Podcast
Questions and Answers
What percentage of crimes involving property remains unsolved?
What percentage of crimes involving property remains unsolved?
Vandalism and malicious acts rarely accompany theft attempts.
Vandalism and malicious acts rarely accompany theft attempts.
False
What are the primary types of property susceptible to crime losses?
What are the primary types of property susceptible to crime losses?
Real Property and Personal Property
____ criminals can gain access through keys, combinations, or codes.
____ criminals can gain access through keys, combinations, or codes.
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Which method is NOT a form of forced entry into protected enclosures?
Which method is NOT a form of forced entry into protected enclosures?
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Industrial espionage is considered a minor concern in the context of property crime.
Industrial espionage is considered a minor concern in the context of property crime.
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What percentage of bankruptcies is attributed to crime?
What percentage of bankruptcies is attributed to crime?
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What is a weakness of partial perimeter protection?
What is a weakness of partial perimeter protection?
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Complete perimeter protection secures only doors and windows.
Complete perimeter protection secures only doors and windows.
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Name one type of electronic protection device used on doors and windows.
Name one type of electronic protection device used on doors and windows.
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_______ locks provide superior protection compared to standard locks.
_______ locks provide superior protection compared to standard locks.
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Which of the following is a high-risk area that may require additional security?
Which of the following is a high-risk area that may require additional security?
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Area protection is not important during normal business hours.
Area protection is not important during normal business hours.
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What is a common issue associated with motion detectors?
What is a common issue associated with motion detectors?
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What types of insured property are covered under the policy?
What types of insured property are covered under the policy?
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Coverage for inside robbery includes damage to the premises caused by the robbery.
Coverage for inside robbery includes damage to the premises caused by the robbery.
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What is the maximum coverage for theft of insured property from a custodian's home?
What is the maximum coverage for theft of insured property from a custodian's home?
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Coverage for theft from window displays applies when the premises are ______ for business.
Coverage for theft from window displays applies when the premises are ______ for business.
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Which of the following is excluded from inside robbery coverage?
Which of the following is excluded from inside robbery coverage?
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The coverage extends to robbery attempts outside the premises while handling insured property.
The coverage extends to robbery attempts outside the premises while handling insured property.
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What is one of the exclusions listed for theft from the night depository safe?
What is one of the exclusions listed for theft from the night depository safe?
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Which of the following is included in the definition of 'Money' for the insurance coverage?
Which of the following is included in the definition of 'Money' for the insurance coverage?
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Insured Agreements II and III can only be purchased as a combined rider.
Insured Agreements II and III can only be purchased as a combined rider.
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What type of losses are excluded from coverage regarding vending machines?
What type of losses are excluded from coverage regarding vending machines?
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Coverage for losses due to _________ electronic transfers outside the premises is excluded.
Coverage for losses due to _________ electronic transfers outside the premises is excluded.
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Which peril is covered under the Money and Securities coverage?
Which peril is covered under the Money and Securities coverage?
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Coverage for damage to premises is applicable if the insured does not own the premises.
Coverage for damage to premises is applicable if the insured does not own the premises.
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What is the primary limitation regarding the coverage of 'Other Property'?
What is the primary limitation regarding the coverage of 'Other Property'?
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Which of the following instruments are covered under the forgery coverage?
Which of the following instruments are covered under the forgery coverage?
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Coverage applies to forgery even if the endorsement or alteration is legally considered forgery.
Coverage applies to forgery even if the endorsement or alteration is legally considered forgery.
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What is a fictitious payee in the context of forgery coverage?
What is a fictitious payee in the context of forgery coverage?
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The use of __________ paper for cheques can help deter tampering and forgery.
The use of __________ paper for cheques can help deter tampering and forgery.
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Which of the following is NOT a suggested risk management practice?
Which of the following is NOT a suggested risk management practice?
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All types of signatures are treated equally for coverage purposes.
All types of signatures are treated equally for coverage purposes.
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What should the coverage limits for forgery align with?
What should the coverage limits for forgery align with?
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Study Notes
Crime as a Property Loss Cause
- 2 million property crimes occur annually, with 40% involving commercial property.
- Over 75% of property crimes remain unsolved.
- Crime losses contribute to business failure, with 25% of bankruptcies attributed to crime.
Susceptible Property Types
- Real property: Commercial buildings and structures are vulnerable to vandalism, malicious acts, burglary, and arson which cause millions of dollars in losses annually.
- Personal property: Business stock and equipment are often targeted due to their value and ease of transport.
Target Items and Crime Sources
- Convertibility: Ease of converting property into cash increases the risk of theft.
- Value: Higher value property is more attractive to thieves.
- Portability: Items that are easy to transport are more vulnerable to crime.
- Damage to premises often exceeds the value of the stolen goods.
Forced Entry
- Vulnerable Entry Points: Doors, windows, roofs, walls, heating/air conditioning vents, and other openings in buildings are key areas for forced entry by criminals.
- Protected Enclosures: Safes, chests, and vaults are targeted for forced entry through mechanical, thermal, or explosive methods.
Unforced Entry
- Criminal access to keys, combinations, or codes allows for unforced entry, often involving insiders or trusted personnel.
Forced Opening
- Criminals may use violence or threats to force access to buildings and secure enclosures, including forcing employees to open safes or vaults or kidnapping owners or employees for access.
Vandalism & Malicious Acts
- Vandalism often accompanies theft attempts, and damage to buildings and contents may exceed the value of the stolen property.
- 450,000 cases of vandalism are reported annually, with 15% involving damage exceeding $1,000.
