Commercial Crime Insurance

An insured bank has commercial crime coverage form with all 7 coverage parts. During a particularly busy day, an 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: A) covered under the Funds Transfer Fraud insuring agreement. B) excluded under the Computer Fraud insuring agreement. C) excluded under the Inside the Premises-Theft of Money and Securities insuring agreement. D) covered under the Outside the Premises insuring agreement.

a

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: A) theft. B) robbery. C) disappearance. D) burglary.

a

How is burglary defined? A) Uninvited entry onto the premises of another with the intent to commit an illegal act. B) The use of force to enter a premises after business hours. C) 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. D) Illegal entry onto the premises of another.

c

The inside the premises--robbery or safe burglary of other property insuring agreement in the commercial crime policy covers which one of the following perils? A) Employee theft. B) Disappearance of money while transported by armored car. C) Burglary by a security guard while a store is closed. D) Alteration of a check issued by the insured.

c

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? A) A business owner files suit to recover property wrongly taken by a taxing authority and to recover her legal fees. B) The silent partner in a jewelry wholesale business steals a shipment of diamonds. C) The safe at a furniture store is taken after the store is burglarized. D) The county taxing authority seizes and sells a taxpayer's merchandise to satisfy a tax debt.

c

In commercial crime forms, the insured has all of the following duties in the event of a loss EXCEPT A) notifying the insurer as soon as possible. B) providing a sworn proof of loss within 120 days. C) cooperating with the insurer in the investigation of the claim. D) reporting all theft losses to the police.

d

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: A) custodian. B) bank employee. C) watchperson. D) messenger.

d

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? A) Forgery or alteration. B) Inside the premises-theft of money and securities. C) Inside the premises- robbery or safe burglary of other property. D) Employee theft.

d

Which of the following losses could be covered under a crime insurance policy? A) Indirect losses. B) Theft committed by the insured. C) Loss due to seizure of property by government authority. D) Theft of retail merchandise.

d

A hotel has added a guests' 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: A) coverage for guests' jewelry in the amount shown on the declarations page. B) no coverage because the guest was negligent. C) no coverage because the jewelry was not in the insured's possession. D) coverage for jewelry only inside a safe deposit box inside the insured's covered premises.

a

In a crime policy, all of the following are acceptable ways to value covered property EXCEPT: A) estimated value. B) market value. C) replacement cost. D) face value.

a

To be defined as a burglary, an event must include which of the following conditions? A) Visible signs of forced entry or exit. B) Mysterious disappearance. C) Bodily injury. D) Fear or threat of violence.

a

Which of the following statements regarding employee theft is NOT true? A) Coverage is not cancelled for employees causing the loss. B) The insurer pays only the amount of the loss that exceeds the deductible. C) Coverage is automatically cancelled for employees causing the loss. D) The insured must notify the insurer as soon as possible of any loss insured against.

a

Which one of the following acts involves visible signs of forced entry or exit? A) Burglary. B) Theft. C) Breaking and entering. D) Robbery.

a

A corporation located in Chicago has added an extortion-commercial entities (CR 04 03) 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: A) pays only if there is a threat of bodily harm. B) pays only if Bolivia is listed on the endorsement Schedule as a covered territory. C) excludes coverage for directors and officers who are traveling in foreign countries. D) excludes coverage in foreign countries.

b

In commercial crime insurance, shoplifting is classified as: A) malicious mischief. B) theft. C) robbery. D) burglary.

b

In the commercial crime forms, the definition of theft does NOT include: A) robbery. B) mysterious disappearance. C) burglary. D) larceny.

b

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) A blanket position bond's policy limit applies separately to each loss. A commercial blanket bond's policy limit applies separately to each employee involved in a loss. B) 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. C) A blanket position bond's policy limit applies aggregately for each loss. A commercial blanket bond's policy limit applies aggregately for each employee in that position. D) A commercial blanket bond's policy limit applies aggregately for each loss. A blanket position bond's policy limit applies aggregately for each employee in that position.

b

Which one of the following bonds is purchased to protect an employer from the actions of dishonest employees? A) Surety. B) Fidelity. C) Performance. D) Corporate.

b

Which one of the following statements describes a major difference between surety bonds and insurance? A) Insurance has three parties to the contract. Bonds have only two. B) Bonds guarantee something will happen. Insurance protects if something happens. C) Insurance contracts give the insurer the right to recover from third parties. Bonds only permit the surety to recover from its insured. D) Different types of companies sell bonds and insurance.

b