1. Forms
2. CR
3. CR-DS-05

What the form is

The CR DS 05 Employee Theft and Forgery Policy Declarations is a standard Insurance Services Office (ISO) form that serves as the declarations page for the Employee Theft and Forgery Policy. It is not a coverage form itself but is a critical component that personalizes the policy by summarizing key information specific to the insured. This includes the named insured, policy number, policy period, the specific insuring agreements being provided (which are limited to Employee Theft and Forgery or Alteration in this policy type), the limits of insurance for each coverage, applicable deductible amounts, and a list of any endorsements attached to the policy that modify its terms. It essentially provides a snapshot of the coverage selections made by the insured.

Classes of business it applies to

The CR DS 05 is used for commercial entities that have opted for the more restricted Employee Theft and Forgery Policy rather than a broader commercial crime policy. This policy is designed for businesses whose primary crime exposures are related to dishonest acts committed by their own employees or losses due to forgery or alteration of financial instruments. Examples of businesses that might use this form include:

• Small to medium-sized retail stores
• Professional service firms (e.g., accounting, legal, consulting)
• Non-profit organizations
• Any business that handles cash or financial transactions but has limited exposure to other crime perils like robbery or safe burglary by third parties.

For instance, a local bakery concerned about an employee stealing cash from the register or forging checks might choose an Employee Theft and Forgery Policy and would receive a CR DS 05 declarations page detailing their specific coverage limits and deductibles for these risks.

Special considerations

• This declarations page must be used in conjunction with either the CR 00 28 Employee Theft and Forgery Policy (Discovery Form) or the CR 00 29 Employee Theft and Forgery Policy (Loss Sustained Form). The choice between the discovery or loss sustained basis is a fundamental aspect of the coverage and will be reflected in the policy documents.
• The information on the CR DS 05, particularly the limits of insurance and deductibles, should be carefully reviewed to ensure they align with the insured's risk assessment and financial capacity.
• The form includes a section to list any prior crime insurance policies issued by the current insurer to the named insured; upon acceptance of the policy to which CR DS 05 is attached, those prior policies are considered cancelled.
• All endorsements that amend the standard policy language of the Employee Theft and Forgery Policy will be itemized on the CR DS 05.

Key information for agents and underwriters

• Risk Assessment: Underwriters should scrutinize the applicant's internal controls, segregation of duties, and financial practices when issuing a policy that will use the CR DS 05. Businesses with weak controls or a history of employee dishonesty may require higher deductibles, lower limits, or specific underwriting actions.
• Coverage Scope: Agents must clearly explain to clients that the Employee Theft and Forgery Policy is limited in scope. If a client has significant exposures to external crime threats like premises theft, robbery, or computer fraud, a broader crime coverage form (e.g., Commercial Crime Policy with declarations CR DS 02) would be more appropriate. The CR DS 05 will only list limits for Employee Theft and Forgery or Alteration.
• Limit and Deductible Selection: Assisting the insured in selecting appropriate limits and deductibles is crucial. The limits should be sufficient to cover a worst-case scenario employee theft or forgery loss, considering the number of employees, access to funds, and the nature of assets.
• Policy Form Basis: Ensure the client understands whether their coverage is on a "Discovery" (CR 00 28) or "Loss Sustained" (CR 00 29) basis, as this impacts when a loss is covered. This will be indicated by the accompanying policy form.