- 90% of perpetrators are never caught.
Espionage
- Industrial espionage is a growing concern.
Perimeter Protection
- Partial protection only protects openings like doors and windows, and may not detect forced entry through walls or ceilings.
- Complete protection secures all access points including doors, windows, walls, ceilings, and floors, using both physical and electronic security measures.
Physical Protection: Locks
- Deadbolt locks offer superior protection compared to standard locks, resisting jimmying and sawing.
Physical Protection: Bars & Screening
- Steel bars or wire mesh screening can reinforce basement and ground floor windows, as well as rear or side doors, for added security.
Electronic Protection: Magnetic Contact Switches & Glass Breakage Alarms
- Magnetic contact switches are attached to doors and windows to trigger alarms when openings are tampered with.
- Glass breakage alarms detect broken glass in windows, doors, and display cases using metallic foil or window tape.
Area Protection
- Restricting unauthorized access to valuable areas during normal business hours and after hours is essential.
- Physical and electronic protection methods contribute to area protection.
Physical Protection: Interior Barriers
- Metal doors secured with quality locks or bars are essential, as are other robust physical barriers within the building.
Electronic Protection: Trapping Devices
- Trapping devices, such as single beam photo-electronic devices, magnetic contact switches on interior doors, and pressure-sensitive mats, are used to detect unauthorized entry.
Electronic Protection: Motion & Heat Detectors
- Motion detectors function by detecting movement in a protected area, but can be susceptible to false alarms.
- Infrared detectors, a type of heat detector, provide advantages in detecting changes in temperature.
Area Protection During Business Hours
- Area protection is essential even during business hours.
- Brokers should ensure clarity on who qualifies as a custodian for insurance purposes.
Property Insured & Coverage Limits
- Types of insured property: Money, Securities, and Property.
- Optional coverages: Securities-only coverage or other specified property can be added.
- Coverage limits: Separate limits for inside and outside robbery and adjustable limits for high-risk periods are available.
Inside Robbery
- Coverage includes robbery of a custodian on the premises, including damage to premises caused by the robbery.
- Premises definition: Includes the interior of the building occupied by the insured, excluding public entrances, halls, or stairways, and display cases not directly opening into the interior.
- Kidnapping: Covers property taken when a custodian is forced to provide access to insured property under duress, applying when premises are closed.
- Theft from Window Display: Coverage for theft from window displays inside the premises when the premises are open for business and a window is broken.
Outside Robbery
- Robbery Away from Premises: Covers robbery of a custodian handling insured property outside the premises within Canada or the US.
- Theft from Custodian's Home: Covers theft of insured property from the custodian's home, with a maximum coverage of $500 or the limit of insurance, whichever is less.
Night Depository Safe
- Theft from Night Depository Safe: Covers theft of money from a bank or trust company's night depository safe, including loss due to forcible removal, unauthorized entry, or theft by dishonest employees.
Outside Robbery Exclusions
- No coverage for damage to glass, lettering, or ornamentation.
- No coverage if the custodian or accompanying guard is criminally implicated.
General Conditions
- Eighteen conditions govern the operation of the Commercial Crime Insurance Policy.
- Insuring Agreement II-Loss Inside the Premises: Insuring Agreements II and III can be purchased separately or as an IBC Money and Securities rider to the Commercial Crime Insurance Policy.
Money & Securities Coverage
- Definition: Includes currency, coins, bank notes, bullion, travelers' cheques, register cheques, money orders, and securities.
- Coverage: Perils covered include actual destruction, disappearance, or wrongful abstraction.
Other Property Coverage
- Definition: Includes property other than money and securities.
- Perils Covered: Safe burglary or robbery within the premises or attempts thereof, and locked containers affected by felonious entry or removal.
- Limitations: Coverage is more restricted than Broad Form coverages for stock and equipment.
Damage to the Premises
- Perils covered include damage caused by safe burglary, robbery, or burglarious entry into the premises.
- Coverage only applies if the insured owns the premises or is liable for the damage.
- The insurance amount should reflect the maximum potential loss from any single occurrence.
Exclusions
- No coverage for losses from coin-operated vending machines unless continuous money recording is in place.
- No coverage for fire damages to property other than money, securities, safes, or vaults.
- No coverage for losses due to unauthorized electronic transfers outside the premises.
Depositors' Forgery Coverage
- Covers losses due to forgery or alteration of cheques, drafts, promissory notes, bills of exchange, and similar written payment instruments.
- Types of forgery covered: Fictitious payee, impersonation, and payroll instruments.
Definition & Treatment of Forgery
- Forgery: Generally involves altering a writing without authority or falsely representing an unauthorized act as authentic.
- Policy Treatment: Coverage applies even if an endorsement or alteration is not legally considered forgery. Mechanically reproduced signatures are treated the same as handwritten signatures for coverage purposes.
Coverage Considerations & Risk Management
- Valuable addition: Important coverage for businesses with significant cheque and negotiable instrument activity.
- Coverage limits: Should align with limits for Employee Dishonesty Coverage (Insuring Agreement I).
- Risk Management: Use safety paper, secure storage and controlled issuance of blank cheques, and control access to and use of facsimile machines and plates to prevent unauthorized reproduction of signatures.
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Description
Explore the impact of crime on property loss, focusing on commercial and personal property vulnerabilities. This quiz discusses the common types of crimes affecting businesses and how these crimes can lead to significant financial repercussions. Test your knowledge on the various aspects of property crime and its influence on bankruptcies.
