Chapter 11 Exam- Commercial Crime

Under the terms of a commercial crime policy, an individual is considered to be an employee until: A 12 months after outstanding claims are resolved B 30 days after he or she is terminated C The end of the policy period D He or she is terminated

30 Employees are no longer covered after the 30th day following their termination.

The Crime Coverage Form offers how many optional insuring agreements? 2 8 1 4

8 The insured may choose one, several, or all of the coverages, and none are mandatory.

The Discovery Form covers losses that are: A Discovered within 12 months of the loss B Discovered to have occurred during the policy period C Discovered within 12 month of the policy period termination D Discovered during the policy period, regardless of when they occurred

Discovered during the policy period, regardless of when they occurred Discovered during the policy period, regardless of when they occurred

After noticing the disappearance of office supplies from within a private office facility, which coverage might an insured add to a commercial crime policy? A Robbery or safe burglary B Theft of money and securities C Employee theft or dishonesty D Mysterious disappearance

Employee Theft covers acts of theft by an employee that result in loss of, or damage to, money, securities, and other property. It can safely be assumed that office supplies are being stolen by employees.

Which of the following is not one of the 8 insuring agreements used by the Commercial Crime coverage form? A Employee Theft B Extortion C Computer Fraud D Fund Transfer Fraud

Extortion Extortion coverage can be added to the crime policy as an endorsement.

If an accountant stole money by signing a business owner's name on a $1,000 check, which insuring agreement would provide coverage? A Money Orders and Counterfeit Money B Employee Theft C Theft of Money D Forgery or Alteration Money

Forgery or Alteration insures against the forgery or alteration of checks for money drawn by the insured or someone acting on behalf of the insured.

During an inventory check, Company RST discovers a shortage of product and materials. No evidence of a crime is found either at the warehouse or in the electronic record. Which of the following describes Company RST's likely course of action? A It files a computer fraud claim on the assumption that the computer system was flawed B It files a claim with its insurance company seeking coverage under the mysterious disappearance clause of their burglary coverage C It files a claim under the employee theft insuring agreement D It has to absorb the loss, since no evidence of a crime existed

It has to absorb the loss, since no evidence of a crime existed Since there is no evidence of a crime leading to the loss, Company RST would have to absorb it. Mysterious disappearance is not covered by any of the standard crime coverage forms.

A commercial crime policy form written with the Robbery or Safe Burglary of Other Property insuring agreement would cover which of the following? A A masked gunman confronts a cashier and demands money B Jewelry store windows and glass display cases are destroyed during a burglary C A messenger is robbed while transporting high end computer components D An employee breaks into the company safe and steals precious metal

Jewelry store windows and glass display cases are destroyed during a burglary The Robbery or Safe Burglary of Other Property insuring agreement does not cover cash, or losses outside the insured premises. Employee theft of any kind would be covered under the Employee Theft and Dishonesty insuring agreement.

Which of the following could be a 'custodian' under the terms of a commercial crime property policy? A Janitor B Partner C Watchperson D Messenger

Partner A custodian is someone who has possession of insured property on the insured premises. The insured, insured's partner, or employees are considered custodians. The policy form specifically excludes anyone acting as watch person or a janitor from the definition of 'custodian.' A messenger has possession of the insured's property away from the insured premises.

Which of the following types of property would be covered by the Guest's Property endorsement to a commercial crime policy? A Property stored in a hotel safety deposit box by someone renting a room B The funds of credit union members stolen during a robbery of the credit union C Client property destroyed in a fire D Customer property stored in a bank safety deposit box

Property stored in a hotel safety deposit box by someone renting a room Guest's Property specifically refers to safety deposit boxes that are not offered as long-term storage within a bank or other financial institution, such as the temporary, safety deposit boxes, or similar secure storage units offered as an accommodation to hotel guests.

Which of the following crime forms requires the use of a Retroactive Date? A Discovery Form B Loss Sustained Form C Occurrence Form D Claims-made form

The Discovery Form covers losses that are discovered during the policy period but did not necessarily occur during the policy period. Claims-made and occurrence forms are used with Commercial General Liability policies, not Commercial Crime.

Which of the following provides coverage for commercial crime losses which occur during the policy period and are discovered within a specified time? A Employee Theft B Loss-Sustained Form C Occurrence Form D Discovery Form

The loss sustained form covers losses that occur during the policy period and are discovered within 12 months of policy termination.

Which of the following is an example of burglary? A The taking of property from inside the premises by a person who has caused or threatened bodily harm B The taking of property from inside the premises by a person who has entered through an unlocked window C The mysterious disappearance of property D The taking of property by a person who hid inside a storeroom during the day and broke a window to get out at night

The taking of property by a person who hid inside a storeroom during the day and broke a window to get out at night Burglary must include forcible entry or exit. An unlocked window does not constitute forced entry.

Which of the following statements regarding commercial crime coverage is correct? A Under the Commercial Crime Program, money includes evidence of debt B Theft includes any act of stealing, including burglary and robbery C Employee Dishonesty Coverage Form A covers extortion D In order to constitute burglary for insurance purposes; there must be use of force or threat of force

Theft includes any act of stealing, including burglary and robbery

Any person employed by the insured specifically for the purpose of having the care and custody of property inside the premises is defined as a: A Custodian B Messenger C Partner D Watchperson

Watchpersons are hired to watch over property. It is their duty. By contrast, the definition of custodian applies to all employees that at one point or another may have custody of company property on the premises as a result of their duties.