Exam 27: Crime Insurance and Surety Bonds

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 obligee?

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 are ISO commercial crime coverage exclusions EXCEPT

The head teller of a bank embezzled $50,000 from the bank.Which insuring agreement in a financial institution bond is designed to cover such losses?

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,robbery 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?

All of the following statements about a surety are true EXCEPT

Smith is Manager of ABC Department Store.Jones,ABC's Security Director,visited Smith to ask some questions.During questioning,Smith admitted that he stole $10,000 in merchandise.He was disciplined,but not fired.The loss was not reported to the insurer.Six weeks later,Smith was observed on a surveillance camera stealing over $50,000 in jewelry from ABC.ABC immediately reported the loss to its crime insurer.Which ISO crime coverage condition may prevent ABC from collecting for this loss?

In the context of a surety agreement,the party who agrees to answer for the debt,default,or obligation of another party is called the

Tracy is a trust officer at a bank.One of her responsibilities is to manage funds that have been set aside for the benefit of minor children.What type of bond guarantees that Tracy will faithfully execute her required duties in this capacity?

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.

Which of the following statements is (are)true with respect to financial institution bonds? I.Fidelity Coverage covers losses resulting from the dishonest acts of employees. II.Financial institutions usually insure their crime exposures through financial institutions bonds.

Appliance World sells small appliances.The store purchased an ISO crime coverage policy.Last night,someone used a crowbar to pry open a locked door,leaving marks of forced entry.The thief took a number of appliances.The loss that Appliance World suffered would be called

An armed robber pulled a gun on a teller at the Fourth National Bank.He made off with over $10,000 in cash.Which insuring agreement in a financial institution bond is designed to cover such losses?

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?

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 principal?

A burglar took some blank checks during a break-in at XYZ Company.He was careful to make sure that the theft would be difficult to discover.Three months later,he wrote himself a check for $20,000 and signed the company treasurer's name on the check.After the check was cashed,the loss was discovered.Which commercial crime coverage form would cover this loss?

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