1. Forms
2. CR
3. CR-00-31

What the form is

The CR 00 31 Government Fidelity and Forgery Policy (Loss Sustained Form) is a specialized, standalone (monoline) crime insurance policy developed by ISO (Insurance Services Office, Inc.) for governmental entities. It provides coverage for two primary types of financial loss: those arising from employee theft (often referred to as fidelity coverage) and those resulting from forgery or alteration of the insured governmental entity's checks, drafts, promissory notes, or similar written promises, orders, or directions to pay a sum certain in money. Being a "loss sustained" form, it covers losses that are both sustained by the insured entity during the policy period and discovered during that same policy period or within a specified extended period (typically one year) after the policy's termination. This form is more limited in scope compared to broader government crime policies like the CR 00 27, as it specifically focuses on these fidelity and forgery exposures.

Classes of business it applies to

This policy is exclusively for governmental entities. This includes, but is not limited to:

• State governments and their agencies
• County governments and their departments
• City or municipal governments
• Townships and villages
• Special government districts (e.g., school districts, water districts, park districts)

Real-world example: A county treasurer's office could utilize the CR 00 31 to protect public funds against embezzlement by an employee or losses from an external party forging county checks.

Special considerations

• Loss Sustained Basis: This is a critical feature. For a claim to be covered, the actual loss must have occurred during the policy period, and the discovery of that loss must also occur either during the policy period or within the extended discovery period (usually one year after policy termination). This contrasts with "discovery" forms (like its counterpart, CR 00 30) which cover losses discovered during the policy period, regardless of when the loss actually occurred (subject to any retroactive date).
• Limited Scope: The CR 00 31 only provides coverage for Employee Theft and Forgery or Alteration. It does not automatically include other crime coverages such as Inside the Premises – Theft of Money and Securities, Outside the Premises, Computer Fraud, or Funds Transfer Fraud, which would be found in broader crime policies like the CR 00 25 or CR 00 27.
• ISO Program Revisions: The ISO Commercial Crime Program underwent significant revisions with the June 2022 editions. These included changes in terminology (e.g., "Employee Theft" often referred to as "Fidelity"), reorganization of insuring agreements, and potentially some changes in coverage. Users should be aware of the specific edition date of the form being used.
• ERISA Compliance: If the governmental entity has employee benefit plans subject to the Employee Retirement Income Security Act of 1974 (ERISA), care must be taken to ensure that any bonding requirements for plan officials are met. Under some newer editions of crime forms, coverage for ERISA plan official dishonesty might need to be specifically addressed or endorsed.
• Declarations Page: The CR DS 08, Government Employee Theft and Forgery Policy Declarations, is used with this form and will specify the limits of insurance, deductibles, and whether employee theft coverage is on a per-loss or per-employee basis.

Key information for agents and underwriters

• Risk Assessment: Underwriters should thoroughly evaluate the governmental entity's internal controls, including segregation of duties, audit procedures, oversight of employees handling funds, and pre-employment screening. The frequency and scope of independent audits are important considerations.
• Coverage Adequacy: Agents must assess whether the limited scope of the CR 00 31 is sufficient for the client's needs or if a broader crime coverage form is more appropriate. For example, if the entity has significant cash on hand or is exposed to computer-related fraud, the CR 00 31 alone would be inadequate.
• Selection of Limits and Deductibles: Limits should be commensurate with the entity's potential exposure, considering the amount of funds handled, the number of employees with access to those funds, and the potential for large-scale collusion. Deductibles should be set at a level the entity can comfortably retain.
• Understanding Form Editions: Agents and underwriters need to be familiar with the specific edition date of the CR 00 31 being used, as coverage terms and organization can vary. For instance, the 11 15 edition introduced an exclusion for virtual currency, though endorsements to buy back some coverage became available.
• Comparison to Discovery Forms: It's important to explain the difference between "loss sustained" (CR 00 31) and "discovery" (CR 00 30) forms to the insured, particularly regarding when coverage is triggered and the implications for prior acts or coverage gaps when switching between form types.