1. Forms
2. CR
3. CR-00-24

What the form is

The CR 00 24 Government Crime Coverage Form (Discovery Form) is an insurance policy form developed by the Insurance Services Office (ISO) specifically for governmental entities. Its primary characteristic is that it provides coverage on a "discovery" basis. This means that a loss is covered if it is discovered during the policy period, or an extended discovery period, regardless of when the wrongful act actually occurred (though coverage may be subject to a retroactive date specified in the policy). This form is designed to be incorporated into a larger insurance package, such as a Commercial Package Policy (CPP), rather than being issued as a standalone (monoline) crime policy. It consolidates several different crime insuring agreements into a single form, allowing governmental entities to select the specific coverages they need.

Classes of business it applies to

This form is exclusively for governmental entities. This includes a wide range of public bodies, such as:

• State governments and their agencies
• County governments and their departments
• City, town, or village municipalities
• Public school districts and educational institutions
• Special purpose districts (e.g., water, sanitation, park districts)
• Other public authorities and commissions

Real-world examples:

• A city discovers that a long-term employee in the finance department has been embezzling funds over several years.
• A county treasurer's office identifies a series of forged checks that have been cashed against its accounts.
• A public university's computer system is breached, leading to the fraudulent transfer of funds to an external account.
• A state agency finds that an official has accepted bribes in exchange for awarding contracts.

Special considerations

• Discovery Basis: The "discovery" trigger is a critical feature. Unlike "loss sustained" forms (e.g., CR 00 25), which generally cover losses that are both sustained and discovered during the policy period (or sustained during the policy and discovered within a set time after), the CR 00 24 responds to losses found during its term, offering potential coverage for acts that may have started before the policy began, subject to any stated retroactive date.
• Retroactive Date: Policies written on a discovery basis may include a retroactive date. If so, losses resulting from acts that occurred before this date are not covered, even if discovered during the policy period.
• Use in Package Policies: The CR 00 24 is a coverage form, not a policy. It is intended to be attached to a Commercial Package Policy or a similar package. For a standalone government crime policy on a discovery basis, the CR 00 26 Government Crime Policy (Discovery Form) would typically be used.
• Government-Specific Provisions: Crime forms tailored for governmental entities often contain definitions and provisions that address their unique nature. For example, the definition of "employee" may be broadened to include elected or appointed officials, and there might be specific options like employee theft coverage on a per-employee basis in addition to a per-occurrence basis.
• Transitioning Coverage: If an insured is switching from a "loss sustained" policy to this "discovery" form, it's important to manage the transition carefully to avoid coverage gaps. The form may contain provisions addressing how it interacts with prior insurance.

Key information for agents and underwriters

• Risk Assessment: Governmental entities have distinct crime exposures. These include risks like employee dishonesty involving public funds, forgery of public instruments, computer fraud targeting governmental systems, and theft of public money or property. Underwriters should thoroughly evaluate the entity's internal controls, audit procedures, segregation of duties, and oversight mechanisms.
• Coverage Customization: The CR 00 24 typically includes several insuring agreements, such as Employee Theft, Forgery or Alteration, Inside the Premises – Theft of Money and Securities, Inside the Premises – Robbery or Safe Burglary of Other Property, Outside the Premises, Computer Fraud, and Money Orders and Counterfeit Paper Currency. Agents must work with their governmental clients to identify the most significant exposures and select the appropriate coverages and limits. The active coverages and their limits will be specified in the policy Declarations.
• Setting Limits and Deductibles: Determining adequate insurance limits is crucial, particularly for exposures like employee theft, where losses can accumulate to substantial amounts over extended periods. Deductibles will apply to each occurrence, and their levels should be set in consideration of the entity's risk appetite and financial capacity.
• Understanding the Discovery Provision: Both agents and underwriters need a clear understanding of how the discovery provision operates, including any extended discovery period after policy termination and the implications of any retroactive date.
• Definition of Employee: Pay close attention to the policy's definition of "employee." For governmental entities, this definition is often broader than in commercial forms and may include elected officials, appointed officials, and sometimes volunteers when acting on behalf of the entity.
• ERISA Compliance: The form may provide coverage for dishonest acts related to employee benefit plans that are subject to the Employee Retirement Income Security Act of 1974 (ERISA).