1. Forms
2. CR
3. CR-10-53

What the Form Is

CR 10 53, sometimes referred to as Coverage Form O, is a commercial crime insurance form. Its primary purpose is to provide an additional layer of coverage for losses resulting from employee dishonesty. This form functions on a per-loss excess basis, meaning it applies after a primary employee dishonesty coverage (referred to in documentation as 'Coverage Form P') has been exhausted for a particular employee involved in a loss.

Classes of Business It Applies To

This endorsement is suitable for commercial or governmental entities that face a risk of significant employee dishonesty losses and wish to secure higher limits than those provided by their primary fidelity or crime coverage. Examples include:

• Large corporations with many employees, where the aggregate potential of collusive or large-scale individual theft is high.
• Public entities, such as school districts (as suggested by its mention in conjunction with Public Employee Dishonesty Form CR 00 17), municipalities, or other governmental organizations handling significant funds or assets.
• Financial institutions or businesses with significant cash handling or valuable asset management where employee theft could lead to substantial losses exceeding standard primary limits.

Special Considerations

The CR 10 53 is an excess coverage form, and its coverage is triggered only after the limits of an underlying primary employee dishonesty policy (specifically, the per-employee limit of 'Form P') are exhausted for an employee involved in a covered loss. A key characteristic of this form is its response on a 'per occurrence' or 'per loss' basis for the remaining amount of that loss once the primary per-employee limit is breached. This applies regardless of the number of employees involved in that single occurrence. This is particularly important in scenarios where a single fraudulent scheme involves multiple employees, or one employee causes a loss far exceeding the primary per-employee limit. It is crucial to ensure that the terms and conditions of CR 10 53 align seamlessly with the primary 'Form P' to prevent potential coverage gaps.

Key Information for Agents and Underwriters

For Agents:

• Identify clients with substantial employee dishonesty exposures where the primary policy's per-employee limit might be insufficient for a large single loss or a collusive loss.
• Clearly explain the excess nature of this coverage and how it interacts with the primary policy (Form P).
• Ensure the client understands that this form doesn't drop down to cover losses if the primary policy doesn't respond for other reasons than limit exhaustion per employee for a covered claim.

For Underwriters:

• Thoroughly assess the adequacy of the insured's primary employee dishonesty coverage (Form P), including its limits and terms.
• Evaluate the insured's internal controls, employee screening processes, and overall risk management practices concerning employee theft.
• Pricing considerations should include the limits offered by CR 10 53, the nature and scale of the insured's operations, loss history, and the attachment point (i.e., the limits of the underlying Form P).
• Understanding the specific provisions of the primary 'Form P' is critical to accurately underwrite and price the CR 10 53 excess coverage.