You can't insure a building after the fire has started |
Construction Contractors Employer Group purchased a policy from Federal Insurance with an effective date of March 23, 2013. In July 2012, prior to starting the application process, Construction had started an investigation because it had been notified of an unexpected lack of funds situation. The investigation was completed in May 2013, at which time the claim was presented.to the new carrier. Federal denied the loss because Construction had discovered the loss prior to the policy application. Construction argued that as an open investigation, they didn't have enough information to know whether or not a loss had occurred.
Click here to see how the courts decided when asked to consider when the loss had actually been discovered.
|
| |
Crime coverage is different |
The crime coverage forms are different because employee dishonesty is a crime that typically takes place over a number of years. Once the loss is discovered, often the employee is not aware of the total amount that he or she has embezzled but it can add up. Coverage limits do not stack. The coverage form in effect at the time of the loss will respond but the limits available to pay for the loss will vary based on whether coverage had remained in force throughout the loss period and whether the coverage had remained with a single carrier throughout that same period.
Click here to read the PF&M explanation of how the ISO employee dishonesty coverage form responds to a multi-year employee dishonesty loss.
|
| |
Using a Court Case as a Selling Tool |
Many clients are more concerned about preventing theft from the outsiders than from their own employees. However, the sad fact is that employees are able to cause much more financial losses than anyone could on the outside. Employee dishonesty limits are often very low because the client just doesn't understand the exposure. A court case or two from PF&M, written in a concise and easy to follow format, may provide the incentive.
Click here to review two cases you might want to use.
|
| |
Starting a conversation about Employee Dishonesty |
|
Employee dishonesty can be a difficult topic to discuss but such a discussion could prevent your client from a potential bankruptcy. It might even encourage them to add additional financial oversight so that the coverage is never needed at all.
Click here for a letter you could send to your client concerning this important coverage.
|
| |
|
|
|
