Crime Coverage and Insurance Flashcard

Front

What is the payment method for losses to money under crime coverage?

Back

At face value

Answer explanation

Under crime coverage, losses to money are paid at face value, meaning the full amount stolen is reimbursed without depreciation or adjustments. This ensures Mia receives the exact amount lost.

Front

How will a loss involving securities be paid under a company's crime coverage policy?

Back

At market value at close of business on the day the loss was discovered

Answer explanation

The correct choice is 'At market value at close of business on the day the loss was discovered' because crime coverage policies typically reimburse losses based on the market value at the time of the incident.

Front

Coverage territory for crime coverage in Jackson's company's policy?

Back

United States and its territories and possessions, Puerto Rico, and Canada

Answer explanation

The correct coverage territory for crime insurance includes the United States, its territories and possessions, Puerto Rico, and Canada, ensuring comprehensive protection across these regions.

Front

Automatic coverage period for new employees and premises under a new business insurance policy.

Back

90 days

Answer explanation

The correct answer is 90 days, as most insurance policies provide automatic coverage for new employees and additional premises for this duration without needing to notify the insurer.

Front

What must Michael do if he suspects a law has been broken after his store is broken into?

Back

Notify the police

Answer explanation

Michael should notify the police, as they are responsible for investigating crimes like break-ins. This step is crucial for documenting the incident and potentially recovering stolen property.

Front

Maximum time allowed for William to submit a sworn proof of loss to his insurance company after experiencing a loss at his property?

Back

120 days

Answer explanation

William has a maximum of 120 days to submit a sworn proof of loss to his insurance company after experiencing a loss. This timeframe is standard in many insurance policies.

Front

Main difference between Loss Sustained Form and Discovery Form in insurance policies?

Back

The trigger for coverage

Answer explanation

The main difference between the Loss Sustained Form and the Discovery Form is the trigger for coverage. The Loss Sustained Form covers losses that occur during the policy period, while the Discovery Form covers losses discovered during the policy period.

Front

What does a Fidelity bond primarily protect a business owner against?

Back

Employee dishonesty

Answer explanation

A Fidelity bond primarily protects against employee dishonesty, covering losses due to theft or fraud by employees. This is crucial for David's small business to mitigate risks associated with internal misconduct.

Front

Who initiates a Fidelity bond to protect a company from potential employee dishonesty?

Back

The obligee

Answer explanation

In this context, the obligee is the party that requires the fidelity bond to protect against employee dishonesty. Jackson, as the business owner, is the obligee who initiates the bond for his company.

Front

What type of bond should cover all employees on a blanket basis for protection against potential dishonest acts?

Back

Blanket bond

Answer explanation

A blanket bond covers all employees under a single policy, protecting against dishonest acts. This is ideal for Hannah's needs, as it provides comprehensive coverage without needing individual policies for each employee.