Government Crime Policy—Archived Article

July, 2000

Discovery or Loss Sustained Form

Summary: As with the commercial crime policy—see Commercial Crime Policy—the new program incorporates two government crime forms, discovery and loss sustained. Eligible risks include most local governments, public utilities, fire districts, transit authorities, and state-funded hospitals. Also eligible are school districts or boards of education, and state schools, colleges, and universities.

These policies are almost identical to the commercial crime policy. This treatment discusses the differences. The only policy language reproduced is where the government policies differ from the commercial policy.

Topics covered:
Definitions
Employee theft—per loss or per employee
Exclusions
Conditions

 

Definitions

As with the commercial crime policy, the definitions are discussed here first. Only those definitions that differ from the commercial crime policy are highlighted. The following terms that are defined in the commercial crime policy are not included in the government crime policy: client; employee benefit plan(s); manager; and member. Even though the government policy, like the commercial policy, defines an employee as one associated with or handling the funds of an employee benefit plan, only the commercial policy defines employee benefit plan.

The omission of the definition of “employee benefit plan” may be significant. If money is missing from an “employee benefit plan” there may be some question of coverage if “employee benefit plan” is not defined.

The government policy defines employee in a slightly different fashion, in the section on what does not constitute an employee. The commercial policy says that employee does not include “any agent, broker, person leased to you by a labor leasing firm, factor, commission merchant, consignee, independent contractor or representative of the same general character.” The government policy eliminates from the exception: “broker,” “factor,” “commission merchant,” and “consignee.”

The government policy removes the following from the definition of “messenger”: “relative” of the named insured; and “partners” or “members.” The government policy also adds a section to the definition of “occurrence” to accommodate the “per employee” insuring agreement for employee theft (discussed below).

Employee Theft—Per Loss or Per Employee

The first difference between the government and commercial crime policies is in the insuring agreement for employee theft. The government policy has two agreements—one pays on a per loss basis; the other on a per employee basis.

A.     Insuring Agreements

1.     Employee Theft – Per Loss Coverage

     We will pay for loss of or damage to “money”, “securities” and “other property” resulting directly from “theft” committed by an “employee”, whether identified or not, acting alone or in collusion with other persons.

2.     Employee Theft – Per Employee Coverage

     We will pay for loss of or damage to “money”, “securities” and “other property” resulting directly from “theft” committed by each “employee”, whether identified or not, acting alone or in collusion with other persons.

Analysis

With these two agreements, the government policy promises to pay for loss of covered property due to theft by an employee (per loss) or by each employee (per employee).

Exclusions

D.     Exclusions

1.     This policy does not apply to:

a.     Acts Committed by You

     Loss resulting from “theft” or any other dishonest act committed by you; or any other dishonest act committed by you, whether acting alone or in collusion with other persons.

b.     Acts Of Officials, Employees or Representative

     Loss resulting from “theft” or any other dishonest act committed by any of your officials, “employees”, or authorized representatives:

(1)     Whether acting alone or in collusion with other persons; or

(2)     While performing services for you or otherwise;

     except when covered under Insuring Agreement A.1. or A.2.

Analysis

The wording of the government policy is different to recognize the fact that a government entity does not have “partners,” “members,” “managers,” “directors,” or “trustees.” The government policy does exclude coverage for acts committed by “employees” or “representatives.”

This premium content is locked for FC&S Coverage Interpretation Subscribers

Enjoy unlimited access to the trusted solution for successful interpretation and analyses of complex insurance policies.

  • Quality content from industry experts with over 60 years insurance experience, combined
  • Customizable alerts of changes in relevant policies and trends
  • Search and navigate Q&As to find answers to your specific questions
  • Filter by article, discussion, analysis and more to find the exact information you’re looking for
  • Continually updated to bring you the latest reports, trending topics, and coverage analysis