TAF is a second-hand appliance and furniture store. TAF purchased an annual commercial package policy that includes Insurance Services Office’s (ISO’s) Commercial Crime Coverage Form (Loss Sustained Form). TAF decided not to insure its employee theft exposure because management believed its staff was honest. TAF selected these insuring agreements, each with a $1,000 deductible: Inside the Premises—Theft of Money and Securities with a limit of $30,000, and Outside the Premises with a limit of $30,000. The policy effective date is March 1, 20X0.

On January 31, 20X1, TAF discovered that merchandise valued at $5,000 was missing from inventory. Dennis, a manager, admitted that he had colluded with TAF’s delivery contractor to deliver the missing appliances and furniture to his own home.

Given the facts presented in the case and assuming that no endorsements to TAF’s policy affect the coverage in the loss and all policy conditions were met, use the DICE method to determine whether the commercial crime form will cover the loss. The declarations confirm that coverage was in force.

Which one of the insuring agreements would apply to the loss of $5,000 of merchandise?
The policy conditions were met, but which one of the exclusions eliminates coverage for this loss?

Answer rating: 100% (QA)

Answer Q 1 The insuring agreement with a 1000 deductible inside premises Theft of Money ... View the full answer