1. Forms
2. CR
3. CR-20-14

What the form is

The CR 20 14 Loss Payable endorsement is a standard provision used to modify various commercial crime insurance policies. Its primary function is to direct the insurer to make any payment for a covered loss to the entity named as the 'loss payee' in the endorsement's schedule, as their financial interest may appear. Unlike a joint loss payable endorsement (such as CR 20 15), the CR 20 14 typically makes the loss payable solely to the designated loss payee.

Classes of business it applies to

This endorsement is used across various businesses and scenarios where a third party has a financial interest in the insured property or potential proceeds from a crime policy. It can be attached to:

• Commercial Crime Coverage Forms
• Commercial Crime Policies
• Employee Theft and Forgery Policies
• Government Crime Coverage Forms
• Government Crime Policies

Real-world examples include:

• A building owner being named as a loss payee on a property management firm's employee theft coverage.
• A client company (e.g., Mount Holyoke College) requiring a contractor who handles their money or has access to valuable property or confidential data to name the client as a loss payee on the contractor's crime policy. This is often required when a contractor collects money on behalf of the client or has access to the client's computer network and data.

Special considerations

It's important to understand the following when using CR 20 14:

• Sole Payee: This endorsement generally directs payment solely to the loss payee, distinguishing it from joint loss payable clauses.
• Claim Initiation: Typically, only the named insured (e.g., the property management firm in the example above) can make a claim under the policy, not the loss payee directly.
• Scope of Protection: While it provides a degree of protection to the loss payee, it may not offer the same comprehensive rights as a mortgagee clause found in property insurance policies.
• Modification: This endorsement modifies the standard provisions of the underlying crime coverage form or policy.
• Use Limitation: It is generally used with all ISO crime forms except for CR 00 40 and CR 00 41.

Key information for agents and underwriters

Agents and underwriters should consider the following:

• Identify Interest: Clearly identify the loss payee and the nature of their financial interest to ensure the endorsement is appropriate.
• Distinction from CR 20 15: Understand and explain the difference between CR 20 14 (Loss Payable) and CR 20 15 (Joint Loss Payable) to the insured and the loss payee.
• Underlying Coverage: The existence of this endorsement does not alter the terms, conditions, or exclusions of the underlying crime policy itself, other than directing the payment of loss. The loss must first be a covered loss under the policy.
• Risk Assessment: The addition of a loss payee might not significantly alter the underwriting risk of the policy itself, but it does create a contractual obligation for claim payment direction.
• Documentation: Ensure the name and address of the loss payee are accurately scheduled on the endorsement.