The insuring agreements on CR 00 28 deal with employee theft and loss resulting directly from forgery or alteration of checks, drafts, notes, and similar written promises to pay; the wording of these coverages is the same as that on CR 00 20 03 00, the commercial crime coverage form. The most the insurer will pay for loss in any one occurrence is the applicable limit of insurance shown on the declarations page for the respective coverages. The insuring agreements on CR 00 28 and CR 00 29 read the same.

The exclusions section of CR 00 28 is formatted differently from that of CR 00 20, and is shorter. CR 00 20 has twenty exclusions, some applying to all the insuring agreements and some applying to only certain of the agreements. CR 00 28 (and CR 00 29) has eight exclusions, with three applying to both insuring agreements, four applying only to the employee theft coverage, and one applying to the forgery coverage. CR 00 28 does not have the following exclusions that appear on CR 00 20: governmental action, nuclear, war, accounting errors, exchanges or purchases, fire, money operated devices, motor vehicles, transfer or surrender of property, vandalism, and the voluntary parting of title to property. Presumably, such exclusions are not necessary for the coverages offered by CR 00 28 and CR 00 29.

The following exclusion on CR 00 28 applies only to insuring agreement A.2.

Analysis

This exclusion does appear on CR 00 20 but in a different format. CR 00 28 directly declares that insuring agreement A.2.—forgery or alteration—is not applicable to dishonest acts of employees, managers, directors, trustees, or representatives. CR 00 20 declares that the insurance offered by CR 00 20 as a whole does not apply to such acts, except when covered by the employee theft insuring agreement. However, the bottom line is that, unless the insured has purchased employee theft coverage, insurers are not going to cover losses resulting from theft or dishonest acts by any those who are part and parcel of the named insured's business operations. Employees, managers, directors, and trustees are seen as extensions of the named insured and, just as dishonest acts by the named insured would not be insurable, so too are dishonest acts by those “extensions” not insurable. The crime policies will cover theft by an employee, but that is the extent of it.

Analysis

These conditions offer nothing out of the ordinary for the average insured. The cancellation condition notes that the first named insured can cancel the policy by sending notice to the insurer with no time restraints. The insurer can cancel the policy but must give the insured at least ten days notice before cancellation takes effect if the cancellation is for nonpayment of premium; thirty days notice is required if the cancellation is for any other reason. The first named insured not only gets the notice of cancellation, but also gets the return premium if there is any. This premium refund is on a pro rata basis if the insurer cancels the policy. The insurer states that if the insured cancels the policy, the refund may be less than pro rata. This is meant to cover certain administrative costs expended by the insurer in the writing and canceling of the policy; however, some states are now forbidding this type of cancellation and are requiring a pro rata cancellation even if the insured cancels the policy. Finally, this cancellation clause states that if notice of cancellation is mailed, proof of mailing is sufficient proof of notice. This means the insured or the insurer, if canceling a policy, should mail the notice on a certified, return receipt requested basis.

The changes condition notes that the policy's terms can be amended or waived only by endorsement that is made a part of the policy. A verbal acquiescence by the agent or a company representative will not do if the insured wants some changes to the policy. The first named insured is the one recognized by the insurer as the spokesman for the insureds in making changes in the terms of the policy.