(July 2019)
ACORD forms are designed for use with products associated with standard industry rating and forms organizations such as the Insurance Services Office (ISO) with its coverage forms and policies, manuals, rules, and rating plans. One of them is the Commercial Crime Coverages. For the most part, ACORD forms are relatively generic in nature. Commercial Crime Coverage may be written in combination with a specific independent specialty or company program. In that case, company specific forms may be needed for that account instead of (or in addition to) the usual ACORD forms that apply. That is because more information, detail, or in-depth hazard analysis is needed than what the corresponding ACORD form provides.
RELEVANT
ACORD FORMS
Note: Only countrywide forms are listed in this section. State specific ACORD forms are not listed.
Form 125–Commercial Insurance Application
All information requested in this form is relevant and important. The appropriate boxes should be checked so the insurer’s underwriter understands the lines of insurance being submitted for consideration. The first named insured and all other named insureds must be listed. The applicant information is important for both coverage issues and to provide the contact information for inspections, financial, and premium audit functions. Loss information on larger accounts should probably be submitted in the form of copies of currently valued loss runs for the past five years, as well as for the current year to date. Accurate and currently valued loss information for the latest three full and complete years is required for experience rating on larger accounts.
Form 141–Crime Section 2000
|
Coverage Section: |
Insuring
Agreement # |
|
Employee Theft/Government Crime Employee Theft |
1 |
|
Forgery or Alteration |
2 |
|
Inside the Premises–Theft of Money and Securities |
3 |
|
Inside the Premises–Robbery or Safe Burglary of Other Property |
4 |
|
Outside the Premises |
5 |
|
Computer and Funds Transfer Fraud |
6 |
|
Money Orders and Counterfeit Money |
7 |
Coverage Endorsement Section
Any optional or additional coverage endorsements are listed in this section.
ERISA Employee Dishonesty–Additional Information Section
This is where covered employee benefits plans are listed. The plan name, principal address, number of trustees, employees, and others who handle assets, and the number of plan participants must be entered in the spaces provided. This information is very important when the crime coverage is used to satisfy the named insured’s ERISA bond requirements.
General Information Section
The information contained in this section is critical for underwriting and rating purposes. All questions must be answered and any "yes" responses explained in the Remarks section.
Related Article: ISO Commercial Crime Coverages Rating Considerations
Classification of Employees/Locations
This section is important to accurately underwrite and rate employee theft. The following must be entered:
Hiring Practices
None of these questions require an explanation. However, the impact of a “no” response to any of these eight questions can be significant. From an underwriting standpoint, a yes answer is expected.
Controls and Audit Procedures Section
Questions in this section apply to employee theft coverage. Complete information is critical for underwriting purposes. Any questions in the banking or other boxes marked "no" should have a comment or an explanation in the Remarks section. Questions answered "no" should be discussed with the named insured. A “no” answer usually means there is an exposure to employee dishonesty claims that could be reduced by making changes.
Money and Securities Section
This section acts as a worksheet to both calculate the exposure to loss by listing actual maximum exposures by various categories and to test whether the insurance limits selected are adequate to reflect the true loss potential. It is very important to note that maximum exposure is entered, not the limits requested.
Purchasing/Receiving Controls
This section outlines the inventory controls in place to prevent employee theft. Any “no” answer should be reviewed as a possible loss scenario.
Computer Fraud Controls
These questions identify possible failures on the named insured’s part to safeguard itself against computer fraud.
Property Section
The type of property, merchandise, or stock the named insured handles should be listed and described. The rating classifications and loss costs generally reflect the exposure to loss. However, a given insured may not be involved with all the property, merchandise, or stock that the classification usually includes. The named insured may also have merchandise more susceptible or subject to losses due to theft and burglary. The maximum value should be the property, merchandise, or stock’s replacement value.
Miscellaneous Information Section
These questions give the underwriter information about hours of operation, the number of employees on duty during business hours, deposit procedures and frequency, annual gross sales, and the type of door locks. Additional space is provided for other relevant information.
Safe/Vault Section
These questions are very specific and highly technical. Information about safes and vaults is usually inside the frame of the door, on the inside of the door, or elsewhere inside the safe and smaller or older vaults. Information about newer or sophisticated vaults is usually available from the manufacturer.
Messenger Protection Section
This section provides information about the number of guards who accompany a messenger and whether or not a private conveyance and a safety satchel are used. All this information has a direct effect on rating and premium development.
Premises/Safe Protection Section
The questions in this section help the underwriter evaluate the extent of premises protection and intruder detection. Details on the type of alarm and the alarm description must be provided. Central station protection requires obtaining the certificate number and expiration date. The alarm’s manufacturer must be disclosed as well as including information on who maintains the system, how it works, and who is notified when it is activated. This section also has questions about fences and floodlights and has space for information about additional protection, such as security cameras. All accessible openings should be investigated to determine if they are properly protected.
Employee Section
This section is completed only when an employee is to be scheduled with a specific limit of insurance.
Remarks Section
This section is where any “yes” responses from the previous sections are explained or where additional comments needed are made.