Q

Our insured owns a pizza restaurant. The same individual broke into the premises and stole cash on many different occasions. The insured has crime coverage form CR 00 04 10 90 for theft, disappearance and destruction.

Under this form, “occurrence” is defined as an “act or series of related acts involving one or more persons; or [an] act or event, or a series of related acts or events.” Since the acts were committed by one person, our insured thinks that the acts were a single related occurrence, and that only one deductible should apply.

But the insurer says that the deductible should apply to each theft, because in order to qualify as a single occurrence the thefts should take place within a single date.

What do you think?

New Mexico Subscriber

A

Quite possibly the insurer is taking the approach that, since the thefts took place over a period of time they cannot be one “occurrence.” But in two cases in which the definition of “occurrence” was identical to that in your insured's policy, the courts determined that one “occurrence” took place. In the case of Christ Lutheran Church v. State Farm Fire and Casualty Co., 471 S.E. 2d 124 (N.C. 1996), an employee embezzled several thousand dollars over the course of time. The court found that although some twenty-four checks had been altered or forged by one person, there was still only one “occurrence.” And in the case of Bethany Christian Church v. Preferred Risk Mutual, 942 F. Supp. 330 (1996), the same conclusion, involving similar circumstances, was reached. In the one case that reached a different conclusion—that repeated thefts by one thief were not one occurrence, the policy language referred to “separately occurring events.”  

The crime form deductible clause states that the insurer will not pay for loss in any one “occurrence” unless the amount of loss exceeds the deductible amount indicated in the declarations, and then will pay up to the limit of insurance. But there is nothing in the form itself that states that a day's time frame—or indeed, any time frame other than the policy period—applies.

Because there is nothing in the policy definition of “occurrence” that refers to a date of loss, and because the thefts appear to fit the definition by virtue of being a “series of related acts involving one…person,” we are of the opinion that the insured should be entitled to the benefit of the doubt, with one deductible applying.