1. Forms
2. CR
3. CR-00-08

What the Form Is

The CR 00 08, titled Extortion Coverage Form G, was a commercial crime insurance coverage form developed by the Insurance Services Office (ISO). Its primary purpose was to protect businesses against financial losses resulting from extortion. Specifically, it covered the loss of money, securities, and other property that an insured was forced to surrender because of a threat of bodily harm to the insured, an employee, a relative of either, or an invitee who was, or was alleged to be, held captive. This form addressed direct extortion demands involving threats to people, as opposed to other forms of extortion like property damage threats (which might be covered elsewhere or not at all under this specific form). It is important to note that this form is considered obsolete and has been superseded by newer endorsements and policies.

Classes of Business It Applies To

This coverage was relevant for a wide range of commercial entities, particularly those with heightened exposure to extortion risks. Examples include:

• Businesses whose employees handle significant amounts of cash or valuable property.
• Companies with executives or employees who travel frequently, especially to regions known for higher kidnap and extortion risks.
• Financial institutions.
• Retail operations.
• Any organization whose personnel or their family members could be targeted by criminals seeking to extort assets.

For instance, a company whose CEO is threatened with harm unless a ransom is paid could have sought coverage under this form for the surrendered funds.

Special Considerations

Key considerations regarding CR 00 08 include:

• Obsolescence: This form has been replaced by the ISO endorsement CR 04 03 (Extortion—Commercial Entities). Businesses seeking extortion coverage today should ensure they have the current, appropriate forms or a specialized Kidnap and Ransom (K&R) policy, which may offer broader coverage.
• Scope of Threat: The coverage under CR 00 08 was typically triggered by threats of bodily harm to individuals.
• Covered Property: The form specified coverage for "money," "securities," and "other property," the definitions of which would be critical in a claim scenario.
• Reporting Requirements: Like most crime policies, prompt notification to the insurer and law enforcement (where appropriate) would have been a condition of coverage.

A real-world example where this form might have applied (if still current) would be a business owner forced to pay a sum of money to abductors who have taken a family member and threatened their safety.

Key Information for Agents and Underwriters

For insurance professionals, understanding CR 00 08, even in its obsolete state, provides context for current extortion coverages:

• Advise on Current Coverage: Agents must ensure clients understand that CR 00 08 is no longer the standard and guide them towards CR 04 03 or comprehensive K&R policies. These newer options may also address evolving risks like cyber extortion, which CR 00 08 was not designed for.
• Risk Assessment: Underwriters evaluating extortion risks (even for current forms) would consider factors such as the insured's industry, geographic areas of operation, public profile of key personnel, travel patterns, existing security measures, and the nature/value of assets that could be targeted.
• Coverage Gaps: Relying on older, unendorsed crime policies could leave significant gaps. The replacement of CR 00 08 with an endorsement (CR 04 03) signifies a shift towards integrating this coverage within a broader commercial crime policy structure.
• Policy Language: Careful review of definitions (e.g., "extortion," "covered person," "occurrence") and exclusions in current forms is crucial. The trigger for coverage (e.g., actual capture vs. threat of capture) and the types of threats covered are key differentiating points.