1. Forms
2. CR
3. CR-25-02

What the form is

The CR 25 02 "Include Designated Agents As Employees" endorsement is designed to modify a commercial crime insurance policy. Its primary function is to expand the definition of an "employee" to encompass specifically designated agents who are not traditionally considered employees under the policy's standard terms. This endorsement allows businesses to secure coverage for losses arising from theft committed by these named agents. The agent, whether an individual, partnership, or corporation, must be appointed in writing by the insured and listed in the endorsement's schedule.

Classes of business it applies to

This endorsement is valuable for any business that relies on external agents who have access to the company's money, securities, or other property, thereby creating an exposure to theft. Real-world examples include:

• Companies utilizing manufacturer's representatives who might handle orders and payments.
• Property owners (e.g., apartment buildings) who use real estate management firms to collect rent, manage finances, or oversee property.
• Businesses that engage attorneys or auditors who are given access to sensitive financial information or assets.
• Organizations that work with other types of independent contractors such as brokers, factors, commission merchants, or consignees who act on their behalf.

Special considerations

Several important points must be considered when using the CR 25 02 endorsement:

• Written Appointment and Scheduling: The agent must be formally appointed in writing by the insured, and their name and capacity must be specifically listed in the endorsement's schedule.
• Coverage Scope: Coverage provided for these designated agents is typically limited to "theft," even if the underlying crime policy offers broader insuring agreements (like faithful performance) for other employees.
• Single Employee Concept: For the purpose of the insurance, the designated agent, along with all its partners, officers, and employees, is collectively treated as a single "employee." This is crucial for how the limit of insurance and any applicable deductible will apply to a loss caused by the agent.
• Limit of Insurance: The limit of insurance specified for the designated agent(s) in the schedule is part of the main Employee Theft insuring agreement limit; it is not an additional, separate limit.
• Underwriter Approval: The issuance of this endorsement is subject to underwriter review and approval. The underwriter will assess the risk associated with the designated agent.
• Necessity for Coverage: If this endorsement is not in place, any theft committed by an agent (who doesn't meet the standard definition of an employee) would likely not be covered, and the business would have to bear the loss itself.

Key information for agents and underwriters

Insurance professionals should be aware of the following when dealing with the CR 25 02:

• Risk Assessment: Thoroughly evaluate the insured's relationship with the designated agent. This includes understanding the agent's duties, the level of access they have to the insured's assets, the financial controls in place, and the agent's own internal controls and insurance.
• Underwriting Guidelines: Underwriters will need detailed information about the agent being added, including their business operations, financial stability, and loss history. The written agreement between the insured and the agent is a key document.
• Identifying Coverage Gaps: Agents should proactively discuss this exposure with clients who use third-party agents in capacities that could lead to theft. Standard crime policies often exclude such agents from the definition of "employee."
• Pricing: The premium for this endorsement will depend on the underwriter's assessment of the risk posed by the designated agent, the requested limit of insurance, and the agent's specific role and responsibilities.
• Documentation: Emphasize to the insured the importance of maintaining a clear, written agreement appointing the agent. This documentation is critical at the time of a claim.
• Limit and Deductible Application: Ensure the insured understands that the designated agent and all its personnel are considered one employee concerning limits and deductibles. This can significantly impact recovery if multiple individuals within the agent's organization are involved in a collusive theft.