Fina 4358 Homework 9

FINA 4358 HOMEWORK 9 Commercial Property Insurance Homework 9 The Production Dynamics, Inc. “retail outlet” is insured under the ISO Commercial Crime Coverage Form that includes the following insuring agreements: • Employee Theft • Inside the Premises – Theft of Money and Securities • Inside the Premises – Robbery or Safe Burglary of Other Property • Outside the Premises Indicate which, if any, of those insuring agreements would cover each of the following losses. If a loss is not covered by one of the insuring agreements, explain why, and identify another insuring agreement, if any, that would have covered the loss. 1. An employee of PDI voided the record of an actual sale and took the cash that had been deposited in the cash register for that sale. Yes. Because ISO Commercial Crime Coverage covers employee theft. 2. After receiving a lower raise than she expected, a PDI employee intentionally damaged store merchandise. Yes. Because ISO Commercial Crime Coverage only covers damages inside the premises resulted from theft of money and securities, robbery or safe burglary of other property. 3. During the busy season, PDI hired a new sales clerk from a temporary staffing agency. The temporary employee stole several small but valuable articles of merchandise. One week following the end of the temporary employee’s service, PDI discovered the loss by reviewing store surveillance tapes. Yes. Because ISO Commercial Crime Coverage covers the loss or damage inside the premises resulted from employee theft. 4. A PDI employee was rumored to be secretly selling GPS devices from PDI’s inventory and pocketing the proceeds. The employee admitted doing no wrongdoing, but a physical inventory revealed that five such GPS devices were unaccounted for, resulting in a $1,250 inventory shortage. Yes. Because ISO Commercial Crime Coverage covers the loss or damage inside the premises resulted from employee theft. 5. While a PDI employee closed up the store in Denver at the end of the evening, his friend was waiting in the warehouse to give him a ride home. The friend stole a book of checks from the office when the employee was busy in another part of doc (13) the store. The next day, without any knowledge or collusion of the employee, his friend purchased $925 worth of merchandise at a nearby store by signing PDI’s name to a stolen check. No. Because ISO Commercial Crime Coverage only covers the loss or damage inside the premises resulted from employee theft. 6. A ring of thieves staged a medical emergency in the store. During the confusion and without being observed by anyone, an accomplice stole $600 worth of merchandise. No. Because ISO Commercial Crime Coverage only covers the loss or damage inside the premises resulted from employee theft. doc (13) Homework 9 cont. 7. While walking to the bank with a cash deposit, PDI’s manager was robbed at gunpoint of $1,100) Yes. The coverage covers will pay for loss of "money" and "securi- ties" outside the "premises" in the care and custody of a "messenger" or an armored motor vehicle company resulting directly from "theft", disappearance or destruction. 8. A man broke into the PDI’s store during the night and stole about $5,000 of merchandise. Yes. The coverage will pay for loss of inside the "premises" resulting directly from an actual or attempted "robbery" of a "custodian". 9. An inexperienced sales clerk that PDI had just hired accepted $150 of counterfeit currency in payment for merchandise. PDI’s manager discovered the counterfeit currency several hours after the customer had left the store. Yes. The coverage will pay for loss resulting directly from your having accepted in good faith, in exchange for merchandise, "money" or services "Counterfeit money" that is acquired during the regular course of business. One of the most complicated aspects of commercial crime insurance is the variety of Inside the Premises coverages. The following exercise will help you to distinguish among the various options for covering property other than money and securities while on the insured premises. Before starting, you should review what i s covered by each of the various Inside the Premises agreements for other property. Your task in this exercise is to indicate which of the following insuring agreements would cover each of the losses described. Some of the losses are covered by more than one of the insuring agreements. Make sure you indicate all that would apply. *Inside the Premises – Theft of Other Property *Inside the Premises – Robbery or Burglary of Other Property *Inside the Premises – Robbery or Safe Burglary of Other Property 10. A man held a warehouse night security guard at gunpoint while two accomplices stole electronic equipment. Inside the Premises – Robbery or Burglary of Other Property 11. A woman tried on an expensive leather jacket in the insured’s store and, while being observed by a store sales clerk, she ran out of the store with the jacket. Inside the Premises – Theft of Other Property