1. Forms
2. CR
3. CR-00-29

What the Form Is

The CR 00 29, titled Commercial Fidelity and Forgery Policy (Loss Sustained Form) in its 2022 edition (previously known as Employee Theft and Forgery Policy (Loss Sustained Form)), is a standalone insurance policy designed to protect businesses from financial losses due to specific criminal acts. It provides two primary insuring agreements:

• Employee Theft (or Fidelity): Covers direct loss of or damage to money, securities, and other property resulting from theft committed by an employee. The 2022 ISO revisions expanded this area, now often termed "Fidelity," to potentially include distinct components like employee theft, ERISA plan official dishonesty, and employee theft of clients' property.
• Forgery or Alteration: Covers losses resulting directly from the forgery or alteration of checks, drafts, promissory notes, or similar written promises, orders, or directions to pay a sum certain in money.

This policy operates on a "loss sustained" basis. This means that for a loss to be covered, it must typically be sustained during the policy period and discovered either during that same policy period or within a specified time (commonly one year) after the policy period ends. Coverage may also apply to losses that occurred under a prior policy if that policy's discovery period has expired and certain conditions are met.

Classes of Business It Applies To

This policy is suitable for a variety of commercial entities that desire focused protection against internal employee dishonesty and external forgery risks, but may not need or want the broader (and often more expensive) coverages found in comprehensive crime policies. Examples include:

• Small to medium-sized businesses (SMBs) across various sectors.
• Retail operations.
• Professional service firms (e.g., accounting, legal).
• Non-profit organizations.

For instance, a local retail store concerned about an employee stealing cash from the register or a manager forging company checks might find the CR 00 29 an appropriate solution.

Special Considerations

• Loss Sustained vs. Discovery Basis: Understanding the "loss sustained" trigger is critical. It differs significantly from a "discovery" basis policy (like the CR 00 28), which covers losses discovered during the policy period, regardless of when they occurred (subject to any retroactive date). Businesses switching between these types of forms need careful consultation to avoid potential coverage gaps.
• Limited Scope: The CR 00 29 is intentionally limited to employee theft and forgery. It does not cover other crime-related losses such as theft of money or property by third parties from the premises, robbery or safe burglary of other property by third parties, computer fraud, or fraudulent funds transfer, which would require separate coverage.
• ISO Program Revisions (e.g., 2022): The Insurance Services Office, Inc. (ISO) periodically revises its forms. The 2022 commercial crime program updates included changes in terminology (e.g., "Employee Theft" to "Fidelity"), structuring of insuring agreements, and definitions such as who qualifies as a "designated person" for discovering a loss. It is essential to refer to the specific edition date of the policy in use.
• ERISA Compliance: Businesses with employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) have specific fidelity bonding requirements. The employee theft/fidelity coverage in this policy can be used to meet these requirements, but the limits and terms must align with ERISA regulations. The 2022 revisions specifically address ERISA plan official dishonesty.

Key Information for Agents and Underwriters

• Needs Assessment: Agents should conduct a thorough crime exposure analysis for clients to determine if this limited policy is adequate or if broader coverage is warranted.
• Underwriting Focus: Underwriters will scrutinize the applicant's internal controls, including segregation of duties (especially for financial transactions), employee screening practices, audit procedures, and prior loss history. Strong internal controls are key to mitigating the risks covered by this policy.
• Prior Coverage Review: When an insured switches to this form, especially from a discovery form or if there was no prior crime coverage, underwriters must carefully evaluate potential gaps or overlaps in coverage due to the "loss sustained" trigger.
• Limits and Deductibles: These are specified on the policy's Declarations page (e.g., CR DS 05) for each insuring agreement. The employee theft limit is typically on a per "occurrence" or per "act" basis, not per employee.
• Key Exclusions: Agents and underwriters must be familiar with the policy's exclusions. For example, while general exclusions apply, the exclusion for "Acts Committed by Your Employees, Managers, Directors, Trustees, or Representatives" is specifically modified in this form to apply only to the Forgery or Alteration coverage, not Employee Theft. Inventory shortage exclusions, where proof of loss relies solely on inventory or profit/loss computations, are also a critical aspect of employee theft coverage.