Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Casualty InsuranceEasy
A client operates a small, family-owned restaurant in Florida. They are concerned about potential losses due to employee theft of cash and inventory. Which type of Crime Insurance coverage would best address the direct financial loss resulting from an employee secretly stealing money from the cash register over several months?
- AInside the Premises - Robbery or Safe Burglary of Other Property
- BOutside the Premises
- CEmployee Theft (also known as Fidelity Coverage)
- DForgery or Alteration
Show answer & explanationAnswer & explanation
Correct answer: C. Employee Theft (also known as Fidelity Coverage)
Employee Theft coverage, also known as Fidelity Coverage, is specifically designed to protect businesses from direct financial losses due to dishonest acts committed by employees, such as theft of money, securities, or other property.
Why the other options are wrong
- A. This covers theft by non-employees using force, not secret employee theft.
- B. Outside the Premises covers theft of money/securities while being transported, not internal employee theft.
- D. Forgery or Alteration covers losses from forged checks or altered documents, not direct cash theft.
Crime Insurance - Employee Theft
Employee Theft coverage protects businesses against direct financial loss resulting from theft of money, securities, or other property by an employee.
- Covers dishonest acts by employees.
- Often includes discovery or loss sustained forms.
- Can be written as a separate policy or part of a package.
Memory trick: Crime insurance handles 'E.F.I.O.C.' for 'Employee, Forgery, Inside, Outside, Computer'.