Chapter 17: Commercial Crime Insurance

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Questions: 8 | Attempts: 536 | Updated: Mar 22, 2023

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Questions and Answers

1.

George Hawthorn is employed by Moison Appliances as a shipping clerk. As he is stacking TVs in the storage room, he is surprised by two men, both carrying guns. They proceed to empty the warehouse of TVs. This is an example of what?
- A.
  
  Burglary
- B.
  
  Robbery
- C.
  
  Mysterious disappearance
- D.
  
  A fidelity loss
Correct Answer
B. Robbery

Explanation
B is correct. In Crime forms, robbery is defined as the unlawful taking of property from the care and custody of another person. The robber must have caused or threatened to cause bodily harm to the person being robbed or must have committed an obviously unlawful act that is witnessed by the person being robbed. Burglary is the taking of property by stealth rather than by force or threat.

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2.

Which of the following must be true in a burglary?
- A.
  
  Property must be taken from a custodian or watchperson.
- B.
  
  There must be no evidence of force or violence.
- C.
  
  The burglary must involve unlawful entry or exit from the premises.
- D.
  
  There must be visible evidence of forcible entry or exit.
Correct Answer(s)
C. The burglary must involve unlawful entry or exit from the premises.
D. There must be visible evidence of forcible entry or exit.

Explanation
C and D are correct. Although burglary is not specifically defined in the Crime forms, it still has a specific meaning in the insurance industry. Burglary is the taking of property from inside the premises by a person unlawfully entering or leaving the premises. There must be evidence of forcible entry or exit, such as marks made by tools, explosives, chemicals, or electricity. There is no requirement that the property be taken from a custodian or watchperson.

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3.

Theft generally means which of the following?
- A.
  
  Any act of stealing
- B.
  
  Any act of stealing other than burglary or robbery
- C.
  
  Burglary and robbery only
- D.
  
  Employee dishonesty only
Correct Answer
A. Any act of stealing

Explanation
A is correct. Theft means the unlawful taking of money, securities, or other property. This broad term includes burglary, safe burglary, and robbery.

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4.

Coverage for defense costs is included in which of the following?
- A.
  
  Computer Fraud coverage
- B.
  
  Forgery or Alteration coverage
- C.
  
  All of the Crime coverages
- D.
  
  None of the Crime coverages
Correct Answer
B. Forgery or Alteration coverage

Explanation
B is correct. Under Forgery or Alteration coverage, if the insured is sued for refusing to pay a forged or altered instrument and obtains the insurer's written permission to defend the suit, the insurer will pay reasonable defense costs incurred by the insured.

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5.

Who of the following would be considered custodians while having care and custody of company property inside the premises?
- A.
  
  A store clerk
- B.
  
  A company vice president
- C.
  
  A janitor
- D.
  
  A night watchperson
Correct Answer(s)
A. A store clerk
B. A company vice president

Explanation
A and B are correct. A custodian is someone who has care or custody of property inside the premises. It includes the insured, the insured's partners or members, or any employee. It does not include a watchperson or janitor.

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6.

In a Crime insurance policy, certificates of deposit are considered which of the following?
- A.
  
  Other property
- B.
  
  Money
- C.
  
  Securities
- D.
  
  Either money or securities
Correct Answer
C. Securities

Explanation
C is correct. Securities are instruments or contracts that represent money or property. Checks, drafts, bonds, certificates of deposit, stock certificates, stamps, and credit card receipts are all considered securities.

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7.

What type of property is protected under Computer Fraud coverage?
- A.
  
  Money
- B.
  
  Securities
- C.
  
  Other property
- D.
  
  All of the above
Correct Answer
D. All of the above

Explanation
D is correct. Computer Fraud coverage covers loss of or damage to money, securities, and other property because of the use of a computer to fraudulently transfer that property from inside the premises or banking premises to a place or person (other than a messenger) outside the premises.

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8.

An insured must file a proof of loss within how many days after a loss?
- A.
  
  90 days
- B.
  
  30 days
- C.
  
  120 days
- D.
  
  60 days
Correct Answer
C. 120 days

Explanation
C is correct. If a loss occurs, the insured must provide a sworn proof of loss within 120 days.

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Current Version
Mar 22, 2023

Quiz Edited by
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Feb 24, 2009

Quiz Created by
Fsspc

Chapter 17: Commercial Crime Insurance

George Hawthorn is employed by Moison Appliances as a shipping clerk. As he is stacking TVs in the storage room, he is surprised by two men, both carrying guns. They proceed to empty the warehouse of TVs. This is an example of what?

Which of the following must be true in a burglary?

Theft generally means which of the following?

Coverage for defense costs is included in which of the following?

Who of the following would be considered custodians while having care and custody of company property inside the premises?

In a Crime insurance policy, certificates of deposit are considered which of the following?

What type of property is protected under Computer Fraud coverage?

An insured must file a proof of loss within how many days after a loss?