Crime, Inland Marine, and Specialty Casualty Coverages
Crime insurance protects against loss of money, securities, and other property from dishonest acts; inland marine covers property in transit and other mobile or unusual exposures; specialty casualty lines fill gaps that the CGL and auto forms leave open. The exam tests which form responds to which loss.
Crime
- Employee theft covers dishonest acts by employees, with a per-loss limit and often a separate limit for employee benefit plans.
- Forgery or alteration covers altered checks and forged endorsements.
- Computer fraud and funds transfer fraud are separate insuring agreements; computer fraud generally requires actual entry into a computer system, while funds transfer fraud involves fraudulent instructions to a financial institution.
- Money and securities carry inside and outside limits. Fidelity covers employee dishonesty; a surety bond guarantees performance and involves three parties.
Inland marine
- Built on the nationwide marine definition: property in transit, bailee exposures, instrumentalities of transportation, and personal property floaters.
- Motor truck cargo covers goods the trucker hauls for others; the shipper's own goods need a property floater.
- Builders risk covers a structure under construction, including materials in transit and at the site.
- Valuable papers, fine arts, and scheduled equipment floaters insure specified items, often worldwide.
Specialty casualty
- Professional liability/E&O, directors and officers, employment practices liability, cyber, kidnap and ransom, pollution, and umbrella/excess forms.
- Cyber policies typically combine first-party breach response with third-party liability.
Worked example
A bookkeeper diverts $80,000 through 15 forged checks over 18 months. Employee theft is the applicable agreement, and the entire scheme by one employee is normally treated as one loss regardless of the number of transactions, so a $50,000 limit applies once, less the deductible. The forgery agreement does not add a second limit for the same dishonest acts.
Traps that cost marks
- Assuming the CGL covers employee dishonesty - it excludes it.
- Confusing a fidelity bond with a surety bond.
- Expecting motor truck cargo to cover the insured's own goods.