1. Forms
2. CR
3. CR-25-06

What the form is

The CR 25 06 endorsement, titled "Include Chairpersons and Members of Specified Committees as Employees," is designed to modify the definition of an "employee" in standard commercial crime insurance policies. Its primary function is to extend crime coverage, such as Employee Theft, to individuals who serve as chairpersons or members of committees specified in the endorsement's schedule. These individuals, who might often be volunteers or non-compensated members, are treated as employees under the policy but only while performing services for the insured organization in their capacity as a chairperson or member of the listed committee(s).

Classes of business it applies to

This endorsement is particularly useful for a variety of organizations that rely on committees for operational or governance functions, especially where those committee members might handle funds, securities, or other valuable property. Examples include:

• Non-profit organizations: Such as charities, foundations, or community groups that often have volunteer committees (e.g., finance committee, fundraising committee, event planning committee) handling donations or organizational assets.
• Associations: Trade associations, professional societies, or homeowners' associations where committee members may be involved in managing membership dues or event finances.
• Clubs: Social clubs, sports clubs, or recreational groups whose committees might manage funds collected from members or through activities.
• Religious Organizations: Churches, synagogues, mosques, or other religious institutions often have committees overseeing finances, building projects, or community outreach programs.
• Some For-Profit Entities: While less common, some smaller businesses or corporations might have advisory committees or special project committees with non-employees who could pose a fidelity risk.

A real-world example would be a local community sports league (a non-profit) where the volunteer treasurer, who is part of the finance committee, is responsible for handling registration fees. If this treasurer, not otherwise a traditional employee, were to embezzle funds, this endorsement would allow the league to claim the loss under their employee theft coverage, provided the finance committee was scheduled on the CR 25 06 endorsement.

Special considerations

• Specificity is Key: The endorsement requires that the specific committee(s) to be covered are explicitly named in the schedule section of the form. Failure to list a committee means its members are not considered employees under this endorsement.
• Scope of Duty: Coverage for these individuals as "employees" applies only when they are performing services directly related to their duties for the specified committee. Acts outside this scope may not be covered.
• Addressing a Coverage Gap: Standard crime policies typically define "employee" in a way that might exclude uncompensated volunteers or committee members who are not under the direct control and supervision typical of an employment relationship. This endorsement bridges that potential gap.
• Exclusions: This endorsement is generally intended for use with most commercial and government crime coverage forms and policies but is specifically noted as not for use with Kidnap/Ransom and Extortion forms like CR 00 40 and CR 00 41.

Key information for agents and underwriters

• For Agents: It is crucial for agents to discuss the organizational structure of their clients, particularly non-profits and associations, to identify the existence and roles of various committees. If committee members, especially those not on payroll, have access to or control over money, securities, or other property, the agent should recommend the CR 25 06 endorsement to ensure proper coverage. Agents must ensure all relevant committees are accurately listed in the schedule.
• For Underwriters: When this endorsement is requested, underwriters should assess the potential risk exposure introduced by including these committee members. This involves understanding the types of committees, the number of members, their responsibilities, the value of assets they handle, and the internal controls and oversight mechanisms the insured has in place for these committees. While the endorsement clarifies and broadens coverage, the underlying risk associated with the committee's activities needs to be evaluated. Clear scheduling of committees is essential for policy clarity and claim handling.