1. Forms
2. CR
3. CR-20-17

What the Form Is

The CR 20 17, titled "Provide Required Notice of Cancellation to Another Entity," is an endorsement to a commercial crime insurance policy. Its core purpose is to mandate that the insurance company gives advance written notice to a specifically named third party if the policy is to be cancelled. This notice must be provided for a certain number of days, as specified in the endorsement's schedule, before the cancellation takes effect for that third party. Crucially, if the insurer does not send this required notice to the designated entity, the coverage under the policy will continue to apply to that entity as if the cancellation had not occurred with respect to their interest.

Classes of Business It Applies To

This endorsement is broadly applicable across various industries and business types that hold commercial crime insurance policies. It is particularly relevant in situations where a third party has a vested interest in the continuation of the insured's crime coverage. Examples include:

• Government Contracts: Contractors working with government agencies (municipal, county, or state) that handle public funds or assets may be required to add this endorsement to notify the government entity of any potential lapse in coverage. For instance, a social services provider distributing county funds might need this endorsement naming the county.
• Lender Requirements: Businesses that have loans or lines of credit where crime insurance is a condition of the financing may need to notify their lender.
• Client Agreements: Companies that manage or have custody of client property or funds (e.g., financial services, property managers) where clients contractually require notification of insurance cancellation.
• Joint Ventures: In a joint venture, one partner might require notification if the managing partner's crime policy (which might cover the venture) is cancelled.

Special Considerations

• Mandatory Notice: Unlike similar endorsements (such as CR 20 16, which might only provide for notice as a courtesy), CR 20 17 makes the notice required. Failure by the insurer to notify the scheduled entity means the coverage continues for that entity.
• Scheduled Entity and Notice Period: The specific name and address of the entity to receive the notice, along with the number of days for the advance notice, must be clearly stated in the endorsement schedule.
• Policy Applicability: This endorsement can be attached to most commercial crime coverage forms. However, it is explicitly stated that it is not for use with forms CR 00 40 (Employee Theft And Forgery Policy - Financial Institutions) and CR 00 41 (Premises And Transit Policy - Financial Institutions).
• Contractual Obligation: The need for this endorsement often arises from contractual agreements between the insured and the third party.

Key Information for Agents and Underwriters

• Risk Assessment: The primary consideration for underwriters is the administrative diligence required by the insurer to ensure the named entity is properly notified according to the terms of the endorsement. Failure to do so can lead to unintended continuation of coverage for the third party.
• Underwriting Guidelines: Verify the legitimacy of the third party's interest. Ensure the notice period requested is reasonable and aligns with any underlying contractual requirements and regulatory obligations. The full and correct legal name and address of the entity to be notified are critical.
• Pricing: While there might not be a significant direct premium impact for adding this endorsement, the potential for continued coverage if notice is improperly handled represents a contingent liability.
• Documentation: Agents should ensure that the client understands the purpose of the endorsement and that the information for the entity to be notified is accurate. Maintaining records of such notices is crucial for the insurer.
• Coordination: This endorsement often works in conjunction with other endorsements, such as CR 20 15 (Joint Loss Payable Endorsement), when a third party has both a right to notice and a right to share in any loss payment.