crime insurance unit 16
fiduciary bond and judicial bond
2 types of court bonds
fiduciary
A _________ bond guarantees that a person will fulfill his fiduciary obligations set forth by law
payment
A _________ bond, aka labor and material bond, guarantees that bills for labor and materials will be paid to the contractor as they are due
messenger
A _________ is the named insured or any partner or employee of the named insured while having care or custody of the money or securities outside the insureds premises
watchperson
A __________ is any person the named insured retains specifically to have care and custody of property inside the premises and who has no other duties.
custodian
A ___________ is the named insured, any of the named insureds partners, or any employee.
burglary
James broke windows and entered a store with a gun and stole 2 tvs. This is an example of: burglary, safe burglary, mysterious disappearance, robbery
Mysterious Disappearance
Judy came home and saw 5 rings missing. She knows she saw them there this morning before she left. this is an example of
watchperson
Kurt works for a jewelry store and his sole responsibility is to have care and custody of all the property inside the store. Which term describes kurt's role? watchperson, security guard, custodian, messenger
they guarantee that the principal will perform the described activity in conformance with the specifications, terms, and codes governing such activities
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?
bonds guarantee something will happen. insurance protects if something happens
Major difference between surety bonds and insurance
funds transfer fraud
losses resulting from fraudulent instructions to a financial institution to pay money from an insureds account are covered by which of the following crime insurance coverage forms? computer fraud, theft of money and securities, employee theft, funds transfer fraud?
fiduciary bonds
required for individuals who manage the affairs and assets for another person
bid
A ____ bond guarantees that if a contractor's bid is accepted, the contractor will enter into a contract and provide the required performance bond.
surety
A _____ bond provides monetary compensation if the bonded party fails to perform a certain act, such as a contract
performance
A ______ bond guarantees to the owner (obligee) that the contractor (principal) will complete the contract as drawn
completion
A ________ bond guarantees that when contractors borrow money to fund construction projects, the project will be carried out and the work will be delivered free and clear of liens or encumbrances. It guarantees that a lender will be paid for any loans it issues in connection with contracted work
performance
A _________ bond guarantees that a contractor, typically a construction contractor, will complete the contract as drawn.
agree to pay difference between the selected contractors bid and the bid that is then accepted
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?
the bonding company
A contractor has committed to finish a hotel remodel in time for a Jan 1 opening. The hotel wants the contractor to guarantee timely completion of the project with a performance bond purchased from a bonding company. Which party is acting as the surety in this situation? the hotel, the bonding company, the contractor, both hotel and contractor
pays ONLY if Bolivia is listed on the endorsement schedule as a covered territory
A corporation located in Chicago has 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:
coverage for the guest's jewelry in the amount shown in the declarations page
A hotel has added a guest's property endorsement to its commercial crime covg 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 shes done working out her jewelry is gone. The policy provides
the principal will complete and deliver the work free of any liens or encumbrances
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 by demanding the payment bond? the obligee will complete and deliver work free of any liens or encumbrances, the surety will complete and deliver work free of any liens or encumbrances, the fidelity will complete and deliver work free of any liens or encumbrances, the principal will complete and deliver work free of any liens or encumbrances
the extended periods to discover losses terminate one year after the insured obtains commercial crime insurance. its 60 days for discovery
All are true about the discovery form EXCEPT: the extended periods to discover losses terminate one year after the insured obtains commercial crime insurance, a loss is considered discovered when the insured gives notice of the actual loss, a loss is considered discovered when the insured first becomes aware that the loss occurred, crime insurance written on a discovery basis covers losses that are sustained at any time and discovered either during the policy period or up to 60 days after the policy expires
custodian
An individual who has care and custody of property inside the premises is known as: a watchperson, messenger, custodian, fiduciary
covered under the Funds Transfer Fraud insuring agreement
An insured has a commercial crime covg form w all 7 coverage parts. During a busy day, an employee is given false account info and electronically transfers a large sum of money to another account in another bank. The amount of this improper funds transfer is
covers losses that are sustained at any time and discovered either during the policy period or up to 60 days after policy expires. the extended period to discover losses terminates immediately when the insured obtains other commercial crime insurance. the major difference between the discovery loss form and the loss sustained form is WHAT TRIGGERS the coverage.
Discovery crime form
theft
In commercial crime insurance, shoplifting is classified as: robbery, malicious mischief, burglary, theft
mysterious disappearance
In the commercial crime forms, the definition of theft does not include: robbery, burglary, theft, mysterious disappearance
1. loss of other property (NOT MONEY OR SECURITIES) while inside the premises from actual or attempted robbery of the insured, the insureds partners or members, or any employee 2. loss of other property from a safe or vault inside the premises from actual or attempted safe burglary
Inside the Premises-Robbery and Safe Burglary of Other Property has 2 primary coverages:
3 parties (obligee, principal, surety)
Insurance contracts include 2 parties: the insured and the insurance company. Bonds are a contract between:
burglary by a security guard while a store is closed
The Inside the Premises- Robbery or Safe Burglary of Other Property insuring agreement in the commercial crime policy covers which peril? employee theft, disappearance of money while transported by armored car, burglary by a security guard while a store is closed, alteration of a check issued by the insured
obligee
The _____ is the party to whom the principal makes the promise, and for whose protection the bond is written
surety
The _______ is the party (usually the insurance company) that agrees to be responsible for loss that may result if the principal does not keep their promise
principal
The _______ is the party that promises to do or not do a specific thing
messenger
The commercial crime policy covers loss to money and securities outside the insureds premises while money or securities are in the care and custody of a: watchperson, custodian, bank employee, messenger?
