1. Forms
2. CR
3. CR-50-09

What the form is

The CR 50 09 Policy Change (Discovery Form) is an endorsement used to modify the terms and conditions of a Commercial Crime insurance policy that utilizes a "discovery" coverage trigger. A discovery basis means that the policy covers losses that are discovered during the policy period, regardless of when the actual loss occurred, subject to any specified retroactive date. This form was developed as part of the 1998 Multistate Commercial Crime Revisions by ISO, which aimed to offer insurers and insureds more flexibility by providing options for either a discovery or a loss sustained basis for crime coverage.

Classes of business it applies to

This endorsement applies to any commercial entity that has purchased a Commercial Crime policy written on a discovery basis and requires amendments to that policy. Commercial Crime insurance is crucial for a wide array of businesses seeking protection against financial losses resulting from criminal acts such as:

• Employee theft or dishonesty
• Forgery or alteration
• Theft of money and securities
• Computer and funds transfer fraud
• Counterfeit money

Real-world examples of businesses that would use such a policy (and therefore this endorsement for changes) include:

• Financial institutions (banks, credit unions)
• Retail stores and e-commerce businesses
• Manufacturing companies
• Healthcare providers and hospitals
• Non-profit organizations
• Service industries

Special considerations

There are several important points to consider when using the CR 50 09 endorsement:

• Discovery Basis Specific: This form is exclusively for policies written on a discovery basis. If the underlying Commercial Crime policy is on a "loss sustained" basis (covering losses sustained during the policy period and discovered during the policy period or a limited time after), the CR 50 01 Policy Change (Loss Sustained Form) would be the appropriate endorsement.
• Retroactive Coverage: The discovery trigger can provide coverage for losses that occurred prior to the policy's inception date, as long as they are discovered during the policy period and after any applicable retroactive date. Changes made via CR 50 09 could potentially impact this retroactive coverage, so careful attention to policy wording is essential.
• Superseded Coverage: If a discovery-based policy replaces a prior loss-sustained policy, endorsements like the CR 50 05 Policy Bridge may also be relevant to ensure continuous coverage.

Key information for agents and underwriters

Agents and underwriters should be mindful of the following when dealing with the CR 50 09:

• Underlying Form Verification: Always confirm that the policy being endorsed is indeed a discovery-based crime policy, likely utilizing a form like CR 11 00 Crime General Provisions (Discovery Form).
• Clarity of Changes: Ensure that any modifications made through this endorsement are clearly communicated to and understood by the insured. The impact on the scope of coverage, especially concerning the discovery provision and any retroactive dates, must be transparent.
• Risk Assessment: For underwriters, changes to a discovery form require careful assessment of potential prior acts exposure. The long-tail nature of discovery coverage means that losses could be reported long after the actual act, and policy changes could alter this exposure.
• Pricing Implications: Modifications to the policy might necessitate adjustments to the premium. The broader potential coverage window under a discovery form can influence pricing considerations.
• Documentation: All endorsements, including CR 50 09, should be meticulously documented and retained with the policy file.