1. Forms
2. CR
3. CR-20-15

What the form is

The CR 20 15 Joint Loss Payable endorsement is an addition to a commercial crime insurance policy. Its primary function is to protect the financial interest of a third party (the loss payee) in property covered under the insured's crime policy. When a covered loss occurs to property specified in this endorsement, the insurance company is required to make the claim payment jointly to the named insured and the loss payee(s) listed in the endorsement's schedule. This ensures that all parties with a financial stake in the lost or damaged property are part of the settlement process.

Classes of business it applies to

This endorsement is relevant for a wide range of businesses and governmental entities that have commercial crime insurance and also have situations where a third party has a legitimate financial interest in assets covered against crime. Real-world examples include:

• Contractors or service providers handling client funds: A county government might require a contractor who handles public funds to have this endorsement, naming the county as a joint loss payee, to protect against employee dishonesty or other covered crime losses involving those funds.
• Businesses with secured loans: If a business has a loan where assets covered by a crime policy (e.g., money, securities, or other property susceptible to theft) are collateral, the lender might require a Joint Loss Payable endorsement naming them as a loss payee.
• Joint ventures or partnerships: Where multiple entities are involved and share an interest in assets covered by a crime policy.
• Public entities in collaborative agreements: Agencies involved in regional systems, like a public transit fare collection system, might use this endorsement to ensure that crime insurance proceeds are appropriately distributed if a loss occurs.

Special considerations

• Specificity is key: The endorsement requires a schedule that clearly lists the name and address of the loss payee(s) and a description of the specific property to which the joint loss payment provision applies. Ambiguity can lead to disputes at the time of a claim.
• Not for all crime forms: This endorsement is generally used with most ISO commercial crime coverage forms and policies, but it explicitly states it is not for use with CR 00 40 (Kidnap/Ransom And Extortion - Loss Sustained Form) and CR 00 41 (Kidnap/Ransom And Extortion - Discovery Form).
• Contractual Requirement: Often, the requirement for this endorsement stems from a contractual agreement between the insured and the loss payee.
• Interest Protection: Its main purpose is to ensure that the loss payee's interest is not overlooked or circumvented in the event of a covered loss. The loss payee receives the payment along with the insured.

Key information for agents and underwriters

• Accurate Scheduling: Agents must ensure the schedule in the endorsement is completed accurately with the full legal name and address of the loss payee and a precise description of the property.
• Underlying Coverage: Underwriters should understand the nature of the insured's operations and the relationship with the proposed loss payee to assess any potential increase in moral hazard, although the endorsement itself doesn't alter the scope of coverage or limits of the policy.
• Coordination with Other Endorsements: Determine if the loss payee also requires notification of policy cancellation. If so, endorsements like CR 20 16 (Provide Notice of Cancellation to Another Entity) or CR 20 17 (Provide Required Notice of Cancellation to Another Entity) may also be necessary.
• No Change in Coverage Scope: Remind insureds that this endorsement only dictates how loss payments are made for scheduled property; it does not broaden the covered perils, increase limits, or otherwise change the fundamental terms of the crime policy.
• Risk Assessment: While primarily a mechanism for directing payment, the request for this endorsement can sometimes highlight specific exposures or contractual obligations that warrant closer review during underwriting.