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  3. CR-00-22

What it does

CR 00 22 is the ISO stand-alone crime policy: the common policy conditions are written into the form, so it is issued with its own CR DS 02 declarations instead of as part of a package. Coverage applies only to the insuring agreements that show a limit in the declarations. The 06 22 edition offers eight insuring agreements:

  • 1. Fidelity: (a) Employee Theft, (b) ERISA Plan Official Dishonesty, (c) Employee Theft Of Clients' Property
  • 2. Forgery Or Alteration: (a) negotiable instruments, with defense costs for a suit over a refused instrument paid in addition to the limit; (b) forgery of payment card instruments
  • 3. Inside The Premises – Theft Of Money And Securities (including disappearance or destruction, and damage to the premises, safes and cash drawers)
  • 4. Inside The Premises – Robbery Or Safe Burglary Of Other Property
  • 5. Outside The Premises: money and securities with a messenger or armored car company, and robbery of other property
  • 6. Computer And Funds Transfer Fraud: fraudulent entry or change of data in a computer system, and a bank acting on a fraudulent transfer instruction issued by an impostor
  • 7. Fraudulent Impersonation: the insured itself acting in good faith on a transfer instruction or a change-of-account request that an impostor sent in the name of an authorized person, client or vendor
  • 8. Money Orders And Counterfeit Money

This is the discovery version: it pays for loss from an "occurrence" taking place at any time, as long as the loss is discovered by a designated person during the policy period or the extended period to discover loss (60 days after cancellation, or one year for an ERISA plan). A retroactive date can be added with CR 20 05 to cut off old acts.

Who needs it

Every business that handles money, has employees, pays vendors electronically or holds client property. Employee theft is the core exposure for most small and mid-size accounts, and lenders, franchisors, landlords, and service contracts (for example janitorial, staffing and IT firms working inside client sites) often require crime or fidelity coverage. Employers that sponsor a 401(k) or other ERISA plan need the plan bonded, and this form can satisfy that bond when the plan is named and the ERISA agreement is written.

Key provisions and changes in the 06 22 edition

  • Losses must be "discovered" by a "designated person" (risk manager, partner, member, manager, director, trustee, officer, the highest-ranking employee at the location, or a benefit plan administrator or trustee) instead of simply "you" as in the 11 15 edition.
  • Employee theft is now one of three parts of a Fidelity insuring agreement. ERISA plan losses moved out of employee theft into a separate ERISA Plan Official Dishonesty agreement that must carry its own limit.
  • Fraudulent impersonation (formerly endorsement CR 04 17) and payment card forgery (formerly CR 25 20) are built into the form, which is why carriers replaced those endorsements and CR 25 47 when they moved to 06 22.
  • The territory condition covers occurrences anywhere in the world; the 11 15 edition was limited to the United States, its territories and possessions, Puerto Rico and Canada.

Exclusions include acts of the named insured, partners and members; acts of employees except under the fidelity agreements; prior-known dishonest employees; confidential information and data breach costs; indirect loss; ransom and cyber extortion; legal fees; virtual currency; war and nuclear hazards. Coverage for an employee ends as soon as a designated person or an HR employee learns of a dishonest act by that person.

Quoting and selling notes

  • Ask for the total number of employees, who handles cash and payments, who reconciles bank accounts, whether duties are segregated, and whether there is an annual audit.
  • Ask whether the insured sponsors a 401(k) or other ERISA plan. If so, schedule the plans and set the ERISA Plan Official Dishonesty limit at least at the ERISA minimum: 10% of plan funds handled, not less than $1,000 and not more than $500,000 ($1,000,000 for plans holding employer securities). No deductible applies to that agreement.
  • Fraudulent impersonation has its own limit line in the declarations. Before paying on a change-of-account request or transfer instruction, the insured must make a reasonable effort to authenticate it with the client, vendor or another authorized person, not by email, and document the result; walk the client through that condition. CR 25 55 amends the verification condition and CR 04 18 broadens the agreement.
  • Crypto is excluded by the base form; CR 25 45/CR 25 46 can add virtual currency back as "money".

Related forms

Declarations: CR DS 01 (coverage part) or CR DS 02 (policy). Companion trigger version: CR 00 23, CR 00 20. Common endorsements: CR 20 05, CR 25 41, CR 25 09, CR 04 01, CR 04 18, CR 25 50.