1. Forms
2. CR
3. CR-01-01

What the Form Is

The CR 01 01, titled "North Carolina Changes – Legal Action Against Us," is an insurance policy endorsement specifically designed for use in North Carolina. Its primary function is to amend the standard "Legal Action Against Us" condition found in certain types of crime insurance policies. This condition outlines the specific circumstances, timeframe, and requirements under which an insured party can initiate a lawsuit against the insurance company. This endorsement ensures that the policy language conforms to North Carolina's legal environment or specific regulatory nuances concerning such lawsuits.

Classes of Business It Applies To

This endorsement is typically attached to policies for businesses and governmental entities in North Carolina that have procured specific crime-related insurance coverages. These include:

• Commercial Crime Coverage Forms: Used by various commercial enterprises to protect against crime-related losses such as employee theft, forgery, or computer fraud. For example, a retail chain operating in North Carolina would have this endorsement on its Commercial Crime policy.
• Government Crime Coverage Forms: Tailored for public entities (e.g., municipalities, state agencies in North Carolina) to cover similar crime risks, including employee dishonesty and theft of government property.
• Kidnap/Ransom and Extortion Coverage Forms: Provides coverage for losses arising from kidnapping, extortion threats, and ransom payments. A North Carolina-based company with executives who travel frequently might have this coverage and therefore this endorsement.

Special Considerations

• Mandatory Application: In North Carolina, this endorsement is generally required when issuing the specified ISO (Insurance Services Office, Inc.) crime coverage forms to ensure policy compliance and clarity regarding legal proceedings.
• Edition Dates: It's important to use the correct edition date of the CR 01 01, as the language and provisions can be updated. For instance, the "03 00" edition was specifically noted for adjusting language to align with a new crime insurance program. The "07 02" edition is another known version.
• Understanding the Base Policy: To fully grasp the impact of this endorsement, one must compare its wording to the original "Legal Action Against Us" condition in the base crime policy. The endorsement modifies, and does not entirely replace, the policy's terms unless specified.
• State-Specific Nature: This form's provisions are tailored for North Carolina and should not be used in other states unless specifically adopted or allowed.

Key Information for Agents and Underwriters

• Compliance: Agents and underwriters must ensure this endorsement is included in all applicable North Carolina crime policies to maintain regulatory compliance and avoid potential disputes over policy interpretation.
• Client Communication: Agents should explain to their North Carolina clients how this endorsement affects their rights and obligations when it comes to filing a lawsuit against the insurer under their crime policy.
• Risk Assessment: While the CR 01 01 primarily addresses legal procedure rather than the scope of covered perils, underwriters should be aware of its application as part of the overall policy construction for North Carolina risks.
• No Direct Premium Impact: Typically, state-specific amendatory endorsements like CR 01 01 do not have a separate premium charge, as they are designed to conform the policy to state requirements rather than altering the fundamental risk profile.
• Consistency: Use of this endorsement helps maintain consistency and predictability in how legal disputes under crime policies are handled in North Carolina.