CR 04 08–EMPLOYEE THEFT–NAME OR POSITION SCHEDULE

(February 2026)

INTRODUCTION

This analysis is of the 06 22 edition. Material changes are bolded, but format changes that do not affect coverage are not highlighted.

This endorsement can be used in either of two different ways:

· One approach is to replace other employee theft insuring agreements. This means coverage is limited to the employee or position specified on the endorsement schedule.

· The other approach is to use it as excess coverage over the employee theft insuring agreements for specific employees or positions. This means that blanket protection available to all employees is subject to one limit, while another limit applies to specific employees or positions.

Example: Do It Yourself, Inc. recognizes the need for employee theft coverage for all employees. It considers $10,000 to be the appropriate limit for most employees, but three individuals with significant responsibilities require a $1,000,000 limit. The company purchases a commercial crime coverage form with a $10,000 employee theft limit, and it adds the CR 04 08–Employee Theft–Name or Position Schedule endorsement, listing the three employees, each with a $1,000,000 limit.

ELIGIBILITY

This endorsement can be used with any Insurance Services Office (ISO) Commercial Crime Coverage or Policy, Commercial Fidelity and Forgery Policy, Government Crime Coverage or Policy, or Government Fidelity and Forgery Policy.

SCHEDULE

The schedule plays a vital role in this endorsement and must be completed accurately. The insured can request either one or both schedules. It is essential to recognize that coverage only applies to employees who can be specifically identified. Although this restriction is narrower than under the policy or coverage form, it is a critical aspect because coverage is limited to employees who are explicitly named or occupy scheduled positions.

ANALYSIS

This is an endorsement to the ISO Commercial Crime or Government Crime Coverage Forms and Policies, and to the Commercial or Government Fidelity and Forgery Policies, and is subject to their conditions, definitions, and exclusions. The only changes are those within the endorsement.

Name Schedule Coverage

The employee or employees to be covered must be named, with a limit and deductible specified for each. Coverage is tied to the person’s exact name and must be accurate, as a claim could be denied if the wrong name is entered.

Example: Rebecca Williams was the manager of Pioneer Motors' finance department. Pioneer bought Crime Coverage with a $50,000 employee theft limit and specifically requested a $1,000,000 limit for Rebecca. The CR 04 08 was therefore attached to the Crime Coverage, listing only Rebecca, with a $1,000,000 limit.

Susan Montgomery was promoted to manager of the finance department after Rebecca retired. Eleven months later, Susan left town, and Pioneer discovered that she had embezzled over $500,000 during her short tenure.

Pioneer presented the claim to the insurance company, but it paid only the $50,000 limit for employee theft covered under the Crime Coverage because the CR 04 08 schedule had not been updated upon Rebecca’s retirement to add Susan.

Position Schedule Coverage

When selecting Position Schedule Coverage, ensure all relevant positions and locations are listed and described. Include the number of employees in each position, the insurance limit for each employee, and the deductible amount. Coverage may be denied if a loss occurs and an employee is in a position or location not described on the schedule.

Example: Hellenic Products decided to insure all purchasing managers with a $100,000 coverage limit while maintaining a $10,000 Employee Theft limit for all other employees. A change in overtime rules prompted Hellenic to review and rename several job titles, merging multiple responsibilities.

Most purchasing managers were reclassified as inventory control representatives. One of these representatives embezzled nearly $50,000 in inventory by diverting it to her home. However, the only applicable coverage for this loss was $10,000 because the inventory control representative position was not listed on the schedule.

While this endorsement has some drawbacks, it also offers two major advantages.

The limit applies per employee and per occurrence, not just per occurrence. This means the available limits are notably higher when multiple employees are involved.

Examples:

Scenario 1: Ten employees are involved in a theft ring, each stealing $100,000 worth of merchandise, resulting in a total loss of $1,000,000. The insured was covered only under the Crime Coverage Form’s Employee Theft provision, with a $100,000 limit. The insurance company only pays $100,000 for the loss.

Scenario 2: Using the same scenario as above, the named insured purchased endorsement CR 04 08–Employee Theft – Name or Position Schedule. The ten employees involved in the theft ring are named, and each has a $100,000 limit. In this case, the insurance company pays the full $1,000,000 loss.

The named insured can choose a lower insurance limit for most employees through the A.1.a Fidelity—Employee Theft Insuring Agreement. Then they can purchase this endorsement as an excess policy with higher limits, applicable only to individuals or positions with access to substantial amounts of money and/or property.

Example: Riddlers Electronics purchases Employee Theft Coverage with a $100,000 limit on its 100 employees. The premium is very high because of the type of merchandise involved.

The owners analyze their exposure and decide to purchase the CR 04 08 endorsement with a $1,000,000 limit on 10 positions and reduce the Employee Theft Coverage limit to $25,000 for all other employees. The premium change is negligible, but coverage is significantly improved for the most important positions.

