Attachment_D-Crime_Policy.pdf

Property Coverage Document Page 47 of 73 Board Approved March 25, 2022, Eff. July 1, 2022

SECTION F - CRIME COVERAGE

Terms, conditions and definitions below may vary from the terms, conditions and definitions set forth in Sections A, B, C, D, E and G. To the extent terms and definitions between Sections A, B, C, D, E and G and this Section F, Crime Coverage, conflict, for purposes of an act, event, or series of acts or

ATTACHMENT D-CRIME POLICY

Page 48 of 73 Board Approved March 25, 2022, Eff. July 1, 2022 events triggering Crime Coverage, the terms and definitions under Section F, Crime Coverage, control.

1. CRIME GENERAL PROVISIONS

A. Definitions

1) Employee means:

a. An appointed or elected official of a Member;

b. Any natural person:

(i) While in the Member’s service (and for 30 days after termination of service); and

(ii) Whom the Member compensates directly by salary, wages or commissions; and

(iii) Whom the Member has the right to direct and control while performing services for the Member; or

c. Any natural person employed by an employment contractor while that person is subject to the Member’s direction and control and performing services for the Member excluding, however, any such person while having care and custody of property outside the premises.

d. Volunteers, but only while performing duties related to the conduct of the Member’s business.

But Employee does not mean any:

a. Agent, broker, factor, commission merchant, consignee, independent contractor or representative of the same general character; or

b. Trustee except while performing acts coming within the scope of the usual duties of an Employee.

2) Employee Dishonesty means only dishonest acts committed by an Employee, whether identified or not, acting alone or in collusion with other persons, with the manifest intent to:

a. Cause the Member to sustain loss; and also

b. Obtain financial benefit (other than salaries, commissions, fees, bonuses, promotions, awards, profit sharing, pensions or other Employee benefits earned in the normal cause of employment) for the employee or any person or organization other than the employing political subdivisions, intended by the Employee to receive that benefit.

3) Money means:

a. Currency, coins and bank notes in current use and having a face value; and

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b. Travelers checks, register checks and Money orders held for sale to the public.

4. Property Other Than Money and Securities means any tangible Property Other Than Money and Securities that has intrinsic value but does not include any property listed in any Coverage as Property Not Covered.

5. Securities means negotiable and non-negotiable instruments or contracts representing either Money or other property and includes:

a. Tokens, tickets, revenue and other stamps (whether represented by actual stamps or unused value in a meter) in current use; and

b. Evidences of debt issued in connection with credit or charge cards, which cards are not issued by the Member; but does not include Money.

B. General Exclusions In addition to exclusions set forth in other sections of this Coverage Document, the Pool will not pay for loss as specified below:

1) Indirect Loss: Loss that is an indirect result of any act or Occurrence covered by this

Coverage Document including, but not limited to, loss resulting from:

a. The Member’s inability to realize income that the Member would have realized had there been no loss of, or loss from damage to, Covered Property.

b. Payment of damages of any type for which the Member is legally liable. But, the Pool will pay compensatory damages arising directly from a loss covered hereunder.

c. Payment of costs, fees or other expenses the Member incurs in establishing either the existence or the amount of loss hereunder.

2) Legal Expenses: Expenses related to any legal action.

C. General Crime Conditions

1) Consolidation - Merger: If any additional persons become Employees after the inception date of this Coverage Document, any coverage afforded for Employees also applies to those additional Employees.

2) Discovery Period for Loss: The Pool will pay only for covered loss discovered no later than one year from the end of the policy period.

3) Joint Member

a. If more than one Member is named in the CCD, the first named Member will act for itself and for every other Member for all purposes of this coverage. If the first named Member ceases to be covered, then the next named Member will become the first named Member.

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b. If any Member or official of that Member has knowledge of any information relevant to this coverage, that knowledge is considered knowledge of every Member.

c. An Employee of any Member is considered to be an Employee of every Member.

d. If this Coverage Document or any of its coverages are cancelled or terminated as to any

Member, loss sustained by that Member is covered only if discovered no later than one year from the date of that cancellation or termination.

e. The Pool will not pay more for loss sustained by more than one Member than the amount the Pool would pay if all the loss had been sustained by one Member.

