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Crime Insurance And Surety Bonds

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Question 1
Free
Multiple Choice

In the ISO Commercial Crime Coverage form, theft is defined as the

Choose correct answer/s
A

unlawful taking of property to the deprivation of the insured.

B

unlawful taking of property from the care and custody of a person by someone who has caused or threatens to cause bodily harm or who has committed an unlawful act witnessed by that person.

C

unlawful taking of money or securities through the alteration of a negotiable instrument.

D

unlawful taking of property from inside the premises by someone who unlawfully enters or leaves the premises as evidenced by marks of forcible entry or exit.

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Question 2
Free
Multiple Choice

In the ISO Commercial Crime Coverage form, robbery is defined as the

Choose correct answer/s
A

unlawful taking of property to the deprivation of the insured.

B

unlawful taking of property from the care and custody of a person by someone who has caused or threatens to cause bodily harm or who has committed an unlawful act witnessed by that person.

C

unlawful taking of money or securities through the alteration of a negotiable instrument.

D

unlawful taking of property from inside the premises by someone who unlawfully enters or leaves the premises as evidenced by marks of forcible entry or exit.

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Question 3
Free
Multiple Choice

In the ISO Commercial Crime Coverage form, safe burglary is defined as the

Choose correct answer/s
A

unlawful taking of property to the deprivation of the insured.

B

unlawful taking of property from the care and custody of a person by someone who has caused or threatens to cause bodily harm or who has committed an unlawful act witnessed by that person.

C

unlawful taking of money or securities through the alteration of a negotiable instrument.

D

unlawful taking of property from within a locked safe or vault by someone who enters the safe or vault as evidenced by marks of forcible entry upon the exterior.

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Question 4
Free
Multiple Choice

Which of the following statements is (are) true with regard to the ISO commercial crime coverage forms?
I)The discovery version only covers losses which occur during the policy period.
II)The loss-sustained version covers losses which occur during the policy period and the loss is discovered during the policy period or within one year after the policy expires.

Choose correct answer/s
A

I only

B

II only

C

both I and II

D

neither I nor II

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Question 5
Free
Multiple Choice

A burglar took some blank checks during a break-in at XYZ Company. He was careful to make sure that the theft would be difficult to discover. Three months later, he wrote himself a check for $20,000 and signed the company treasurer's name on the check. After the check was cashed, the loss was discovered. Which commercial crime coverage form would cover this loss?

Choose correct answer/s
A

Inside the Premises-Theft of Money and Securities

B

Money Orders and Counterfeit Currency

C

Forgery or Alteration

D

Outside the Premises

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Question 6
Multiple Choice

All of the following are ISO commercial crime coverage exclusions EXCEPT

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A
dishonest acts committed by a named insured or partner of the named insured.
B
indirect loss resulting from covered losses.
C
theft committed by an employee of the named insured.
D
losses from unauthorized trading in stocks and bonds.
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Question 7
Multiple Choice

Bernice is an underwriter. She is reviewing a commercial crime coverage application. The coverage will be written using the discovery form. Bernice is concerned that a large undiscovered loss may exist prior to the policy's inception date. Which provision should Bernice add to the policy to protect the insurer against liability for such previous losses?

Choose correct answer/s
A
extended reporting endorsement
B
loss sustained during prior insurance provision
C
waiver of inventory provision
D
retroactive date endorsement
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Question 8
Multiple Choice

Which of the following statements is (are) true with respect to financial institution bonds?
I)Fidelity coverage covers losses resulting from the dishonest acts of employees.
II)Financial institutions usually insure their crime exposures through financial institutions bonds.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 9
Multiple Choice

The head teller of a bank embezzled $50,000 from the bank. Which insuring agreement in a financial institution bond is designed to cover such losses?

Choose correct answer/s
A
Insuring Agreement A-Fidelity
B
Insuring Agreement B-On Premises
C
Insuring Agreement C-In Transit
D
Insuring Agreement D-Forgery or Alteration
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Question 10
Multiple Choice

An armed robber pulled a gun on a teller at the Fourth National Bank. He made off with over $10,000 in cash. Which insuring agreement in a financial institution bond is designed to cover such losses?

