agreement that covers loss from money orders that are not paid when presented or counterfeit money the insured has accepted in good faith in exchange for merchandise, money, or services.
[q] Employee Theft definition of occurrence
[a] A definition of occurrence that requires the act be committed by an employee acting alone or in collusion with others.
[q] Forgery or Alteration definition of occurrence
[a] A definition of occurrence that requires the act be committed by a person acting alone or in collusion and must involve an instrument.
[q] Inside the Premises – Robbery or Safe Burglary of Other Property special limit of insurance
[a] Limit of $5,000 per occurrence for precious metals, pearls, and furs or for manuscripts and records that might be costly to reproduce.
[q] Acts Committed by You, Your Partners or Your Members exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that eliminates coverage for loss resulting from theft or any other dishonest act committed by the named insured or their partners.
[q] Acts Committed by Your Employees Learned of by You Prior to the Policy Period exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that eliminates coverage if insured knew the employee had committed theft or a dishonest act before the policy’s effective date.
[q] Acts Committed by Your Employees, Managers, Directors, Trustees or Representatives exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that excludes loss as a result of acts committed by employees or authorized representatives. This exclusion does not apply to the Employee Theft insuring agreement.
[q] Governmental Action exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that excludes loss resulting from the seizure or destruction of property by order of a government authority.
[q] Indirect Loss exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that excludes coverage for indirect losses, such as business income losses, liability losses, and expenses incurred in establishing either the existence or the amount of loss.
[q] Legal Fees, Costs and Expenses exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that excludes coverage for fees, except when covered under the Forgery and Alteration insuring agreement.
[q] Nuclear Hazard exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that eliminates coverage for loss or damage caused by any nuclear reaction, radiation, or radioactive contamination.
[q] Pollution exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that eliminates coverage for any loss or damage that results from pollution.
[q] War and Military Action exclusion
[a] A general exclusion applicable to any of the crime insuring agreements that eliminates coverage for loss or damage resulting from war.
[q] Inventory Shortages exclusion
[a] An exclusion applicable to the Employee Theft insuring agreement that excludes losses that depend on inventory calculations to prove either the existence or the amount of the loss.
[q] Trading exclusion
[a] An exclusion applicable to the Employee Theft insuring agreement that excludes losses from unauthorized trading in securities.
[q] Warehouse Receipts exclusion
[a] An exclusion applicable to the Employee Theft insuring agreement that eliminates coverage for losses resulting from fraudulent or dishonest signing or issuing of a warehouse receipt.
[q] Accounting or Arithmetical Errors or Omissions exclusion
[a] An exclusion applicable to the Inside the Premises or Outside the Premises insuring agreements that excludes coverage for losses resulting from accounting or arithmetical error or omissions.
[q] Exchanges or Purchases exclusion
[a] An exclusion applicable to the Inside the Premises or Outside the Premises insuring agreements that excludes coverage for losses resulting from giving property in an exchange.
[q] Fire exclusion
[a] An exclusion applicable to the Inside the Premises or Outside the Premises insuring agreements that excludes coverage for losses resulting from a fire. This exclusion does not apply to money or securities.
[q] Money Operated Devices exclusion
[a] An exclusion applicable to the Inside the Premises or Outside the Premises insuring agreements that excludes coverage for loss of property from money-operated devices.
[q] Motor Vehicles or Equipment and Accessories exclusion
[a] An exclusion applicable to the Inside the Premises or Outside the Premises insuring agreements that excludes coverage for loss to vehicles.
[q] Vandalism exclusion
[a] An exclusion applicable to the Inside the Premises or Outside the Premises insuring agreements that eliminates coverage for damage by vandalism or malicious mischief.
[q] Voluntary Parting With Title to or Possession of Property exclusion
[a] An exclusion applicable to the Inside the Premises or Outside the Premises insuring agreements that eliminates coverage when the insured or an agent of the insured is tricked into voluntarily surrendering property to a thief.