4) Loss Covered Under More Than One Coverage of This Coverage Document:

If two or more Coverages of this Coverage Document apply to the same loss, the Pool will pay the lesser of the actual amount of loss up to limit as stated on the CCD.

5) Loss Sustained During Prior Coverage or Insurance

a. If the Member, or any predecessor in interest, sustained loss during the period of any prior coverage that the Member or any predecessor in interest could have recovered under that coverage or insurance except that the time within which to discover loss had expired, the Pool will pay for it under this coverage, provided;

(i) This coverage became effective at the time of cancellation or termination of the prior coverage; and

(ii) This loss would have been covered by this coverage had it been in effect when the acts or events causing the loss were committed or occurred.

b. The coverage under this condition is part of, not in addition to, the limits of liability applying to this coverage and is limited to the lesser of the amount recoverable under:

(i) This coverage as of its effective date; or

(ii) The prior coverage or insurance had it remained in effect.

6) Loss Covered Under This Coverage and Prior Coverage or Insurance Issued by the Pool or any Affiliate

If any loss is covered:

a. Partly by this coverage; and

b. Partly by any prior cancelled or terminated coverage or insurance that the Pool or any affiliate had issued to the Member or any predecessor in interest;

the most the Pool will pay is the larger of the amount recoverable under this coverage or the prior coverage or insurance.

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7) Non-Cumulation of Limits of Liability Regardless of the number of years this coverage remains in force or the number of Contributions paid, no limits of liability cumulates from year to year or period to period.

8) Other Coverage, Bonds or Insurance

This coverage does not apply to loss recoverable or recovered under other coverage, bonds, insurance or indemnity. However, if the limit of the other coverage, bonds, insurance or indemnity is insufficient to cover the entire amount of the loss, this coverage will apply to that part of the loss, other than that falling within any deductible amount, not recoverable or recovered under the other coverage, bonds, insurance or indemnity, but not for more than the limits of liability.

9) Recoveries

a. Any recoveries, less the cost of obtaining them, made after settlement of loss covered hereunder will be distributed as follows:

(i) To the Member, until the Member is reimbursed for any loss that the Member sustains that exceeds the limits of liability and the deductible amount, if any;

(ii) Then to the Pool, until the Pool is reimbursed for the settlement made;

(iii) Then to the Member, until the Member is reimbursed for that part of the loss equal to the deductible amount, if any.

b. Recoveries do not include any recovery;

(i) From insurance, suretyship, reinsurance, security or indemnity taken for the Pool’s benefit; or

(ii) Of original Securities after duplicates of them have been issued.

10) Valuation – Settlement

a. Subject to the applicable Limits of Liability provision, the Pool will pay for:

(i) Loss of Money but only up to and including its face value. The Pool may, at the

Pool’s option, pay for loss of Money issued by any country other than the United States of America:

(a) At face value in the Money issued by that country; or

(b) In the United States of America dollar equivalent on the day the loss was discovered.

(ii) Loss of Securities but only up to and including their value at the close of business on the day the loss was discovered. The Pool may, at the Pool’s option:

(a) Pay the value of such Securities or replace them in kind, in which event the

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Member must assign to the Pool all the Member’s rights, title and interest in and to those Securities;

(b) Pay the cost of any Lost Securities Bond required in connection with issuing duplicates of the Securities. However, the Pool will be liable only for the payment of so much of the cost of the bond as would be charged for a bond having a penalty not exceeding the lesser of the:

1. Value of the Securities at the close of business on the day the loss was discovered; or

2. Limit of liability.

2. COVERAGE PROVIDED

A. Employee Dishonesty Coverage The Pool will pay for loss of and loss from damage to Covered Property resulting directly from the Covered Cause of Loss.

1) Covered Property: Money, Securities, and Property Other Than Money and Securities.