damage to the guest's property, customer property, or both while on the insured's premises, in the insured's possession, in safe deposit boxes, or inside the premises
The guest's property endorsement provides coverage for legal liability losses involving:
the cut off period
The period during which the insured may still be indemnified for losses that occurred during the term of the fidelity bond but were not discovered until after its termination is called
judicial bond
What general surety bond category guarantees that the principal will fulfill certain obligations set forth by law? judicial bond, public official bond, fidelity bond, performance bond?
a COMMERCIAL blanket bond's policy limit applies SEPARATELY to each loss, regardless of the number of employees involved. a blanket POSITION bond's policy limit applies SEPARATELY to each EMPLOYEE involved in a loss
What is one of the major differences between the application of commercial blanket bond's policy limit vs. a blanket position bond's policy limit?
supply bond
What type of bond is used to guarantee that supplies will be furnished at an agreed upon price and time? bid bond, completion bond, supply bond, performance bond?
commercial blanket bond
What type of bond is used to schedule an amount of coverage applicable to each loss, regardless of the number of employees who are involved?
buglary
Which act involves signs of forced entry or exit? theft, burglary, breaking and entering, robbery
payment
Which bond guarantees that bills for labor and materials will be paid to the contractor as they are due?
loss sustained form
Which covers losses that occur during a policy period and are discovered either during the policy period or up to a year after? crime form, loss sustained form, occurrence form, discovery form
commercial blanket bonds
Which fidelity bond would cover the loss arising from the dishonesty of one or more employees acting separately or together without listing their specific name or position? commercial blanket bonds, position schedule bonds, blanket position bonds, named scheduled bonds?
theft
Which is described as taking of property by stealth? theft, burglary, robbery, mysterious disappearance
collateral
Which is not a type of surety bond? fiduciary, collateral, bid, performance?
all of these
Which is protected under computer fraud covg? other property, securities, money, all of these
performance bond
Which of the following is a CONTRACT bond? public official bond, performance bond, fidelity bond, judicial bond?
position scheduled
Which of the following ways does ABC homestore cover its employees for theft if only certain jobs within the business are covered and the actual names of employees that fill those positions are not listed? blanket scheduled, name scheduled, position scheduled, employee scheduled
a contractor who has signed a contract to build an addition to a residence
Which party is the principal in a surety bond? a contractor who has signed a contract to build an addition to a residence, the homeowner who will pay the contractor for the work, the insurance company that has provided the bond to guarantee the performance of the contractor's work, the workers who have contracted w the builder to perform the work
Principal, Obligee, and Surety. the principal is the one whose acts are being guaranteed by the bond. the obligee is the one who collects if the principal fails to perform as guaranteed. the surety is the one giving the guarantee
Who are the 3 parties to a surety bond?
the obligee
Who does a surety bond protect?
contractor
Who would be the principal in a contract bond? the contractor, insurance company, the insured, the surety?
robbery
_____ is the unlawful taking of property from the care and custody of another person thru the use of violence or threat to cause bodily harm to the person
employee theft. employee dishonesty
_________ covers loss of, and loss from damage to, money, securities, and property other than money and securities. Loss must be caused directly by _______. The act must be committed with the intent to cause the insured to sustain a loss and obtain financial benefit for the employee or organization intended by the employee
contract. performance, bid, payment, and supply bonds
___________ bonds are issued to guarantee performance based on the terms and provisions of written contracts. ______ and _____ bonds are the 4 common types of these
Outside the Premises
____________ crime form provides coverage in the event of a robbery while outside of the premises and in the care control and custody of a messenger, which includes any employee
fidelity
a _______ bond is purchased to protect employers from the actions of dishonest employees.
performance bond
a company signs a contract with a developer to build an office building. the developer wants the company to guarantee that the work will be completed in accordance w the contract specifications. what type of surety bond does the company need to comply with this request? a supply bond, a performance bond, a license and permit bond, a payment bond
The taking of property from a premises that is closed and locked tight, and leaving marks of forced entry or exit, is called _____.
burglary
employee acts of dishonesty
forgery or alteration covg covers all except: employee acts of dishonesty, forgery of checks, forgery of promissory notes, alteration of checks?
judicial bonds
issued to protect plaintiffs and or defendants from possible losses pending civil court proceedings
loss sustained form
the ________ covers losses that occur during the policy period and are discovered either during the policy period or up to 1 year after the policy expires
the obligee
unlike surety bonds, fidelity bonds are purchased by? the obligee, the obligee, surety and principal, the principal, the surety
