Exam 27: Crime Insurance and Surety Bonds

Tenth National Bank extended a $2 million loan to ABC Development Company.Tenth National accepted a mortgage on a building as collateral for the loan.The mortgagee's signature on the loan,however,was a forgery.The resulting loss is covered by which financial institution bond coverage?

Metro City would like a pedestrian bridge constructed across Big Creek.The city will accept bids on the project until a specified date.Bidders must submit a bid bond that guarantees if the bid is accepted,the bidder will sign the construction contract and furnish a bond that guarantees the construction work will be completed according to contract specifications.This second bond the bidder must post is a

Which of the following statements is (are)true with regard to the ISO commercial crime coverage forms? I.The discovery version only covers losses which occur during the policy period. II.The loss-sustained version covers losses which occur during the policy period and the loss is discovered during the policy period or within one year after the policy expires.

Which of the following statements about surety bonds is (are)true? I.The surety has a legal right to recover a loss payment it made on behalf of a defaulting principal. II.The obligee is the party who benefits from the bond if the principal fails to perform.

Graham is a cashier at a convenience store.A customer pulled a gun on him,and said that he would shoot Graham unless he gave him all the money in the cash register.This crime,which is covered under the ISO commercial crime coverage form,is called

One commercial crime policy condition is "termination as to any employee." This condition terminates crime coverage

XYZ Insurance Company markets a wide range of coverages.One type of coverage provides monetary compensation if a bonded party fails to perform certain acts.This coverage is called

In the context of a surety agreement,the party who agrees to perform certain acts or fulfill certain obligations is called the

Al's Electric Service is an electric contracting company in Metro City.The owner of the company,Al Richards,posted a bond guaranteeing that all work performed by his company will comply with local building codes.This bond is an example of a

State X hired Build-Right Construction to build a bridge.State X required that construction be completed within 2 years after the contract was signed.Les Johnson is the president of Build-Right.State X required that Build-Right's promise to perform be guaranteed by a third party.Build-Right purchased a performance bond from Rock Solid Indemnity.The bond requires Rock Solid to be responsible if Build-Right does not have the project completed on time.In this scenario,which party is the surety?

Which of the following statements about various types of surety bonds is true?

State X hired Build-Right Construction to build a bridge.State X required that construction be completed within 2 years after the contract was signed.Les Johnson is the president of Build-Right.State X required that Build-Right's promise to perform be guaranteed by a third party.Build-Right purchased a performance bond from Rock Solid Indemnity.The bond requires Rock Solid to be responsible if Build-Right does not have the project completed on time.In this scenario,which party is the principal?

In the ISO Commercial Crime Coverage form,robbery is defined as the

In a surety arrangement,the party who benefits from the bond if the bonded party fails to perform is the

Insurer A began to provide crime insurance coverage for JKL Company three months ago.Insurer B provided coverage up until the time Insurer A's coverage became effective.Forty-five days after the effective date of Insurer A's coverage,a loss was discovered that occurred while Insurer B was providing coverage.The loss would have been covered under Insurer A's policy had it been in effect the previous period.Which policy provision in the current Insurer A policy would make Insurer A responsible for this loss?

In the ISO Commercial Crime Coverage form,theft is defined as the

Fifth National Bank decided to loan $200,000 to Fred Franklin.As collateral for the loan,Fred posted stock certificates.When Fred defaulted on the loan,Fifth National tried to sell the stock.They discovered the stock certificates were stolen from someone else.Which insuring agreement in a financial institution bond is designed to cover such losses?

A cashier at Food World Supermarket accepted a phony $100 bill.Which ISO commercial crime coverage is designed to cover such a loss?

All of the following statements about a surety are true EXCEPT