2) Covered Cause of Loss:

a. Employee Dishonesty

b. Failure of any Employee to faithfully perform his or her duties as prescribed by law, when such failure has as its direct and immediate result a loss of the Member’s Covered Property, including inability to faithfully perform those duties because of a criminal act committed by a person other than an Employee.

3) Coverage Extension and Limitation

Employees Temporarily Outside Coverage Territory: The Pool will pay for loss caused by any Employee while temporarily outside the territory specified in the Territory General Condition for a period not more than 90 days.

4) Additional Exclusions, Conditions, and Definitions:

In addition, this employee dishonesty coverage is subject to the following:

a. Additional Exclusions: The Pool will not pay for loss or damages as specified below:

(i) Employee Cancelled Under Prior Coverage or Insurance: loss caused by any

Employee for whom similar prior coverage or insurance has been cancelled and not reinstated since the last such cancellation.

(ii) Inventory Shortages: loss, or that part of any loss, the proof of which as to its existence or amount is dependent upon:

(a) An inventory computation; or

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(b) A profit and loss computation.

(iii) Damages: damages for which the Member is legally liable as a result of:

(a) The deprivation or violation of the civil rights of any person by an Employee; or

(b) The tortious conduct of an Employee, except conversion of property of other parties held by the Member in any capacity.

(iv) Depository Failure: Loss resulting from the failure of any entity acting as a depository for the Member’s property or property for which the Member is responsible.

b. Additional Conditions:

(i) The Member must give the Pool notice as soon as possible of any loss of the type covered under this Coverage even though it falls entirely within the deductible amount.

(ii) Cancellation As To Any Employee:

This coverage is cancelled as to any Employee:

(a) Immediately upon discovery by the Member or any official or Employee authorized to manage, govern or control the Member’s Employees, of any act on the part of an Employee whether before or after becoming employed by the Member which would constitute a loss covered under the terms of this coverage.

(b) On the date specified in a notice mailed to the Member. That date will be at least

60 days after the date of mailing.

The mailing of notice to the Member at the last mailing address known to the Pool will be sufficient proof of notice. Delivery of notice is the same as mailing.

(iii) Sole Benefit: This coverage is for the Member’s sole benefit. No legal proceeding of any kind to recover on account of loss under this coverage may be brought by anyone other than the Member.

(iv) Indemnification: The Pool will indemnify any of the Member’s officials who are required by law to give bonds for the faithful performance of their service against loss through the failure of any Employee under the supervision of that official to faithfully perform his or her duties as prescribed by law, when such failure has as its direct and immediate result a loss of the Member’s Covered Property, including inability to faithfully perform those duties because of a criminal act committed by a person other than an Employee.

c. Additional Definitions

(i) Occurrence means all loss caused by, or involving, one or more Employees, whether the result of a single act or series of acts.

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B. Forgery or Alteration Coverage

The Pool will pay for loss involving Covered Instruments resulting directly from the Covered Causes of Loss.

1) Covered Instruments means checks, drafts, promissory notes, or similar written promises, orders or directions to pay a sum certain in Money that are:

a. Made or drawn by or drawn upon the Member;

b. Made or drawn by one acting as the Member’s agent; or

c. That are purported to have been so made or drawn.

2) Covered Causes of Loss: Forgery or alteration of, on or in any Covered Instrument.

3) Coverage Extension

Legal Expenses: If the Member is sued for refusing to pay any Covered Instrument on the basis that it has been forged or altered, and the Member has the Pool’s written consent to defend against the suit, the Pool will pay for any reasonable legal expenses that the Member incurs and pay in that defense. The amount the Pool will pay under this extension is in addition to the limits of liability applicable to this coverage.

4) Deductible

The Pool will not pay for loss in any one Occurrence unless the amount of loss exceeds the deductible amount shown in the CCD. The Pool will then pay the amount of loss in excess of the deductible amount, up to the limits of liability. This provision does not apply to legal expenses paid under the coverage extension.

