What is the insurer's likely response to a claim for loss due to an accounting omission under a Commercial Crime Coverage Form?

What is the insurer's likely response to a claim for loss due to an accounting omission under a Commercial Crime Coverage Form?

• A. Loss is fully covered
• B. Loss is payable after a waiting period
• C. Loss due to accounting omission is excluded
• D. Loss is subject to a co-insurance penalty

Answer: (C)

In the context of a Commercial Crime Coverage Form, the insurer typically excludes losses resulting from accounting omissions. This is because such omissions are considered errors or misstatements that arise from negligence or improper record-keeping rather than theft, fraud, or other covered perils. Accounting omissions imply that there was a failure to record or manage finances accurately, which does not align with the intent behind crime coverage, which focuses on insurable risks associated with dishonest acts. Therefore, an insurer would respond to a claim related to a loss due to an accounting omission by denying coverage under the policy, reinforcing the principle that the coverage is designed to protect against specific types of losses resulting from criminal activities.

In the context of a Commercial Crime Coverage Form, the insurer typically excludes losses resulting from accounting omissions. This is because such omissions are considered errors or misstatements that arise from negligence or improper record-keeping rather than theft, fraud, or other covered perils. Accounting omissions imply that there was a failure to record or manage finances accurately, which does not align with the intent behind crime coverage, which focuses on insurable risks associated with dishonest acts. Therefore, an insurer would respond to a claim related to a loss due to an accounting omission by denying coverage under the policy, reinforcing the principle that the coverage is designed to protect against specific types of losses resulting from criminal activities.