Summary: This article deals with revisions to endorsements that are available to modify the ISO crime forms. The endorsements were revised in late 2007. The common crime endorsements have been developed to either accommodate changes of a general nature to the various coverage forms and policies, or to modify provisions in those forms and policies. The endorsements are presented in numerical order.

Topics covered:

Policy Change CR 20 01

Policy Bridge CR 20 03

Extended Period to Discover Loss CR 20 04

Retroactive Date CR 20 05

Aggregate Limit of Insurance CR 20 08

Amend Territorial Limits CR 20 09

Contributing Insurance CR 20 10

Coindemnity CR 20 11

Binding Arbitration 20 12

Joint Loss Payable CR 20 15

Notice of Cancellation CR 20 16

Joint Venture or Partnership as Insureds CR 20 18

Obligee CR 20 19

Calculation of Premium CR 20 20

Exclusion of Computer-Related Losses CR 20 21

Policy Change (Discovery Form), CR 20 01 08 07

 This endorsement pertains to the discovery version of the new crime forms; CR 20 02 07 02 is used for the loss sustained version. CR 20 01 allows for revisions to be made on the coverage forms as to named insureds, mailing addresses, policy periods (extended or reduced), and insuring agreements (added, deleted, or changed); CR 20 01 also allows other endorsements to be added, deleted, or changed as respects the limits of insurance. The endorsement offers a schedule for the insured to note the revisions.

 When it comes to the addition of coverage, an increase in the limit of insurance, and the addition or increase in the deductible, CR 20 01 notes that the changes apply to loss or damage resulting from acts committed or events occurring at any time; but, such acts or events have to be discovered by the named insured on or after the effective date of change. Revisions to the endorsement state that if a retroactive date endorsement is used, that the provisions of that endorsement are controlling. As for deletion of coverage, CR 20 01 advises that the change applies to loss or damage resulting from acts committed or events occurring on or after the effective date of change, and before the effective date of change if discovered by the named insured after sixty days from that date. The deletion of coverage clause has been modified for clarification.

 CR 20 02 applies to the loss sustained version of the form and notes that, when it comes to the addition of a deductible or an increase in a deductible, the change applies to loss or damage resulting from acts committed or events occurring at any time, whether before or after the effective date of change. Revisions to the form note that the discovery must be made after the effective date of change. As for deletion of coverage or a decrease in the limit of insurance, the change applies to loss or damage resulting from acts committed or events occurring on or after the effective date of change, and before the effective date of change if discovered by the named insured after one year from that date.

 Both CR 20 01 and CR 20 02 have removed the language that no limit of insurance during any period will be cumulative with any other amount applicable to the same coverage during any other period.

Policy Bridge – Discovery Replacing Loss Sustained, CR 20 03 03 00

 Both the discovery version and the loss sustained version of the crime coverage form offer the insured an extended period to discover loss, and this endorsement does not change that offer. However, both also dictate that the extended period of time terminates immediately upon the effective date of any other replacement insurance being obtained by the named insured; this endorsement does affect that process. For example, should the insured replace a loss sustained policy with a discovery policy, endorsement CR 20 03 does provide for coverage to a degree. If the loss is discovered during the extended period of time, and if the amount of loss exceeds the limit of insurance of the prior policy, the insurer, through the provisions of CR 20 03, will pay for the excess loss. The deductible on the current policy will not be applied, but the payment made by the insurer will not be greater than the difference between the limit of insurance of the prior policy and the limit on the current policy. There have been no changes to this endorsement.

 Extended Period to Discover Loss, CR 20 04 08 07

 The discovery version of the crime coverage form allows for an extended period to discover loss of sixty days from the date of the termination or cancellation of the policy. Endorsement CR 20 04 08 07 replaces this sixty day period with an open time frame. The endorsement has a schedule on which the insured can list whatever number of days is agreed to by the insured and the insurer. There have been no changes to this endorsement.

Retroactive Date, CR 20 05 08 07

 This endorsement changes the discovery condition on the crime coverage forms. The insured lists a retroactive date on CR 20 05, and the insurer declares that it will only pay for loss that the named insured sustains through acts committed or events occurring after the retroactive date shown on CR 20 05. The loss still has to be discovered by the named insured during the policy period or the extended period, but the acts and events causing the loss have to occur after the retroactive date and not at any time, as the unmodified coverage forms have it. Changes to this policy now specify that when the retroactive date applies to a joint insured, coverage applies to a loss sustained resulting from an occurrence involving the joint insured shown in the schedule. Previously the joint insured did not need to be listed on the schedule.

CR 20 06 03 00 and CR 20 07 03 00 also declare a specific retroactive date, but the former endorsement is for a specified joint insured and the latter is for an entity acquired through consolidation or merger. No changes have been made to these endorsements.

