CRIS - Property - Ch. 11 - Other Policies: Commercial Crime and Equipment Breakdown

Section 11. 3 - Commercial Crime Insurance
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- Most organizations need crime insurance to cover employee theft losses, since property policies universally exclude employee dishonesty as a cause of loss.

- Any organization that handles a significant amount of money and securities needs crime insurance, since money and securities do not qualify as covered property under a property policy.

- Any organization purchasing named perils property coverage, whose inventory, equipment, or other property is susceptible to theft, needs crime coverage even if little or no money is exposed to loss, since named perils property policies do not cover theft as a cause of loss.
- Employee dishonesty coverage pays for employee theft of money, securities, and property other than money and securities.

- Coverage applies to property owned or leased by the insured and to property held by the insured for others and property for which the insured is legally liable.

- Some forms exclude property inside the premises of a client, but coverage can be added back by endorsement.
Depending on the particular form used, coverage may apply to loss by "employee dishonesty" or "employee theft."

Some forms that use the term "employee dishonesty" specify that dishonest acts must be committed "with the manifest intent" to cause the insured a loss and to obtain a financial benefit, other than employee benefits earned in the normal course of employment, for either the employee or another person or organization that the employee intended to receive the benefit.

- This requirement is included to preclude coverage for loss resulting from an employee's poor business judgment or violation of the insured's rules and procedures (perhaps committed with the sincere belief that the employer's interest would be furthered rather than harmed).

Forms that use the term "employee theft" rather than "employee dishonesty" (including those in the ISO commercial crime program) typically do not include this "manifest intent" language.