1. Forms
2. CR
3. CR-15-04

What the form is

The CR 15 04 Special Limit Of Insurance For Specified Property endorsement is used with Commercial Crime insurance policies. Its primary function is to set a distinct and separate limit of liability for loss of or damage to particular types of property that are named in the endorsement or in the policy declarations. This 'special limit' supersedes the general policy limit for the specified items and is usually a lower amount, thereby restricting the insurer's maximum payout for those specific types of property.

Classes of business it applies to

This endorsement can be applied to virtually any class of business that carries Commercial Crime insurance and possesses certain types of property for which the insurer or the insured wishes to set a specific limit. This is common for items that are highly susceptible to theft or have a volatile value. Real-world examples include:

• Retail stores holding valuable merchandise like electronics, jewelry, or designer goods.
• Financial institutions wanting to set specific limits on certain types of negotiable instruments or precious metals.
• Manufacturing companies with high-value components or proprietary prototypes.
• Any business that wants to manage premium costs by accepting a lower limit on certain exposures. For instance, a business might have a general crime limit of $250,000 but use CR 15 04 to limit coverage for stolen manuscripts or rare collectibles to $25,000.

Special considerations

Key considerations when using the CR 15 04 endorsement include:

• Clear Identification: The 'specified property' subject to the special limit must be described with utmost clarity and precision in the endorsement or policy declarations to avoid ambiguity during a claim.
• Adequacy of Limit: The insured must carefully assess whether the special limit provides sufficient coverage for the potential maximum loss of the specified property. A very low limit could lead to significant uninsured losses.
• Impact on Overall Coverage: It's important to understand that this endorsement carves out specific items for a different limit; other property not specified remains subject to the main policy limits and conditions.
• Rating Impact: The application of this endorsement can affect the premium. The snippet found indicates "RATES: special rate per $1,000 coverage. Example: with no guards, the rate is $14 per $1,000." This suggests that the premium associated with the specified property might be individually rated or that a credit might apply for accepting a lower limit.

Key information for agents and underwriters

For Agents:

• Proactively discuss with clients if they possess specific high-value or high-risk property that might be suitable for a special limit, either to manage premium or due to underwriter requirements.
• Ensure clients fully understand the implications of a lower limit on specified items and that the description of the property is accurate and complete.
• Explain how the special limit interacts with the overall policy limit and any deductibles.

For Underwriters:

• Utilize this endorsement to manage exposure to high-risk classes of property known to be frequent targets for crime (e.g., precious metals, furs, securities).
• Carefully review the description of the 'specified property' to ensure it aligns with the underwriting intent and is not overly broad or vague.
• The presence of such an endorsement, and the specific limit chosen, are critical factors in risk assessment and pricing. The underwriter must determine if the proposed special limit is commensurate with the exposure presented by the specified property.
• Consider if other risk management measures (e.g., security systems, safes) are in place for the specified property, as this may influence the acceptability of the risk and the special limit offered.