unit 16 - crime insurance

What is one of the major differences between the application of commercial blanket bond's policy limit versus a blanket position bond's policy limit?

A commercial blanket bond's policy limit applies separately to each loss. A blanket position bond's policy limit applies separately to each employee involved in a loss

Which one of the following parties is the principal in a surety bond?

A contractor who has signed a contract to build an addition to a residence

Which of the following statements regarding bond agreements is CORRECT?

A surety bond serves as a guarantee of performance

A bid bond guarantees to the entity awarding the contract that the bidding contractor, if selected, will undertake the contract and will furnish a performance bond for the project. What will the bond do if the contractor does not take the job?

Agrees to pay the difference between the selected contractor's bid and the bid that is then accepted

Which one of the following statements describes a major difference between surety bonds and insurance?

Bonds guarantee something will happen. Insurance protects if something happens

Which one of the following acts involves visible signs of forced entry or exit?

Burglary

The Inside the Premises -- Robbery or Safe Burglary of Other Property insuring agreement in the commercial crime policy covers which of the following perils?

Burglary by a security guard while a store is closed

Which of the following is NOT a type of surety bond?

Collateral

A hotel has added a guest's property endorsement to its commercial crime coverage form. A guest at the hotel removes her jewelry and leaves it wrapped in a towel at the front desk while she uses some exercise equipment. When she finishes her workout, the jewelry is gone. The policy provides

Coverage for the guest's jewelry in the amount shown on the declarations page

Which of the following statements regarding employee theft is NOT true?

Coverage is not canceled for employees causing the loss

An insured bank has a commercial crime coverage form with all 7 coverage parts. During a particular busy day, and employee is given false account information and electronically transfers a large sum of money to another account in another bank. The amount of this improper funds transfer is

Covered under the Funds Transfer Fraud insuring agreement

Which of the following insuring agreements of the commercial crime coverage form would best protect an insured from losses caused by an employee's deceit?

Employee theft

To be defined as a robbery, an event must include which of the following conditions?

Fear or threat of violence

Which one of the following bonds is purchased to protect and employer from the actions of dishonest employees?

Fidelity

All of the following statements about a loss sustained crime insurance form are true EXCEPT

Losses that occur after the policy expiration are covered

The commercial crime policy covers loss to money and securities outside the insured's premises while money or securities are in the care and custody of a

Messenger

In commercial crime forms, the definition of theft does NOT include

Mysterious disappearance

Who does a surety bond protect?

Obligee

One of Susan's jobs as the office manager for Acme Insurance is to drop off the daily deposits at the bank on her way home from the office. If Susan is robbed one night while making the deposit, what crime form will provide coverage to Acme Insurance for the loss?

Outside the Premises

Which of the following bonds guarantees that bills for labor and materials will be paid to the contractor as they are due?

Payment

A corporation located in Chicago has added an extortion-commercial entities endorsement to its commercial crime coverage form. One of the directors of the corporation is captured and held for a $3 million ransom in La Paz, Bolivia. The policy

Pays only if Bolivia is listed on the endorsement schedule as a covered territory

What type of bond is used by a contractor to guarantee that work will be completed to specifications?

Performance

Which of the following is a contract bond?

Performance bond

Who are the 3 parties to a surety bond?

Principal, obligee, and surety

How is burglary defined?

Taking of property from inside the premises by a person unlawfully entering or leaving the premises as evidenced by marks of forcible entry or exit

After Acme Construction wins a bid to build an office complex, the owner demands that Acme purchase a payment bond to cover electrical and heating subcontractors. What guarantee is the owner seeking from Acme Construction by demanding the payment bond?

The principal will complete and deliver the work free of any liens or encumbrances

Which one of the following losses would be covered under the Inside the Premises--Robbery or Safe Burglary of Other Property insuring agreement in the commercial crime policy?

The safe at a furniture store is taken after the store is burglarized

An insured who owns a convenience store arrives at the store one morning and finds the door unlocked. There is no sign of forced entry, but several items -- including money in the cash register -- are missing. Based only on this information, the insured has suffered a

Theft

In commercial crime insurance, shoplifting is classified as

Theft

Which of the following losses could be covered under a crime insurance policy?

Theft committed by a hotel maid

License and permit bonds are required by government entities, including states, cities, and towns, from individuals requesting permission or license to take certain actions that may affect the public. What do these bonds do?

They guarantee that the principal will perform the described activity in conformance with the specifications, terms, and codes governing such activities