1. Forms
2. CR
3. CR-00-23

What the form is

The CR 00 23 Commercial Crime Policy (Loss Sustained Form) is a standard insurance policy developed by ISO designed to protect businesses from financial losses due to various criminal acts. It is a 'monoline' policy, meaning it can be written as a standalone policy and includes its own terms, conditions, and declarations, rather than being part of a package policy. The 'Loss Sustained' basis means that for a loss to be covered, it must occur during the policy period and be discovered by the insured either during that same policy period or within a specified time after the policy ends (typically one year). This contrasts with a 'Discovery' form (like CR 00 22) which covers losses discovered during the policy period, regardless of when they actually occurred (subject to certain conditions).

The policy contains several distinct insuring agreements, and coverage under a specific agreement is activated only if a limit of insurance and a deductible are shown for it in the policy declarations. Common insuring agreements include Employee Theft, Forgery or Alteration, Inside the Premises – Theft of Money and Securities, Inside the Premises – Robbery or Safe Burglary of Other Property, Outside the Premises, Computer Fraud, and Money Orders and Counterfeit Money.

Classes of business it applies to

This form is suitable for a wide range of commercial enterprises that face exposures to crime. Examples include:

• Retail Businesses: Exposed to employee theft, robbery of cash on premises, and counterfeit currency.
• Manufacturing Companies: Risks include employee theft of raw materials or finished goods, and forgery of company checks.
• Service Industries: (e.g., janitorial services, contractors) May need coverage for employee dishonesty, especially if employees work at client premises (though specific endorsements like CR 04 01 Clients' Property might be needed for robust coverage in such scenarios).
• Non-Profit Organizations: Susceptible to internal fraud and theft of funds.
• Professional Offices: (e.g., law firms, accounting firms) Face risks of forgery, alteration, and employee theft of client or company funds.

Essentially, any business that handles cash, securities, or valuable property, has employees, or is vulnerable to forgery or computer-related fraud can benefit from this coverage.

Special considerations

• Loss Sustained Trigger: The timing of both the occurrence of the loss and its discovery is critical. Losses occurring before the policy period are generally not covered, even if discovered during the policy period (unless covered under provisions for loss sustained during prior insurance).
• Prior Insurance: The form includes provisions that may provide coverage for losses that occurred during a prior, expired crime insurance policy, provided coverage has been continuous and the loss would have been covered under both the old and new policies. However, the limit of insurance applicable is often the lesser of the current policy's limit or the prior policy's limit.
• Monoline Nature: As a 'Policy' form, it incorporates its own general conditions, making a separate Common Policy Conditions form (like IL 00 17) unnecessary, though its provisions are similar.
• Edition Date Impact: Significant revisions can occur with new editions. For example, the June 2022 editions of ISO crime forms introduced major changes, including renaming 'Employee Theft' to 'Fidelity' and altering how coverage for ERISA plan official dishonesty is provided, requiring a separate election. It is crucial to refer to the specific edition date of the policy in use.
• Territory: Coverage is typically limited to losses occurring within the United States, its territories and possessions, Puerto Rico, and Canada.

Key information for agents and underwriters

• Risk Assessment: Underwriters should thoroughly evaluate the applicant's internal controls, employee screening practices, segregation of duties, cash management procedures, physical security measures (safes, alarms, access controls), and cybersecurity protocols.
• Coverage Customization: Agents must work with clients to identify their specific crime exposures and select the appropriate insuring agreements and limits. Not all insuring agreements are automatically active.
• Understanding 'Loss Sustained': Agents need to clearly explain the implications of the 'loss sustained' trigger to clients, especially when comparing it to a 'discovery' form. For businesses with potential unknown prior acts, a discovery form might be more suitable if available and elected.
• Potential Gaps: Be aware of potential gaps such as insufficient limits, high deductibles, or exclusions for certain types of sophisticated cyber fraud that may go beyond the standard Computer Fraud insuring agreement. Specialized cyber liability policies might be necessary for broader electronic crime coverage.
• Valuation: Historically, ISO crime forms moved towards replacement cost valuation for property other than money and securities, which is more favorable than actual cash value. The specific policy edition will dictate the valuation method.
• Endorsements: Numerous endorsements are available to modify coverage, such as adding coverage for Clients' Property (CR 04 01) or Funds Transfer Fraud (CR 04 02). Agents should be familiar with these to tailor the policy.