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 principal?

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

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

Which of the following statements is true regarding covered losses under the commercial crime coverage form?

A Pony Express Armored Car was transporting bank receipts from six branch banks to the main bank.A group of robbers staged a daring robbery.They forced the armored car off the road,shot two guards,and took over $120,000 in cash.Which insuring agreement in a financial institution bond would cover the stolen money in this case?

Two tellers of a Tenth National Bank branch colluded to embezzle $40,000 over a six-month period.State bank examiners detected the embezzlement during a routine bank examination.Tenth National purchased a financial institution bond.Under which of the following insuring agreements is this loss covered?

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 that wrote ABC's crime insurance.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?

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

All of the following statements about a surety are true EXCEPT

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 is true with regard to the kidnap/ransom extortion coverage available through ISO's Commercial Crime Coverage program?

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,safe burglary is defined as the

Which of the following statements is (are)true with respect to the differences between insurance and surety bonds? I.Insurance is a two-party contract;surety involves three parties. II.Insurers usually do not have the right to recover a loss payment from an insured,while a surety does have the legal right to recoup a loss payment.

Which of the following statements about the commercial crime insurance policy is true?

Bishop Appliance Store is covered by a commercial crime insurance policy.The policy provides coverage for "Employee Theft" on a blanket basis.When the store owner arrived to open the store for business one morning,he discovered that many small electrical appliances were missing.A surveillance tape showed a company employee had disabled the burglar alarm before leaving work,and had returned to the store later and had taken the appliances.Which of the following statements regarding this loss is true?

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?

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?

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

Jack,owner of Jack's Bar and Grill,was robbed while attempting to deposit receipts at his bank's night depository.Jack had purchased an ISO commercial crime coverage form.This loss would be covered under which insuring agreement?