CR 04 15–IDENTITY FRAUD
EXPENSE
(February 2026)
Identity theft is a
major problem. The individual whose identity was stolen incurs considerable
expenses, even when there is no loss of money or property. This endorsement
covers those expenses.
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
added to the Insurance Services Office (ISO) Commercial Crime Coverage Form or
Policy.
The endorsement
schedule includes a space to specify the name(s) of any individual(s) who are
not covered.
This is an endorsement
to the ISO Commercial Crime Coverage Form and Policy and is subject to their
conditions, definitions, and exclusions. The only changes are those within this
endorsement.
This endorsement covers
expenses related to identity theft. It does not include compensation for lost
or damaged money or property.
The following is added
to Insuring Agreements A:
Identity Fraud Expense
The insurance company will pay the
insured, or any other insured person, for expenses incurred directly from
identity fraud.
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Example: Maggie, president of Great Images, Inc., is
startled when a warrant officer walks into her office demanding payment for
unpaid bills. She promptly contacts her attorney and discovers her identity
has been stolen. Maggie spends considerable time contacting creditors to
resolve issues caused by the identity theft. When vendors attempt to collect
payments for items she did not order, her attorney intervenes. Maggie files a
claim, including all bills for the income lost while resolving her identity
theft issues. |
The Limit of Insurance
stated on the Declarations is the maximum amount the insurance company will pay
for a loss occurrence.
A loss must exceed the
deductible shown in the Declarations before any payment will be made, and then
only up to the Limit of Insurance.
The following exclusion is replaced by this
endorsement:
·
Legal Fees, Costs, and Expenses
Legal fees, costs, and
expenses incurred by the insured in connection with legal actions are excluded.
However, this exclusion
does not apply to coverage under this Insuring Agreement or Insuring Agreement A.
2.—Forgery or Alteration
The following exclusion is added by this
endorsement:
·
Expenses Due to Theft
The exclusion removes coverage for any
expenses related to theft, fraud, or other dishonest acts committed by
the named insured, insured persons, or individuals listed on the endorsement
schedule. This exclusion applies regardless of whether these individuals act
alone or in connection with others.
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Example: The insurance company investigated
Maggie’s claims and collaborated with local law enforcement to identify the
culprit behind her identity theft. They discovered that Sarah, Maggie’s
trusted administrative assistant, was the one who stole her identity. As a
result, the insurance claim was denied because Sarah is considered an insured
person. |
The following is added to the Duties in the Event of Loss condition:
The named insured must
send the insurance company all requests, receipts, bills, and supporting
records related to any claim covered by this Insuring Agreement. These records
are to be provided within 60 days of the insurance company's request.
NOTE: The named insured is responsible, not
the insured person. If the requested information is not submitted to the
insurance company within 60 days, coverage could be denied. It is crucial for
the named insured to work with the insured person to ensure the requested
information is provided to the insurance company.
This endorsement adds
the following definitions to the F. Definition Section of the policy or
form:
Expenses include all of
the following:
a. Advertising costs the
insured incurs to help rebuild its reputation. This includes public relations
expenses directly linked to restoring the insured’s reputation. However, only
expenses directly related to identity fraud are covered.
b. When identity fraud
takes place, it is necessary to notify financial institutions and credit
providers or agencies. Some associated costs, such as payments to professionals,
such as notaries, for verifying the insured's or the insured person's signature
on required documents, are covered.
c. All expenses for
certified mail used to send necessary documentation to law enforcement
agencies, financial institutions, and credit grantors are covered costs. These
expenses may be incurred by any insured person or the named insured.
d. Costs associated with
acquiring credit reports by the named insured or any insured individual.
e. This coverage provides
a maximum income replacement of up to $250 per day when income is lost due to
the need to complete various forms and communicate with law enforcement or
legal counsel. The income loss can affect either the named insured or the insured
person, but the maximum payout will be the lesser of the insurance limit or
$10,000.
NOTE: The coverage form does not state if the
limit is per person or per occurrence.
f.
Fees for reapplying for a loan if the initial application
is rejected due to incorrect credit information. These fees can be incurred by
either the named insured or an insured person.
g. Attorney fees that are
reasonable, provided the fees pertain to one or more of the following services:
·
Defense
of the named insured against claims from creditors, financial institutions, or
collection agencies.
·
To
dismiss a criminal or civil judgment incorrectly issued against the insured.
·
To
contest the accuracy of a credit reporting agency’s reporting on the named
insured.
h. Long distance charges
for telephone calls associated with identity fraud. They can be incurred by
either an insured person or the named insured.
i.
Many other reasonable expenses incurred by the named
insured or any insured person may be covered if the insurance company gives
written approval for those expenses incurred.
The named insured
business listed on the declarations or any insured person’s identification used
without permission, with the intent to commit an unlawful act. The unlawful act
either violates federal law or qualifies as a felony under state or local law.
This includes an
employee, ERISA plan official, director, member, trustee, partner,
member, or manager of any insured individual. It also covers the spouse, any
child under 18, or any relative living in the household of an insured person,
as defined in the first sentence.
The only exception to
this extensive list is any individual explicitly named on the endorsement
schedule.
NOTE: The Insured Person
definition requires careful analysis. If the named insured is a sole
proprietorship, the named insured’s spouse, children, and relatives would not
be considered insured persons because the sole proprietor is the named insured
but not an insured person.
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Example: Justin Smith DBA Garden Landscaping
Plus operates as a sole proprietorship with three employees. ·
Justin
is the named insured but is not considered an insured person. ·
Justin’s
employees are all single: one lives with his parents, another lives alone,
and the third lives with his girlfriend. ·
All
employees are insured persons, as are the parents of the employee living with
them; however, the employee's girlfriend is not an insured person. ·
Justin’s
wife is not an insured person unless she becomes an employee. His three
children under 18 are not insured persons unless they or their mother are
employees. |