Wes Bailey Exam #2

Employee Theft

Insures the employer against theft of money or other property by its own employees

Employee Theft Coverage, Per Occurrence Limit

$500,000

Discovery Form (Crime Insurance)

Covers losses that are discovered during the policy period (Preferred)

Loss Sustained Form

Covers losses that are sustained during the policy year (Does not include past crimes)

How any sections in crime policy

7 Sections

1. Employee Theft

2. Forgery and Alteration

3. Inside the Premises (Theft of money or securities)

4. Inside the Premises (Robbery or safe burglary of other property, not money)

5. Outside the Premises

6. Computer and Funds Transfer

7. Money orders and Counterfeit paper currency

Crime Policy- Employee Theft

Dishonesty

Crime Policy- Forgery and Alteration

This coverage section is designed to cover loss of the "forgery" or "alteration" of checks or other written promissory notes to pay a sum of money

Crime Policy- Inside the Premises (Theft of Money or Securities)

-Theft of money (except by employees)

-Disappearance of money (Mysterious or not)

-Destruction of money

Crime Policy- Inside the Premises (Robbery or safe burglary of other property)

-Robbery unlawfully taking property from by causing or threatening bodily harm

Crime Policy- Outside the Premises

Covers money and other property while outside the premises and in the care of a messenger or armored vehicle

Crime Policy- Computer and Funds Transfer Fraud

Covers loss resulting from fraudulent entry of electronic data into a computer system owned by the insured

Crime Policy- Money orders and counterfeit paper currency

Covers the loss due to bogus money order or counterfeit currency

"Social Engineering Fraud" Endorsement

Fraudulent emails

Exclusions to the Crime Policy

1. Acts committed by the insured

2. Acts of employees or directors (except as it pertains to the employee theft coverage section)

Exclusions to Employee Theft

1. Inventory shortage

2. An employees unauthorized trading of stocks and bonds

Equipment Breakdown Coverage

Covers equipment against breakdown and covers the insured building and BPP against damage caused by the explosion of a steam boiler

Examples of Equipment breakdown

-Electrical generating and transmitting

-Compressors

-A/C Equip and refrigerator

-Production machinery used in manufacturing

-Office equipment (copy machines, printers)

The challenge with equipment breakdown

1. Clients dont understand what it can do for them

2. Insureds fail to submit a claim when something happens

3. Agents and brokers are subject to lawsuits when not offered the coverage

Inland Marine Insurance

Refers to a wide range of coverages insuring property that can't be insured on a traditional property policy

Types of property under inland marine insurance

-Property being transported

-Property in possession of a bailee (dry cleaner)

-Moveable equipment and unusual property

-Property of certain dealers

-Instrumentalists of transportation and communication

Inland Marine Insurance- Property being transported

Common carrier- transporting property of anyone in public

Contract carrier- transporting anyone with a contract

Private carrier- Businesses that transport their own property

Inland Marine Insurance- Property in possession of a bailee

dry cleaner

Inland Marine Insurance- Moveable equipment and unusual property

-Construction equipment

-Agriculture equipment

-Buildings under construction

Inland Marine Insurance- Property of certain dealers

-Jewelry stores

-Fur traders

-Coin traders

Inland Marine Insurance- Instrumentalists of transportation and communication

Bridges, tunnels, pipelines

Builders Risk Insurance

Insuring a building during its construction

Exposure under Builder Risk Insurance

1. Stepped up theft exposure w/ regard to building materials

2. Added risk due to "welding activities"

3. Limit?

4. Safe cost coverage (additional interest on the bank loan or additional engineer fees)

Transit Insurance

1. Covers the property while in transit

2. Covers property transported by others in "acts of nature"

Jewelers Mutual

Company that covers jewelry

Liability Loss Exposures

The possibility that a business might sustain a financial loss due to a liability lawsuit

Potential legal liability

Which is a legally enforceable obligation of an organization to pay a sum of money to another person or organization

Bases for legal liability

torts, contracts, statutes

Tort

A civil wrong; negligence

Contracts

Identification provisions, breach of contract

Statutes

Workers compensation statutes

Principal loss exposures covered by CGL

-Premises liability exp.

-Operations liability exp.

-Products liability exp.

-Completed operations exp.

Premises liability exposure

Customer slip and fall

Exclusion: bank robber story

Operations liability exposure

construction issues

Products liability exposure

defective product

Completed operations

Balcony railing falls

Exclusions of CGL

1. Expected or intended injury

2. Contractual liability

3. Liquor Liability

4. Workers compensation and similar laws

5. Employers liability

CGL Exclusion- Expected or intended injury

The tire story- Company knowingly sold a faulty tire

CGL Exclusion- Contractual Liability

Except insured contract

CGL Exclusion- Liquor Liability

CGL Exclusion- Workers Compensation

Any obligation of the insured under a workers compensation, disability benefits or unemployment compensation or any similar law.

CGL Exclusion- Employers Liability

Applies to employee, not contract workers

CGL Exclusion- Workmanship exclusion

Inland Marine - Filed Forms

-Commercial articles coverage form

-Camera + Musical instrument dealer

-Equipment dealers Coverage form

-Physicians & surgeons equipment

-Sign coverage form

-Theatrical property coverage form

-Film coverage form

-Jewelers form

-Accounts receivable coverage form

-Valuable paper coverage form

Ocean marine insurance

Insurance designed to insure ocean going ships and their cargos

Voyage Policy

Covers the cargo for a single trip

Open cargo policy

Covers all goods shipped during the policy period

Warehouse to warehouse clause

Cargo is covered by insurance from the time it leaves one warehouse to the next

Hull Insurance

Covers body of the ship

Perils of the sea

-High winds

-Strong seas

-collisions

-groundings

-natural disaster when docked

-crew misconduct

Exclusions to Ocean Marine (can be purchased separately)

-War

-Piracy

Protection and Indemnity Insurance (P&I)

Covers the ship against damages to bridges, piers, and wharfs.

Injury to passengers and crew on the insured ship

Injury to persons on other ships

Damage to cargos of others aboard the insured ship