Chapter 17: Commercial Crime Insurance

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?

Burglary

Robbery

Mysterious disappearance

A fidelity loss

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.

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.

2. Theft generally means which of the following?

Any act of stealing

Any act of stealing other than burglary or robbery

Burglary and robbery only

Employee dishonesty only

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

Explanation

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

3. What type of property is protected under Computer Fraud coverage?

Money

Securities

Other property

All of the above

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.

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.

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

Other property

Money

Securities

Either money or securities

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.

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.

5. Which of the following must be true in a burglary?

Property must be taken from a custodian or watchperson.

There must be no evidence of force or violence.

The burglary must involve unlawful entry or exit from the premises.

There must be visible evidence of forcible entry or exit.

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.

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.

Submit

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

A store clerk

A company vice president

A janitor

A night watchperson

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.

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.

Submit

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

Computer Fraud coverage

Forgery or Alteration coverage

All of the Crime coverages

None of the Crime coverages

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.

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.

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

90 days

30 days

120 days

60 days

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

Explanation

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