[q] Authorized Access exclusion
[a] An exclusion applicable to the Computer and Funds Transfer Fraud insuring agreement that excludes coverage for loss resulting from fraudulent entry to electronic data.
[q] Credit Card Transactions exclusion
[a] An exclusion applicable to the Computer and Funds Transfer Fraud insuring agreement that excludes coverage for loss from the use of credit or debit cards.
[q] Exchanges or Purchases exclusion
[a] An exclusion applicable to the Computer and Funds Transfer Fraud insuring agreement that excludes coverage for loss resulting from the surrendering of property in any exchange or purchase.
[q] Fraudulent Instructions exclusion
[a] An exclusion applicable to the Computer and Funds Transfer Fraud insuring agreement that excludes coverage for loss from an employee or financial institution acting upon a fraudulent instruction.
[q] Inventory Shortages exclusion
[a] An exclusion applicable to the Computer and Funds Transfer Fraud insuring agreement that excludes coverage for losses from inventory shortages.
[q] Ownership of Property; Interests Covered condition
[a] A commercial crime condition that indicates the insurance applies only to property owned, held, or leased by the insured, or property the insured is legally liable for.
[q] Joint Insured condition
[a] A commercial crime condition that appoints the first named insured as agent for all other insureds.
[q] Consolidation – Merger or Acquisition condition
[a] A commercial crime condition that indicates if the insured acquires additional employees or premises by consolidation, merger, or acquisition, coverage is extended to the new employees or premises for 90 days.
[q] Loss Sustained During Prior Insurance condition
[a] A commercial crime condition in which the insurer agrees to pay a loss that meets the following requirements:
Loss is discovered during the policy period.
Current insurance became effective when prior insurance was terminated.
Loss would have been covered by the present insurance if it had been in force at the time.
Loss occurred while prior insurance, issued by another insurer or same insurer, was in effect.
[q] Duties in the Event of Loss condition
[a] A commercial crime condition that requires the insured to:
Notify the insurer as soon as possible.
Notify the police if the loss involves a violation of law.
Submit to an exam under oath if requested.
Produce all pertinent records for the insurer.
Submit a sworn proof of loss within 120 days.
Cooperate with the insurer.
[q] Termination as to Any Employee condition
[a] A commercial crime condition of the Employee Theft insuring agreement that automatically terminates employee theft coverage for any employee who has committed a dishonest act.
[q] Employee Benefit Plans condition
[a] A commercial crime condition of the Employee Theft insuring agreement that explains how employee theft coverage applies when the policy includes one or more benefit plans as insureds.
[q] Clients’ Property endorsement
[a] An endorsement that modifies various commercial crime provisions to cover theft of money, securities, or other property belonging to a client of the insured by an employee of the insured.
[q] Guests’ Property endorsement
[a] A crime coverage endorsement that is designed for hotels and motels. It covers liability for property loss sustained by their guests.
[q] Extortion endorsement
[a] A commercial crime endorsement that covers the surrender of money, securities, or other property, provided the surrender is the result of a threat communicated to the insured to cause bodily harm to persons who have been captured.
[q] Inside the Premises – Theft of Other Property endorsement
[a] A commercial crime endorsement that covers theft (as opposed to being limited to covering robbery and safe burglary).
[q] Employee Theft – Name or Position Schedule endorsement
[a] A commercial crime endorsement that limits coverage to theft committed by an employee whose name or position is specifically listed in the policy.
[q] Lessees of Safe Deposit Boxes endorsement
[a] A commercial crime endorsement that enables a customer to insure property kept in a safe deposit box on the premises of a bank.
[q] Securities Deposited With Others endorsement
[a] A commercial crime endorsement that enables the owner of securities to insure them while they are in a custodian’s possession.
[q] Destruction of Electronic Data or Computer Programs endorsement
[a] A commercial crime endorsement that covers costs to restore data stored in the insured’s computer system.
[q] Unauthorized Reproduction of Computer Software by Employees endorsement
[a] A commercial crime endorsement that protects the insured from fines for the unauthorized reproduction of computer software.
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