INSURING AGREEMENT

Insuring Agreement A.1.a.–Employee Theft remains in effect, but an additional Insuring Agreement is added, called Employee Theft – Name or Position Schedule. It covers loss or damage to money, securities, and other property caused directly by employee theft, whether the employee acts alone or with others. For this agreement, theft also includes forgery.

LIMIT OF INSURANCE

The following replaces B. Limit of Insurance in the Coverage Form or Policy.

NOTE: Titles added by editors for clarification.

Most Paid Per Occurrence

The maximum amount paid for all losses directly caused by an occurrence is limited to the insurance limit specified in the endorsement schedule.

Maximum Aggregate Limit Per Employee

The maximum aggregate payment is the highest insurance limit available for a specific employee, regardless of how many years of coverage were in place. It is important to understand that this aggregate limit applies regardless of any gaps in coverage or changes in the insurance amount for that employee.

Example: Maria was listed on Creative Solutions’ CR 04 08 with limits as follows:

· An initial limit of $500,000 from 12/01/13 to 12/01/14

· The limit was increased to $600,000 from 12/01/11 to 12/01/19

· The limit was decreased to $300,000 from 12/01/2021 to 12/01/2023.

A hedge fund decides to buy Creative Solutions. Its auditor uncovers Maria’s clever embezzlement, which began in 2013. She had stolen over $3,000,000, but the maximum reimbursement available is $600,000, which is the highest limit in effect during the period of her embezzlement.

Additional Limit Conditions Applicable to Position Schedule Basis

· If an employee holds multiple scheduled positions, only the highest insurance limit from any one position will apply.

· If a loss occurs and there are more employees in a covered position than listed on the endorsement schedule, the insurance limit is reduced proportionally.

Example: Ten employees were listed on the position schedule, but 12 were actually in those positions when a loss was discovered. The limit available to pay the loss is 10/12 of the limit of insurance or the amount of the loss, whichever is less.

DEDUCTIBLE

The loss amount must exceed the deductible indicated on the schedule before any payment will be made.

COMMERCIAL CRIME EXCLUSIONS

With the 0622 edition, exclusions are now labeled with headings and grouped and organized based on the Insuring Agreement.

The CR 04 08 endorsement replaces some exclusions in the coverage form or policy. The following exclusions only apply to:

· Commercial Crime Coverage Form

· Commercial Crime Policy

· Commercial Fidelity and Forgery Policy

Ø Exclusions applicable to Section D.1.—Exclusions Applicable to All Insuring Agreements:

· Acts Committed By Your Employees, ERISA Plan Officials, Managers, Directors, Trustees Or Representatives

This is theft or a fraudulent or dishonest act, whether the individual is acting alone or in collusion with others, or while performing services for the insured.

However, the exclusion does not apply if a loss is covered under one or more of the following Insuring Agreements:

· A.1.a. Employee Theft

· A.1.b. ERISA Plan Official Dishonesty

· A.1.c. Employee Theft of Clients’ Property

· This Insuring Agreement

· Kidnap, Ransom, Extortion And Other Unlawful Demands

o Loss from surrendering ransom due to unlawful demand, including but not limited to demands arising from illegal requests, threats, or introduction of the following actions.

§ Threat of kidnapping (alleged or actual) or physical harm.

NOTE: This does not include robbery covered under this endorsement.

§ Threat to damage property, contaminate, pollute, or otherwise degrade the insured’s goods or products.

§ Introduce a denial-of-service attack aimed at any computer system.

§ Introduce a virus or malicious code into any computer system with the intent to encrypt, damage, destroy, or corrupt data or programs.

§ Threat to access, download, distribute, disclose, or use the information of the insured, a natural person, or an entity, or to compromise the source code with any computer.

NOTE: This does not apply if coverage applies under Insuring Agreements A.1.a—Employee Theft, A.1.b.—ERISA Plan Official Dishonesty, or this Insuring Agreement.

o Loss resulting from any form of payment made in response to a service attack targeting a computer system. This covers denial-of-service attacks, ransomware, viruses, and malicious instructions. It refers to an act or event that has already occurred, not a threat.

NOTE: This does not apply if coverage applies under Insuring Agreements A.1.a—Employee Theft, A.1.b.—ERISA Plan Official Dishonesty, or this Insuring Agreement.

o Fees, costs, or other expenses associated with any of the above.

Ø Exclusions applying to Section D.2.—Additional Exclusions Applicable to Specific Insuring Agreements:

· ERISA Employee Benefit Plans

Loss of property belonging to any plan.

· Inventory Shortages

Proof of loss that depends on an inventory calculation or a profit and loss statement is excluded. These documents can be used to show the amount of the loss, but cannot be used to verify a loss actually occurred.

· Trading

Losses that result from trading are excluded. They are excluded if the trading is in the named insured’s name, if trading is genuine, or if it is a fictitious account.

With the 06 22 edition, the employee benefit plan has been removed as an exception to the exclusion.

NOTE: Trading activities include stock-trading losses, commodity-trading losses, and merchandise-trading losses (where batches of product are exchanged). CR 25 16–Add Trading Coverage may cover certain trading losses to a genuine, not a fictional, account.

