1. Forms
2. CR
3. CR-20-23

What the form is

CR 20 23 is an endorsement to commercial crime insurance policies that are written on a "loss sustained" basis. Standard crime policies typically require that the "named insured" (the business entity itself) discover a loss for coverage to be triggered. This endorsement modifies that provision by expanding who can have knowledge of the loss. It allows for either specifically scheduled individuals or those holding certain listed positions within the company (e.g., an executive, manager, or employee designated in the schedule) to satisfy the "knowledge of loss" requirement. This means that if one of these designated persons becomes aware of a loss, it is considered discovered by the insured for the purpose of the policy.

Classes of business it applies to

This endorsement is applicable to any business that has a commercial crime policy written on a "loss sustained" form and wishes to clarify or broaden who within their organization can officially "discover" a loss. This is particularly relevant for:

• Larger organizations where the "named insured" (often the corporate entity) might not immediately be aware of a loss discovered by an employee in a specific role.
• Businesses with multiple locations or departments where loss discovery might occur at a level below the primary executives.
• Companies that want to ensure timely reporting and avoid potential coverage disputes related to when a loss was "discovered" by the appropriate party.

Real-world example: A large retail chain purchases a commercial crime policy. A store manager discovers an employee theft scheme. With endorsement CR 20 23, if the "store manager" position is designated (or if the specific manager is named), their knowledge of the theft can trigger the loss discovery provisions of the policy, even if corporate headquarters (the "named insured") is not immediately informed.

Special considerations

• Loss Sustained vs. Discovery Forms: It's crucial to note this endorsement is for "Loss Sustained" forms (e.g., CR 00 21, CR 00 23, etc.). A different endorsement, CR 20 22, serves a similar purpose for "Discovery" forms. Using the correct endorsement for the underlying policy type is essential.
• Designation of Persons/Positions: The endorsement requires specifying the designated persons or positions. Care must be taken to accurately list these to ensure the intended individuals are covered. If positions are listed, changes in personnel holding those positions are automatically accommodated. If individuals are named, the schedule may need updating if those individuals leave the company.
• Clarity in Loss Reporting: This endorsement can help streamline the loss reporting process by clearly defining who needs to be aware of a loss for it to be considered "discovered."

Real-world example: A manufacturing company uses CR 20 23 and designates its "Internal Auditor" and "Plant Manager" as persons whose knowledge of a loss constitutes discovery. If the Plant Manager uncovers fraudulent expense reports, the clock for reporting the loss to the insurer starts from when the Plant Manager became aware, not necessarily when the CEO was informed.

Key information for agents and underwriters

• Risk Assessment: The use of this endorsement doesn't inherently increase the risk of loss itself, but it can impact when a loss is considered discovered, potentially affecting the timing of claims. Underwriters should understand the insured's internal reporting structure and who is being designated.
• Clarity of Intent: Agents should discuss with clients who within their organization should have the authority for their knowledge to constitute discovery of a loss. This helps ensure the policy responds as expected.
• Underlying Form Compatibility: Ensure this endorsement is attached to a compatible "Loss Sustained" crime coverage form (e.g., CR 00 21, CR 00 23, CR 00 25, CR 00 27, CR 00 29, CR 00 31). It should not be used with discovery forms like CR 00 20 or CR 00 22, or with forms CR 00 40 and CR 00 41.
• Premium Impact: Typically, this type of administrative endorsement has minimal to no direct premium impact, but it provides important clarification that can prevent coverage disputes.
• Potential for Broader Discovery: While helpful for the insured, underwriters should be aware that this endorsement could potentially lead to earlier discovery dates for losses compared to a policy without it, if a designated person becomes aware of a loss sooner than the top-level management or owners.