Summary: The government crime policies have been updated in 2006 as has the commercial crime policy. As with the prior policies, they are almost identical to the commercial crime policy. This treatment discusses the differences in the 2006 revisions. Since the differences between the discovery and loss sustained forms are discussed in the commercial crime policy those differences will not be discussed here. See Commercial Crime Policy The only policy language reproduced is where the government policies differ from the commercial policy.

Topics covered: Definitions Insuring agreement 1—employee theft Exclusions Conditions

Definitions

As with the commercial crime policy, the definitions are discussed here first. Only those definitions that differ from the commercial crime policy are highlighted. The following terms that are defined in the commercial crime policy and are not included in the government crime policy are manager and member. Even though the government policy, like the commercial policy, defines an employee as one associated with or handling the funds of an employee benefit plan, only the commercial crime policy defines employee benefit plan.

The omission of the definition of “employee benefit plan” may be significant. If money is missing from an “employee benefit plan” there may be some question of coverage if “employee benefit plan” is not defined.

The government policy defines employee in a slightly different fashion. In the definition of employee the government policy has removed employees of an entity merged with the organization prior to the effective date of the policy and any managers, directors or trustees while performing the usual duties of an employee or acting as a member of a board of directors. These changes are directly related to the difference between government entities and private industry. While private industry may merge or consolidate companies, and have governing boards of directors, government entities do not. In the section on what does not constitute an employee the commercial policy says that employee does not include “any agent, broker, person leased to you by a labor leasing firm, factor, commission merchant, consignee, independent contractor, or representative of the same general character.” The government policy eliminates from the exception: “broker,” “factor,” “commission merchant,” and “consignee.”

The government policy removes the following from the definition of “messenger”: “relative” of the named insured and “partners” or “members.” The government policy also adds a section to the definition of “occurrence” to accommodate the “per employee” insuring agreement for employee theft (discussed later).

Insuring Agreement 1-Employee Theft

1.Employee Theft-Per Loss Coverage

We will pay for loss of or damage to “money”, “securities” and “other property” resulting directly from “theft” committed by an “employee”, whether identified or not, acting alone or in collusion with other persons.

For the purposes of this Insuring Agreement, “theft” shall also include forgery.

2.Employee Theft – Per Employee Coverage

We will pay for loss of or damage to “money”, “securities” and “other property” resulting directly from “theft” committed by each “employee”, whether identified or not, acting alone or in collusion with other persons.

For the purposes of this Insuring Agreement, “theft” shall also include forgery.

Analysis

With these two agreements, the government policy promises to pay for loss of covered property due to theft by an employee (per loss) or by each employee (per employee). The crime policy does not make this differentiation.

Exclusions