5) Additional Exclusions, Conditions and Definitions

In addition to the provisions in the Crime General Provisions, this coverage is also subject to the following:

a. Additional Exclusion

Acts of Employees, Directors, Trustees or Representatives: Loss resulting from any dishonest or criminal act committed by any of the Member’s Employees, directors, trustees or authorized representatives

a. Whether acting alone or in collusion with other persons; or

b. Whether while performing services for the Member or otherwise.

b. Additional Conditions

(i) Facsimile Signatures: The Pool will treat mechanically reproduced facsimile signatures the same as handwritten signatures.

(ii) General Amendment: As respects this coverage, the words Covered Property in the

Crime General Provisions means Covered Instruments.

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(iii) Proof of Loss: The Member must include with the Member’s proof of loss any instrument involved in that loss, or, if that is not possible, an affidavit setting forth the amount and cause of loss.

(iv) Territory: The Pool will cover loss the Member sustains anywhere in the world. The

Territory General Condition does not apply to this forgery or alteration coverage.

c. Additional Definition Occurrence means all loss caused by any person or in which that person is involved, whether the loss involves one or more instruments.

C. Theft, Disappearance and Destruction Coverage The Pool will pay for loss of Covered Property resulting directly from the Coverage Causes of Loss.

1) Inside the Premises

a. Covered Property: Money and Securities inside the Premises or a Banking Premises

b. Covered Causes of Loss: Theft, disappearance, destruction

c. Coverage Extensions

(i) Containers of Covered Property: The Pool will pay for loss of, and loss from damage to, a locked safe, vault, cash register, cash box or cash drawer located in the Premises resulting directly from an actual or attempted theft of or unlawful entry into those containers.

(ii) Premises Damage: The Pool will pay for loss from damage to the Premises or its exterior resulting directly from an actual or attempted Theft of Covered Property if the Member is the owner of the Premises or is liable for damage to it.

2) Outside the Premises

a. Covered Property: Money and Securities outside the Premises in the care and custody of a Messenger.

b. Covered Causes of Loss: Theft, disappearance, and destruction

3) Coverage Extension

Conveyance of Property by Armored Motor Vehicle Company: The Pool will pay for loss of Covered Property resulting directly from the covered causes of loss while outside the Premises in the care and custody of an armored motor vehicle company.

But, the Pool will pay only for the amount of loss that the Member cannot recover:

a. Under the Member’s contract with the armored motor vehicle company; and

b. From any insurance or indemnity carried by, or for the benefit of customers of, the armored motor vehicle company.

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4) Additional Exclusions, Conditions and Definitions

In addition to the provisions in the Crime General Provisions, this Theft, disappearance and destruction coverage is subject to the following:

a. Additional Exclusions: The Pool will not pay for loss as specified below:

(i) Loss resulting from accounting or arithmetical errors or omissions.

(ii) Acts of Employees, Directors, Trustees or Representatives: Loss resulting from any dishonest or criminal act committed by any of the Member’s Employees, directors, trustees or authorized representatives;

(a) Acting alone or in collusion with other persons; or

(b) While performing services for the Member or otherwise.

(iii) Loss resulting from the giving or surrendering of property in any exchange or purchase.

(iv) Loss from damage to the Premises resulting from fire, however caused.

(v) Loss of property contained in any Money operated device unless the amount of

Money deposited in it is recorded by a continuous recording instrument in the device.

(vi) Loss of property after it has been transferred or surrendered to a person or place outside the Premises or Banking remises:

(a) On the basis of unauthorized instructions; or

(b) As a result of a threat to do bodily harm to any person or damage to any property

But, this exclusion does not apply to loss of Covered Property while outside the Premises or Banking Premises in the care and custody of a Messenger if the Member had no knowledge of any threat at the time the conveyance began; or had knowledge of a threat at the time the conveyance began, but the loss was not related to the threat.

(vii) Loss from damage to the Premises or its exterior or to containers of Covered

Property by vandalism or malicious mischief.