Choose correct answer/s
A
Insuring Agreement A-Fidelity
B
Insuring Agreement B-On Premises
C
Insuring Agreement C-In Transit
D
Insuring Agreement D-Forgery or Alteration
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Question 11
Multiple Choice

A Pony Express Armored Car was transporting bank receipts from six branch banks to the main bank. A group of robbers staged a daring robbery. They forced the armored car off the road, shot two guards, and took over $120,000 in cash. Which insuring agreement in a financial institution bond would cover the stolen money in this case?

Choose correct answer/s
A
Insuring Agreement A-Fidelity
B
Insuring Agreement B-On Premises
C
Insuring Agreement C-In Transit
D
Insuring Agreement D-Forgery or Alteration
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Question 12
Multiple Choice

Fifth National Bank decided to loan $200,000 to Fred Franklin. As collateral for the loan, Fred posted stock certificates. When Fred defaulted on the loan, Fifth National tried to sell the stock. They discovered the stock certificates were stolen from someone else. Which insuring agreement in a financial institution bond is designed to cover such losses?

Choose correct answer/s
A
Insuring Agreement B-On Premises
B
Insuring Agreement C-In Transit
C
Insuring Agreement D-Forgery or Alteration
D
Insuring Agreement E-Securities
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Question 13
Multiple Choice

Smith is Manager of ABC Department Store. Jones, ABC's Security Director, visited Smith to ask some questions. During questioning, Smith admitted that he stole $10,000 in merchandise. He was disciplined, but not fired. The loss was not reported to the insurer that wrote ABC's crime insurance. Six weeks later, Smith was observed on a surveillance camera stealing over $50,000 in jewelry from ABC. ABC immediately reported the loss to its crime insurer. Which ISO crime coverage condition may prevent ABC from collecting for this loss?

Choose correct answer/s
A
termination as to any employee
B
discovery form
C
loss sustained form
D
loss sustained under prior insurance
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Question 14
Multiple Choice

National Bank believed it had been properly authorized to transfer $250,000 to the off-shore account of one of its corporate customers. The authorization was fraudulent, however, and the transferred funds were stolen. Under which commercial crime coverage insuring agreement would such a loss be covered?

Choose correct answer/s
A
Money Orders and Counterfeit Currency
B
Forgery or Alteration
C
Outside the Premises
D
Computer and Funds Transfer Fraud
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Question 15
Multiple Choice

Jack, owner of Jack's Bar and Grill, was robbed while attempting to deposit receipts at his bank's night depository. Jack had purchased an ISO commercial crime coverage form. This loss would be covered under which insuring agreement?

Choose correct answer/s
A
Inside the Premises-Theft of Money and Securities
B
Outside the Premises
C
Money Orders and Counterfeit Currency
D
Inside the Premises-Robbery or Safe Burglary of Other Property
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Question 16
Multiple Choice

In the context of a surety agreement, the party who agrees to perform certain acts or fulfill certain obligations is called the

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A
fidelity.
B
obligee.
C
surety.
D
principal.
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Question 17
Multiple Choice

In the context of a surety agreement, the party who agrees to answer for the debt, default, or obligation of another party is called the

Choose correct answer/s
A
principal.
B
obligee.
C
surety.
D
fidelity.
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Question 18
Multiple Choice

Which of the following statements about surety bonds is (are) true?
I)The surety has a legal right to recover a loss payment it made on behalf of a defaulting principal.
II)The obligee is the party who benefits from the bond if the principal fails to perform.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 19
Multiple Choice

Tracy is a trust officer at a bank. One of her responsibilities is to manage funds that have been set aside for the benefit of minor children. What type of bond guarantees that Tracy will faithfully execute her required duties in this capacity?

Choose correct answer/s
A
fiduciary bond
B
public official bond
C
court bond
D
performance bond
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Question 20
Multiple Choice

Which of the following statements about various types of surety bonds is true?

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A
A judicial bond guarantees that a public official will faithfully perform his or her duties for the protection of the public.
B
A payment bond guarantees that the bonded person will appear in court.
C
A license and permit bond guarantees that the bonded party will comply with all the laws and regulations governing his or her activities.
D
A bid bond guarantees that the principal will complete a construction project on time.
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