· Warehouse Receipts

Warehouse receipts track and detail document storage and the transfer of products from the entity storing them to the entity receiving them. The transferring party and the recipient party are usually two separate entities.

A fraudulent transfer happens when property is given to someone not authorized to receive it. A forged instrument is often used by someone who seems to have a valid claim but does not. Coverage does not apply to these situations or to errors in issuing, signing, cancelling, or failing to cancel any warehouse receipt.

NOTE: CR 25 17–Add Warehouse Receipts Coverage can be attached to insure fraudulent transfer of warehouse receipts.

GOVERNMENT CRIME EXCLUSIONS

With the 0622 edition, this is a new section to the CR 04 08 endorsement.

The following amended exclusions apply only to:

· Government Crime Coverage Form

· Government Crime Policy

· Government Fidelity And Forgery Policy

Ø Exclusions applicable to Section D. Paragraph 1—Exclusions Applicable to All Insuring Agreements:

· Acts Committed By Your Employees, Officials Or Representatives

This is theft or a fraudulent or dishonest act, regardless of whether the employee or authorized representative is acting alone, in collusion with others, or while providing services for the insured.

However, the exclusion does not apply if a loss is covered under one or more of the following Insuring Agreements:

· A.1.a. Employee Theft—Per Loss Coverage

· A.1.b. Employee Theft—Per Employee Coverage

· This Insuring Agreement

· Kidnap, Ransom, Extortion And Other Unlawful Demands

o Loss from surrendering ransom due to unlawful demand, including but not limited to demands arising from illegal requests, threats, or introduction of the following actions.

§ Threat of kidnapping (alleged or actual) or physical harm.

NOTE: This does not include robbery covered under this endorsement.

§ Introduce a denial-of-service attack aimed at any computer system.

§ Introduce a virus or malicious code into any computer system with the intent to encrypt, damage, destroy, or corrupt data or programs.

§ Threat to access, download, distribute, disclose, or use the information of the insured, a natural person, or an entity, or to compromise the source code with any computer.

NOTE: This does not apply if coverage applies under Insuring Agreements A.1.a. Employee Theft—Per Loss Coverage, A.1.b. Employee Theft—Per Employee Coverage, or this Insuring Agreement.

o Loss resulting from any form of payment made in response to a service attack targeting a computer system. This covers denial of service, ransomware, viruses, or malicious instructions. It refers to an act or event that has already occurred, not a threat.

NOTE: This does not apply if coverage applies under Insuring Agreements A.1.a. Employee Theft—Per Loss Coverage, A.1.b. Employee Theft—Per Employee Coverage, or this Insuring Agreement.

o Fees, costs, or other expenses associated with any of the above.

Ø Exclusions applying to Section D Paragraph 2 —Additional Exclusions Applicable to Specific Insuring Agreements:

· Inventory Shortages

· Trading

Losses that result from trading are excluded. They are excluded if the trading is in the named insured’s name, if trading is genuine, or if it is a fictitious account.

CONDITIONS

With the 0622 edition, conditions are now labeled with headings and grouped and organized based on the Insuring Agreement.

Ø Conditions applicable to Section E.1.—Conditions Applicable to All Insuring Agreements:

· The following conditions are removed:

o Additional Premises or Employees

o Consolidation –Merger– Acquisition

· Duties in the Event of Loss

The following replaces f.2.c. paragraph 3:

Law enforcement must be notified if a loss involves a violation of law, unless the loss is covered under one or more of the following Insuring Agreements:

· A.1.a – Employee Theft

· A.1.b – ERISA Plan Official Dishonesty

· A.1.c – Employee Theft of Clients’ Property

· A.2 – Forgery or Alteration

· This Insuring Agreement

NOTE: With the 06 22 changes, Employee Benefit Plans has been removed as it no longer applies to this endorsement. Additionally, Termination As To Any Employee Conditions has been removed since it is now included in the coverage form and policy.

DEFINITIONS

CR 04 08 endorsement changes three definitions.

The following definitions apply to Commercial and Government Crime Forms and Policies, and Fidelity and Forgery Policies.

Occurrence

The definition of occurrence is replaced by the following:

· an act committed by an individual

· the total combination of separate acts

· a series of acts, related or unrelated

o The word “each” applies before "employee" instead of "an.” This modification makes it refer to an individual employee event rather than an event involving all employees.

Employee

The definition of employee is replaced by the following:

· When coverage is written on a Name Schedule basis, the individual(s) listed on the endorsement schedule is an employee.

· When coverage is written on a Position Schedule basis, the individual(s) employed to perform the duties of any position listed on the endorsement schedule is an employee.

Money

This is a new definition with the 06 22 edition of CR 04 08 endorsement, which replaces the definition of money with the following:

· If it is in use and has a value, then currency, coins, and banknotes are included.

· If it is held for sale to the public, then traveler’s checks and money orders are included.

· Deposits into the insured's account at any financial institution.