1. Forms
2. CR
3. CR-20-22

What the form is

The CR 20 22 endorsement, titled "INCLUDE DESIGNATED PERSON REQUIRED TO HAVE KNOWLEDGE OF LOSS (DISCOVERY FORM)", is designed for use with Commercial Crime insurance policies that are written on a "Discovery Form" basis. Standard crime policy language typically requires that the "Named Insured" (often referred to as "you" in the policy) must discover a loss for coverage to be triggered. This endorsement modifies that provision by expanding the definition of who within the insured organization can have knowledge of a loss to constitute discovery. It allows for specific individuals or positions, in addition to the Named Insured, to be the ones who discover the loss.

Classes of business it applies to

This endorsement is broadly applicable to any commercial entity that purchases Crime insurance on a Discovery basis. It is particularly useful for:

• Medium to Large Businesses: In larger organizations, the official "Named Insured" (e.g., the corporation itself or its top executives) may not be the first to learn of a crime. Key managers, officers, or internal auditors might be the first to uncover an employee theft or other fraudulent activity.
• Organizations with decentralized operations: Companies with multiple branches or departments can benefit, as a manager at a specific location might discover a loss before corporate headquarters is notified.
• Entities wanting clarity on loss discovery: Any insured that wants to ensure there is no ambiguity regarding when a loss is considered discovered if knowledge resides with specific key personnel other than the primary contact listed as the Named Insured.

Real-world example: A large retail chain uses the CR 20 22 endorsement. The Chief Financial Officer (CFO) is listed as a designated person. If the CFO discovers an embezzlement scheme perpetrated by an accounting manager, the loss is considered "discovered" for the purpose of the crime policy, even if the CEO or the Board of Directors (who might collectively be the "Named Insured") are not yet aware.

Special considerations

• Discovery Form Specific: This endorsement is explicitly for use with Discovery-based crime coverage forms (such as CR 00 20, CR 00 22, etc.). A different endorsement, CR 20 23, serves a similar purpose for Loss Sustained crime forms.
• Designated Persons: The endorsement typically allows for the scheduling of specific positions or names individuals who are authorized to discover a loss on behalf of the insured. The standard language may also list certain officer-level positions by default.
• Timeliness of Reporting: While this endorsement broadens who can discover a loss, it does not alter the policy requirements for timely reporting of the loss to the insurer once discovered.
• Not for all Crime Forms: It is noted to be used with most crime coverage forms except for CR 00 40 and CR 00 41.

Real-world example: A manufacturing company adds its Internal Audit Manager as a designated person via the CR 20 22 endorsement. During an audit, the Internal Audit Manager uncovers evidence of vendor fraud. Because this position is designated, the date the Internal Audit Manager gained this knowledge is the date of discovery for the crime policy, starting the clock for reporting the claim.

Key information for agents and underwriters

• Agents: Should discuss this endorsement with clients, particularly those with multiple management layers or specific personnel responsible for financial controls and oversight. It helps align the policy terms with the practical realities of how losses might be uncovered within the client's organization. Ensure the correct version (Discovery vs. Loss Sustained) is used.
• Underwriters: This endorsement clarifies the discovery trigger, which can be beneficial for claim handling. It doesn't typically represent a significant increase in the underlying risk of loss itself but rather acknowledges the operational structure of the insured. Underwriters should confirm that the designated persons or positions are appropriate for the insured's size and complexity. There is generally no specific premium charge for adding this endorsement, as it's a clarification of terms rather than a broadening of perils covered.
• Coverage Gaps Avoided: By clearly defining who can discover a loss, this endorsement can help avoid potential coverage disputes where an insurer might argue a loss was known by an employee but not by the formal "Named Insured" in a timely manner.