Texas General Lines — Property and CasualtyCommercial LinesMedium
A client, a national bank, is concerned about the potential for loss due to fraudulent wire transfers initiated by an employee, or the theft of cash from their vaults by an insider. Which type of Crime Insurance coverage is specifically designed to protect against these types of losses involving employee dishonesty?
- AOutside the Premises Coverage
- BForgery or Alteration Coverage
- CEmployee Theft Coverage
- DRobbery and Safe Burglary Coverage
Show answer & explanationAnswer & explanation
Correct answer: C. Employee Theft Coverage
Employee Theft Coverage is specifically designed to protect businesses from losses caused by dishonest acts of employees, including theft of money, securities, or other property.
Why the other options are wrong
- A. Outside the Premises Coverage protects money and securities while being transported by a messenger or armored vehicle, or while at a banking premises, not employee dishonesty.
- B. Forgery or Alteration Coverage protects against loss due to forged checks, drafts, or other financial instruments, not general employee theft of funds or property.
- D. Robbery and Safe Burglary Coverage protects against loss of money and securities due to forcible entry or threat, typically by external parties, not internal employee theft.
Employee Theft Coverage
A type of Crime Insurance that protects businesses from financial losses resulting from dishonest acts committed by their employees, such as embezzlement, fraudulent transfers, or theft of money, securities, or other property.
- Covers losses caused by employee dishonesty.
- Applies to theft of money, securities, and other property.
- Often includes fraudulent wire transfers by employees.
- Can be written on a schedule or blanket basis.
Memory trick: Don't let an 'Employee' steal your 'Theft' protection.