MULTIPLE CHOICE -Chapter 13 Exam - Commercial Crime Insurance and Bonds

In a Fidelity Bond, the period of discovery:

is the time the employer has to realize they have suffered loss.

Big Dog's Bonds sells a bond that guarantees that a criminal action defendant will appear in court when not in jail awaiting trial. This bond is known as a:

Criminal Bail Bond

T owns a small business and hires a messenger to take last nights earnings and deposit in the bank. On the way to the bank, the messenger is robbed and the deposit has been stolen. Which of the following crime coverage forms would cover such events?

Inside the Premises - Theft of Money and Securities

Which of the following statements are not true regarding Forgery and Alteration crime coverage form?

The insuring agreement states that the insurer will not cover expenses associated with legal actions that results against the insured to stop payment when it is believed that forgery was present, but actually no forgery occurred

Which of the following bonds guarantees performance?

Surety

Under Robbery Inside the Premises - Robbery of Safe Burglary or Other Property, which of the following losses would be covered by the policy?

A business that had inventory stolen by an individual that threatened an employee's life upon entering the building.

Which of the following are types of Surety Bonds?

All of the answers listed (Permit, Contracts, and Court)

A partner of a famous law firm receives an email that if he doesn't pay $500,000 by 11pm, personal secrets will be released that will destroy his business and reputation. The type of coverage that would protect the law firm from this potential loss would be?

Extortion - Commercial Entities

M has committed an act of dishonesty and has triggered a bond payment known as the limit of liability. The bond in question is a:

Fidelity Bond

Which of the following provides protection against the dishonest acts of employees?

Fidelity protection

Which of the following statements BEST describes the difference between bonds and insurance?

Insurance is a two party contract; bonds have three. Once an insurance loss occurs, there is no repayment to the insurer by the insured. With bonds, the principal is expected to reimburse the surety.

Y hires an armored car service to transport his stock of semiprecious stones from one store to another. While in transit, $35,000 worth of stones were stolen from the truck. The following coverage forms and loss amounts will Y's crime policy pay?

Outside the premises $5,000

Which of the following is a judicial bond?

Replevin bond

J hires K as a third shift employee at his 24 hour jewelry store. At 3 AM one night, K is threatened by an intruder to empty the safe and give him all of the jewels that are stored away. Which of the following crime coverages forms covers this incident?

Robbery or Safe Burglary of Other Property

The definition of crime that is broad enough to include forcible entry of insured's premises, threat of violence or any stolen property is:

Theft

The face amount of a Surety bond is called the:

bond penalty

The primary difference of how employee theft is covered under commercial crime employee insurance versus government crime employee coverage is:

employee theft is covered as a per loss basis but government can be covered under both a per loss and per employee basis