(viii) Loss resulting from the Member, or anyone acting on the Member’s express or implied authority, being induced by any dishonest act to voluntarily part with title to or possession of any property.

b. Additional Condition

Duties in the Event of Loss: If the Member has reason to believe that any loss of, or loss

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(i) Banking Premises means the interior of that portion of any building occupied by a banking institution or similar safe depository.

(ii) Messenger means the Member or any Employee while having care and custody of the property outside the Premises.

(iii) Occurrence means an act or series of related acts involving one or more persons;

or, an act, event, or a series of related acts or events not involving any person.

(iv) Premises means the interior of that portion of any building the Member occupies in conducting the Member’s business.

(v) Theft means any act of stealing.

D. Robbery and Safe Burglary Coverage The Pool will pay for loss of, and loss from damage to, Covered Property resulting directly from the covered causes of loss.

1) Inside the Premises

a. Robbery of a Custodian

(i) Covered Property: Property Other Than Money and Securities inside the Premises in the care and custody of a Custodian.

(ii) Property not Covered: Motor vehicles, trailers, or semi-trailers or equipment and accessories attached to them.

But, the Pool will pay only for the amount of loss the Member cannot recover:

(i) Under the Member’s contract with an armored motor vehicle company or other commercial carrier; and

(ii) From any insurance or indemnity carried by, or for the benefit of customers of the armored motor vehicle company.

2) Additional Exclusions, Conditions and Definitions: In addition, this robbery and safe burglary coverage is subject to the following:

(i) Loss resulting from any dishonest or criminal act committed by any of the Member’s Employees, directors, trustees or authorized representatives, whether acting alone or in collusion with other persons, or while performing services for the Member or otherwise.

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(ii) Loss resulting from fire, however caused, except loss from damage to a safe or a vault.

(iii) Loss of, or loss from damage to, property after it has been transferred or surrendered to a person or place outside the Premises on the basis of unauthorized instructions or as a result of threat to do bodily harm to any person or damage to any property.

But, this exclusion does not apply to loss of Covered Property while outside the Premises in the care and custody of a Messenger if the Member had no knowledge of any threat at the time the conveyance began; or, had knowledge of a threat at the time the conveyance began, but the loss was not related to the threat.

(iv) Loss from damage to any property by vandalism or malicious mischief.

b. Additional Conditions

(i) Duties in the Events of Loss: If the Member has reason to believe that any loss of, or loss from damage to, Covered Property involves a violation of law, the Member must notify law enforcement.

(ii) Special Limit of Coverage for Specified Property: The Pool will only pay up to

$1,000 for any one Occurrence of loss of, and loss from damage to:

(a) Precious metals, precious or semi-precious stones, pearls, furs, or completed or partially completed articles made of or containing such materials that constitute the principal value of such articles; or

(b) Manuscripts, drawings, or records of any kind or the cost of reconstructing them or reproducing any information contained in them.

(i) Custodian means the Member or any Employee while having care and custody of the property inside the Premises, excluding any person while acting as a Watchperson or janitor.

(ii) Messenger means the Member or any Employee while having care and custody of the property outside the Premises.

(iii) Occurrence means an act or series of related acts involving one or more persons or an act or event, or a series of related acts or events not involving any person.

(iv) Premises mean the interior of that portion of any building the Member occupies in conducting the Member’s business.

(v) Robbery means the taking of property from the care and custody of a person by one who has:

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(a) Caused or threatened to cause that person bodily harm; or

(b) Committed an obviously unlawful act witnessed by that person.

(vi) Safe Burglary means the taking of:

(a) Property from within a locked safe or vault by a person unlawfully entering the safe or vault as evidenced by marks of forcible entry upon its exterior, and

(b) A safe or vault from inside the Premises.

(vii) Watchperson means any person the Member retains specifically to have care and custody of property inside the Premises and who has no other duties.

E. Computer Fraud and Funds Transfer Fraud Coverage

1) Computer Fraud The Pool will pay for loss of or damage to Money, Securities and other property resulting directly from the use of any computer to fraudulently cause a transfer of that property from inside the premises or Banking Premises

a. to a person (other than a Messenger) outside those premises; or

b. to a place outside those premises.

