CR 04 06-Inside The Premises-Robbery Of A Watchperson Or Burglary Of Other Property

251.6-7CR 04 06–INSIDE THE PREMISES–ROBBERY OF A WATCHPERSON OR BURGLARY OF OTHER PROPERTY

(July 2019)

INTRODUCTION

This endorsement should be used when the broader coverage that the Insurance Services Office (ISO) CP 10 30–Special Causes of Loss used with commercial property coverage forms provides is either not available or is considered to be more coverage than necessary.

ELIGIBILITY

This coverage can be added to any Insurance Services Office (ISO) Commercial Crime or Government Crime Coverage Form or Policy.

LIMIT AND DEDUCTIBLE

The limit and deductible must be entered on the declarations next to the description of this insuring agreement.

ANALYSIS

This is an endorsement to the ISO Commercial Crime or Government Crime Coverage Forms and Policies and is subject to their conditions, definitions, and exclusions. The only changes are those within the endorsement.

A. Insuring Agreement

This insuring agreement has two separate parts:

1. There is coverage for loss of or damage to property that is not money and securities but only while it is inside the premises. The loss or damage must be caused by robbery of a watchperson or burglary. These events can be actual or attempted.

2. Loss or damage to the premises or its exterior because of actions described in item 1 is also covered. This part of the coverage applies only if the named insured owns the premises or is legally liable for such damage.

Note: Coverage does not apply unless there is actual evidence of a crime. There must be visible marks of forced entry or exit or the watchperson must have been threatened.

 

Example: Harry opens his store for business one morning and discovers that four crates of cigarette cartons that were stored in the back room are missing. This loss is not covered because there is no evidence of forced entry.

B. Exclusions

The exclusions in the ISO Commercial Crime or Government Crime Coverage Forms and Policies that apply to all Insuring Agreements apply. It is important to note that the exclusions that apply specifically to Insuring Agreement 3, Inside the Premises–Theft of Money and Securities do not apply to this insuring agreement. However, the following five exclusions are specific to this insuring agreement:

1. There is no coverage if a loss occurs because the level of risk within the named insured’s control increased and the named insured did not take corrective action.

2. Fire damage is excluded but there is one exception. Fire damage to a safe or vault is covered.

Note: This coverage is not intended to be a substitute for property insurance.

 

Example: Burglars remove the safe from the premises so they can open it later. The police recover the safe. The door was still locked but the safe itself was badly damaged by the acetylene torches the burglars used to try to open it. The fire damage to the safe is covered.

 

3. Coverage does not apply to losses that occur during a fire inside the premises.

Note: This means that losses that occur during firefighting efforts are also not covered.

 

Example: The fire department responded to a small fire at Nigel's TV and Appliance Store. The firefighting efforts were successful. However, inspecting his store after the fire, Nigel noticed that a number of televisions were missing from the part of the building that the fire did not affect. Burglars had apparently entered through a door that was left open by the fire fighters. Coverage does not apply because the burglary happened during firefighting activities.

 

4. Property covered does not include motor vehicles, trailers, semi-trailers, and any accessories attached to them.

5. There is no coverage for loss or damage that vandalism or malicious mischief causes. There are no exceptions.

C. Conditions

CR 04 06 adds two conditions to the conditions in the coverage form or policy:

1. All coverage is suspended after a loss until the premises or location is returned to the same condition and level of security that existed before the loss or damage occurred. However, this suspension is waived as long as at least one watchperson is on the premises whenever the premises is closed for business.

 

Example: Thieves kick in the door at Patrick’s Bakery, break the lock, and take property valued at $10,000. Patrick staples a tarp over the opening until a new door can be installed. The thieves return that night, slash through the tarp and remove the remaining $15,000 of property. The first loss is covered. The second is not because the security level was less than the level that existed before the first loss.

 

2. $5,000 is the maximum amount available in any one occurrence for loss of precious metals, precious or semiprecious stones, pearls, furs, or fur articles. This limit also applies to articles whose principal value is derived from the fur, precious metals, or precious stones, whether they are complete or not. This limit also applies to any kind of manuscripts, drawings, or records or the cost to reconstruct them or reproduce any information in them.

 

Example: The Coat Company makes a popular fur-trimmed ladies’ jacket with a wholesale value of $500. The wholesale value of the fur component is $150. The jacket is not subject to this limitation because the fur trim makes up less than one-third of the jacket’s full value.

D. Definitions

1. CR 04 06 replaces the definition of watchperson in the Commercial Crime or Government Crime Coverage Forms and Policies with the following:

Watchperson

Any person the named insured retains specifically to have care and custody of property inside the premises. Watchpersons do not have any other duties.

In addition, janitors employed by the named insured and having care and custody of covered property are watchpersons.

Note: The difference between this definition and the definition in the coverage form is that it includes janitors as watchpersons.

2. CR 04 06 adds the following definition:

Burglary

There are two parts to the burglary definition. The first is that property must be taken in an unlawful manner from the inside of the premises. The second part involves the manner in which the person came into or left the premises. There must be physical evidence or marks showing that the person entered or exited the building forcibly.

 

Examples:

Scenario 1: John works for Grant’s Fast Food. He realizes he left his backpack at the restaurant when he gets home after his shift. He really needs the backpack but does not have a key. Instead of calling his boss to ask for a key, he breaks open a window, enters, takes his backpack, and leaves. This is not a burglary because John did not take any property unlawfully.

Scenario 2: John’s boss fires him after he discovers that he broke into the store after hours. John is upset. He slips into the back room when no one is looking and steals a box of beef patties and quickly leaves the building. While he took property unlawfully and was on the premises unlawfully, because there were no visible marks of forced entry or exit a burglary has not occurred.