 Aggregate Limit of Insurance, CR 20 08 08 07

 Endorsement CR 20 08 puts an aggregate limit on the crime coverage forms for all loss discovered during the policy period, regardless of the number of occurrences. The form now references the policy period shown in the Declarations. The limit of insurance is reduced by the amount of payment made by the insurer, and if the limit of insurance is exhausted, the insurer declares that it has no further liability to pay for losses that may be discovered during the remainder the policy period. The insurer also states that any recovery made after settlement of a loss will not be used to increase or reinstate the limit of insurance. If a loss of securities is settled through use of a Lost Securities Bond, the prior form stated that such loss would not reduce the limit of insurance. The revised form states that the limit shall not be reduced unless a payment is made under a Lost Securities Bond and then the limit of insurance is reduced only by the amount of payment.

 Amend Territorial Limits, CR 20 09 08 07

 A simply worded endorsement, CR 20 09 states that "the territory condition is amended by adding or deleting the territory shown in the schedule." The standard covered territory is the U.S., Puerto Rico, and Canada . CR 20 09 allows a change to this set agenda. Very minor editorial changes have been made.

 Contributing Insurance, CR 20 10 08 07

 This endorsement requires the insured to keep other similar insurance in effect while he also has a crime coverage form in effect. Payments for a loss are made on a pro-rata basis between the coverage form and the contributing insurance. Very minor editorial changes have been made.

 Coindemnity, CR 20 11 08 07

 CR 20 11 allows several different companies to share limits of liability for the various insuring agreements that are offered by the crime coverage forms. For example, if the insured has purchased computer fraud coverage in the amount of $2,000,000, but the insurer wants that amount to be underwritten by four separate insurers, CR 20 11 can be used to list the sharing companies and the amounts they are underwriting. So, if a loss occurs, each company will pay no more than a pro-rata share. Revisions to the endorsement now show the share insured by percentage instead of dollar amount. The endorsement does allow the listing of a controlling company which acts as something like a first named insured, in that the controlling company receives notice of a loss and sends and receives notice of cancellation. The language stating that the controlling company collects premiums has been removed. New to the form is the statement that all terms and conditions of this insurance are amended to conform to this endorsement.

 Binding Arbitration, CR 20 12 08 07

 If the named insured and the insurer disagree on the amount of loss, both parties may agree to arbitration; CR 20 12 provides the process for the arbitration. CR 20 12 is used when binding arbitration is desired, and CR 20 13 08 07 is used when nonbinding arbitration is the choice. The same changes appear in both forms; now either party may make a written demand for arbitration, and a decision agreed to by any two of the arbitrators will be binding. In the prior form both parties had to agree to arbitration and the agreement was not binding.

 Joint Loss Payable, CR 20 15 08 07

 This endorsement provides that any payment for a loss will be made jointly to the named insured and the loss payee that is listed on the endorsement's schedule. The insurer will not make any payment solely to the named insured unless it receives a request in writing from the loss payee to do so. CR 20 14 08 07 is the more common loss payable endorsement wherein any loss payable under the insurance is to be paid to the loss payee as its interests may appear. Both forms have been changed by the removal of the clause that liability under this insurance as extended by this endorsement is not cumulative.

 Notice of Cancellation, CR 20 16 08 07

 Through the provisions of this endorsement, the insurer agrees to provide the scheduled entity with written notice of the cancellation of the insurance. This notice is to be made within the number of days shown on the endorsement. The insurer declares that failure to provide such a notice does not delay the effective date of the cancellation. CR 20 17 08 07 also calls for notice of cancellation to be given to the scheduled entity, but that endorsement requires notice be received by the entity in order for the cancellation to be effective.

 Joint Venture or Partnership as Insureds, CR 20 18 08 07

 CR 20 18 provides that each joint venture or partnership shown in the schedule is added to the coverage as a named insured. This endorsement is available only for the commercial crime coverage form and policy, and the employee theft and forgery policy. CR 20 18 has no relevance for the government crime coverage form and policy.

 Obligee, CR 20 19 08 07

 This endorsement is only for the government crime coverage form and policy. CR 20 19 provides that the obligee shown in the schedule will be indemnified for loss covered by the insurance. Notice of cancellation has to be mailed to both the named insured and the obligee. Minor editorial changes have been made in this form.

 Calculation of Premium, CR 20 20 08 07

 CR 20 20 modifies the commercial crime policy, the employee theft and forgery policy, and the government crime policy. The endorsement notifies the insured that the premium shown in the declarations is computed based on rates in effect at the time the policy was issued. Then, the endorsement goes on, at each renewal, continuation, or anniversary of the effective date of the policy, the premium is computed in accordance with the rates and rules of the insurer then in effect. This endorsement no longer modifies coverage under the Kidnap/Ransom and Extortion Coverage Form.

 Exclusion of Computer-Related Losses, CR 20 21 08 07

 This endorsement applies to the commercial crime policy, the employee theft and forgery policy, and the government crime policy. Through CR 20 21, the insurer declares that it will not pay for loss or damage resulting directly or indirectly from the failure or inadequacy of computers to correctly recognize, process, or interpret one or more dates or times. The example discussed is the inability of computer software to recognize the year 2000. The insurer also notes that it will not pay for repair, replacement, or modification of any computer-related items that are listed on the endorsement in order to correct any deficiencies.