2) Exclusions: This computer and funds transfer fraud coverage, does not apply to:

a. Credit Card Transactions. Loss resulting from the use or purported use of credit, debit, charge, access, convenience, identification, stored-value, or other cards or the information contained on the cards.

b. Inventory Shortages. Loss, or that part of any loss, the proof of which as to its existence or amount is dependent upon:

(i) An inventory computation; or

(ii) A profit and loss computation.

3) Funds Transfer Fraud

The Pool will pay for loss of Funds resulting directly from a Fraudulent Instruction directing a financial institution to transfer, pay or deliver Funds from the Member’s Transfer Account.

4) Additional Definitions:

a. Fraudulent Instruction means:

(i) An electronic, telegraphic, cable, teletype, tele facsimile or telephone instruction which purports to have been transmitted by the Member, but which was in fact fraudulently transmitted by someone else without the Member’s knowledge or

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(ii) A written instruction (other than those described in Coverage B, Forgery or Alteration

Coverage, Section 1) issued by the Member, which was forged or altered by someone other than the Member without the Member’s knowledge or consent, or which purports to have been issued by the Member, but was in fact fraudulently issued without the Member’s knowledge or consent; or

(iii) An electronic, telegraphic, cable, teletype, tele facsimile, telephone or written instruction initially received by the Member which purports to have been transmitted by an Employee but which was in fact fraudulently transmitted by someone else without the Member’s or the Employee's knowledge or consent.

b. Funds means Money and Securities.

c. Transfer Account means an account maintained by the Member at a financial institution from which the Member can initiate the transfer, payment or delivery of Funds:

(i) By means of electronic, telegraphic, cable, teletype, tele facsimile or telephone instructions communicated directly through an electronic Funds transfer system; or

(ii) By means of written instructions (other than those described in Coverage B, Forgery or Alteration Coverage, Section 1) establishing the conditions under which such transfers are to be initiated by such financial institution through an electronic Funds transfer system.

d. Occurrence means:

(i) An individual act or event;

(ii) The combined total of all separate acts or events whether or not related; or

(iii) A series of acts or events whether or not related;

Committed by a person acting alone or in collusion with the other persons, or not committed by any person during the current agreement period in the Coverage Document and CCD, before such current agreement period or both.

F. Money Orders and Counterfeit Paper Currency Coverage

1) Coverage The Pool will pay for loss due to the acquisition of Covered Property resulting directly from the covered cause of loss.

a. Covered Property:

(i) Money orders, including counterfeit Money orders, of any United States or Canadian post office, express company or national or state (or Canadian) chartered bank; and

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(ii) Counterfeit United States or Canadian paper currency.

b. Covered Cause of Loss

Acceptance in good faith, in exchange for merchandise, Money or services, of:

(i) Any money order that is not paid upon presentation; and

(ii) Counterfeit United States or Canadian paper currency;

that is acquired during the regular course of business.

2) Additional Exclusions, Conditions and Definitions

In addition to the provision in the Crime General Provisions, this coverage is subject to the following:

(i) Acts of Employees, Directors, Trustees or Representatives

Loss resulting from any dishonest or criminal act committed by any of your Employees, directors, trustees or authorized representatives:

(a) Acting alone or in collusion with other persons; or

(b) While performing services for you or otherwise.

(ii) Exchanges or Purchases

Loss resulting from the giving or surrendering of property in any exchange or purchase.

(iii) Voluntary Parting of Title or Possession of Property

Loss resulting from your, or anyone acting on your express or implied authority, being induced by any dishonest act to voluntarily part with title to or possession of any property.

b. Additional Condition

Duties In The Event of Loss: If you have any reason to believe that any loss of, or loss from damage to, Covered Property involves a violation of law, you must notify the law enforcement

c. Additional Definition Occurrence means an:

(i) Act or series of related acts involving one or more persons: or

(ii) Act or event, or series of related acts or events not involving any person.