AFSB flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Employee Theft Coverage

Commercial crime insuring agreement covering theft of money, securities, or other property by an employee acting alone or in collusion with other persons.

Discovery Form

Crime policy basis under which coverage applies to loss discovered during the policy period, regardless of when the dishonest act occurred, subject to any stated retroactive date.

Commercial Crime Policy

Insurance contract covering employee theft, forgery, computer fraud, funds transfer fraud, and related crime perils, typically written on a discovery basis with limits and deductibles.

Fidelity Bond

Guarantee of employee honesty that reimburses the insured for dishonest or fraudulent acts by covered employees, up to the bond limit.

Name Schedule Bond

Fidelity bond that lists specific employees by name and states an individual limit for each; coverage applies only to the listed persons.

Position Schedule Bond

Fidelity bond that covers employees by job position rather than by name; any person occupying a listed position is covered while in that position.

Computer Fraud Coverage

Crime coverage for theft of money, securities, or other property resulting from unauthorized access to a computer system or fraudulent computer instructions.

Funds Transfer Fraud

Crime coverage for loss when fraudulent instructions cause a financial institution to transfer funds from the insured's account without authorization.

Forgery or Alteration

Crime insuring agreement covering loss from forged or altered checks, drafts, promissory notes, and similar instruments; credit card misuse is generally excluded.

Single Loss

All related acts by one person or a group of persons acting together are treated as one loss for the crime policy limit and deductible.

ERISA Fidelity Bond

Fidelity bond required for employee benefit plans, generally at least ten percent of plan assets, subject to a statutory minimum and maximum.

Bid Bond

Contract bond guaranteeing that a bidder will execute the contract and furnish required performance and payment bonds if awarded; penalty is often five to ten percent of bid.

Performance Bond

Contract bond guaranteeing the principal will complete the contract according to its terms; the penal sum is commonly one hundred percent of the contract price.

Payment Bond

Contract bond guaranteeing payment to subcontractors, laborers, and suppliers; it is often required together with a performance bond on public works projects.

Maintenance Bond

Contract bond covering defective workmanship or materials discovered during a stated period after project acceptance; it does not cover routine wear and tear.

Miller Act

Federal statute requiring performance and payment bonds on covered federal public construction contracts above the statutory threshold; it protects the government and unpaid suppliers.

General Indemnity Agreement

Contract in which the principal and indemnitors agree to reimburse the surety for losses and expenses and grant the surety subrogation rights.

Three Cs of Suretyship

Underwriting factors of character, capacity, and capital used to assess a contractor's integrity, ability to perform, and financial strength.

Work-in-Progress Schedule

Contractor financial report showing revenue, costs, billings, and estimated profit on ongoing jobs; sureties use it to assess completion risk and financial condition.

Backlog

Value of contracted work not yet completed; it is compared with net worth and surety capacity to gauge future bonding needs and performance demands.

Penal Sum

Maximum amount the surety may pay under a bond; for performance bonds it often equals the contract price, but it may be a different stated amount.

Surety Subrogation

Surety's right, after paying a loss, to step into the obligee's or principal's rights and recover from parties responsible for the default.

License Bond

Commercial surety bond required by a government unit to guarantee the principal complies with licensing laws and pays applicable taxes or fees.

Permit Bond

Commercial surety bond guaranteeing compliance with permit conditions and applicable regulations; the obligee is typically a government agency.

Fiduciary Bond

Court-required bond guaranteeing an executor, administrator, guardian, or trustee faithfully performs duties and accounts for estate or trust assets.

Appeal Bond

Court bond that stays enforcement of a judgment while an appeal proceeds; its penal sum usually includes the judgment plus costs and interest.

Public Official Bond

Surety bond guaranteeing faithful performance of duties by an elected or appointed public official and protecting the government entity from dishonesty or default.

Lost Instrument Bond

Commercial surety bond indemnifying an issuer or transfer agent that replaces a lost security and protecting against later claims by the original holder.

Judicial Bond

Court bond covering litigation-related obligations such as appeal, attachment, injunction, replevin, or bail; it protects parties against loss from those remedies.

Customs Bond

Commercial surety bond guaranteeing payment of duties, taxes, and fees to a customs authority; it is often required for importing goods.

Subdivision Bond

Commercial surety bond guaranteeing a developer completes public infrastructure or improvements required by a local government as a condition of subdivision approval.

Continuous Bond

Commercial surety bond that remains in force until canceled; the surety must give the obligee notice of cancellation before liability ends.