Christ Lutheran's Church Treasurer embezzled nearly $33,000 from the church. In order to conceal the dishonest actions, 24 separate checks were written over several months. The church eventually discovered the employee theft and requested full reimbursement from State Farm. The policy had an employee theft limit of $5,000, which is exactly the amount State Farm offered to pay because the embezzlement was considered a single occurrence. The church appealed and argued that each check written was a separate occurrence.

Click here to see how the court interpreted the word "occurrence."

Every coverage part has a definition section. This section is far more important than a simple dictionary because coverage is granted or taken away based upon the insurance company's definition of a word. One such example is the word "occurrence." The meaning changes based on the insuring agreement or the coverage form. It is not defined in every policy form. Although the definitions are not the same, it is a critical definition in the Commercial General Liability (CGL) Coverage Forms and the Commercial Crime Forms.

Click here to review the definitions of "occurrence" in the CGL and Crime Coverage Forms.

The Crime Section of the ACORD application contains a number of sections for Controls. The answer to each question should be "yes." Any "no" answer suggests a gap in an insured's internal controls that could lead to a substantial employee theft loss. This "no" is very important to acknowledge because according to reports from the U.S. Chamber of Commerce, 30% of business failures are directly related to employee theft. This means that by pointing out these gaps in the Controls you could be saving your client's business.

Acord Application 0141 2016-013

Employee theft discussions can be challenging because employers want to trust their employees. Your client doesn't want to believe that any of the individuals he or she works with every day, or that they personally hired, would steal from the business. While an employer might consider the possibility of certain employees stealing, most do not want to recognize that the employees who can steal the most are likely to be the most trusted. An employee theft e-marketing article posted on your website or sent in your newsletter might help start the discussion.

Click here to review the two e-marketing articles.