August 2005 Dec Page

Question of the Month

The topic of employee theft always raises some questions. The insuring agreement under the commercial crime coverage form provides for payment of loss or damage to money, securities, and other property resulting directly from theft committed by an employee; and this coverage depends quite a bit on the definition of employee. The form does offer an extended definition of employee. Basically, an employee is any natural person while in the service of the named insured, compensated directly by the named insured, and subject to the direction and control of the named insured. However, does this mean an officer of the company is considered an employee? Are former employees considered as employees if their acts are not discovered until after they leave the named insured company? Are leased employees and temporary employees included in the form's definition of an employee? And, what about student or intern workers? If any of these people steal money or other property from the named insured, will the crime coverage form respond to a claim?

For the answers to these questions and to develop a better understanding of the crime coverage form, see Commercial Crime Coverage Form.