Will mess with this later, but brief look at is I'd use the following areas of the forms:
CP 00 90 7-88

All of A,D

CP 00 10 4-02

A1b (all of A, all of 1, all of b),
A2a (all of A, all of 2, all of a),
A5d(2)(b)

CP 10 30 4-02

A (all of it)
B2h, i, and m (all of B, all of 2 and all of h,i & m)
B3b (all of B, all of 3, all of b)
C1e (all of C, all of 1, all of e)
F1 in its entirity

That would cover a most of it, plus all the standard language, disclaimers, etc that go into the letter. It would probably be about a 8-10 page ROR when completed. Now the real trick is for you to write it. If i find time over the weekend I'll put one together by cut and paste of the policy language, but no time to really read it over close and do it now.

In the absence of any other coverage forms, why would a ROR letter be needed based on the facts as presented?  No other property loss reported, other than the cash.  Currency is not covered property under the CP0010 regardless of the cause of loss.  A direct denial could be issued based on the facts at hand.  So, what's the catch here, Steve?  You've put out the bait & I feel like you're about to set the hook!!

I just read all the forms listed and some others that I have in my CPCU book with the CP forms and CP 10 which describes the covered property specificly excludes currency and money. I agree with Mr. Kuntz, write the letter and  only use the language on page 2 of 14 # 2 Property Not Covered.

Covered Property does not include:

a. Accounts, bills,currency, food stamps or other evidence of debit, money, notes or securities. Lottery tickets held for sale are not securities;

ROR should be well thought out by top mgt. or GA's but the more words you use is like the monkey climbing the flag pole. More height (words)shows more of the  A-- H---.

In Texas the lottery folks ask the vendors to record the last sale each closing time, and if the tickets are stolen in a burglary and the vendors report when discovered, they are not held responsible...... so don,t pay for tickets in Texas and the merchants know this... but they can try. Also most of the cigarettes from the wholesale house show the retail cost, but the cost is about 25 to 26% lower than retail. Yes the front door pulled off by a chain and pickup is part of the loss.

Most merchants do not purchase a money policy or a safe burglary... the cost is just too high.

Who will hooked on this one Steve, keep em coming, I am tired of the weather channel. 

Steve I would have the insured sign a "standard" blank fill in the blanks non waiver, and explain that a full investigation is underway, but do not want to estop yourself from sending out a detailed ROR when the investigation is completed, which may take another week or so to review the agents application and the complete underwriting file and see if a police report was made etc.

Steve I am trying to guess the 2nd part of your question.The CP(policy) has been modified with parts of the Business Owners Coverage Form BP 00 03 07 02. the has G. Optional Coverages 2. Money and Securities which out lines that theft, meaning any act of stealing and even broader, disappearance. It also has employee dishonesty.If this is a manuscript policy, you threw a big curve ball in the dirt for strick three.

Just as I thought, Steve....you were holding back per your hint.  If it had been a local loss assigned to me, naturally I'd have been down at the agency & asking them to pull up the entire coverage forms for me before issuing a denial.  Otherwise, if via a phone convo with the agency didn't satisfy me regarding coverage forms available....then fer' sure a ROR letter is needed.  So, where's this going?  The ROR letter is going to pretty much limited to the language regarding no coverage for currency.  No other policy language for "employee dishonesty" or "money & securities" can be quoted unless those endorsements are attached...and thus far we don't know that they were. 

I'm on the same track as Sir Beaumont on this one.  A theft like this has many variables, not the least of which is who might turn out to be the eventual culprit.  It goes without saying, however, that it was either an employee or not an employee.  Knowing this, I would want to work from both possibilities.

Form 0090.  I agree with Steve B. that the fraud warning should be part of the reservation of rights.  However, I might not put the legal action against us clause in the ROR letter.  I might save that for a later letter, whether a denial or an arffirmation of coverage.

Form 0030.  I agree that I should include the insuring agreement, especially with regard to business personal property (A and A1b) and it would be very important to include A2a (exclusion of money and certain other securities as covered property).  There sould also be some mention, as Steve B. recommends that deals with property off premises and excluding property in or on a vehicle (A5d).  I would include all of section d rather than simply (2)(b).

Form 1030.  Section A should be included.  It tells us that all causes of loss are covered unless specifically excluded.  B2h (employee theft exclusion) and i (voluntary parting exclusion) are both very important.  I might not have thought of using i.  Glad Steve did.  I don't agree that m applies because that has to do with using all reasonable means to save and preserve property at and after the time of loss.  I would not consider not locking the car door (for instance) to fit this criteria because it would have been an act performed or not performed before the loss.  I also would not include B3b (acts or decisions of any person,etc.) unless it was to rule out coverage for an intentional theft by an insured.  I can see why Steve B. might include it.  I don't think I would, but it would exclude intentional acts which would include theft.  The inclusion of C1e might be a consideration because it deals with mysterious disappearance.  It is possible that the bag of cash simply dropped on the ground when he opened the door.  I'm not sure whether I would use this one, but if I wanted to keep all my options open, I might.  Finally, F1 in its entirety is important because it spells out the limited circumstances under which property in transit can be covered, including property in a vehicle, but specifying that there must be signs of forced entry into the locked compartment of a vehicle.

Of these all, the exclusion of money and certain other securities is probably the strongest coverage defense if only these three forms are considered. 

It's going to be a few more days until Ike hits Houston, so we have time for the second part of this question, so now it's time for me to add another form to the mix.

As most people who work commercial claims know, many companies include with their commercial policies a Property Enhancement Endorsement. These may be specific to the company who issues them, but are nonetheless somewhat standardized. I have learned to always, always check the property enhancement endorsement. Sometimes it includes unexpected coverage. Happy Burger happens to have such an endorsement. Among its provisions is the following:

c. Employee Dishonesty

(1) You may extend the insurance that applies to Your Business Personal Property to apply to loss or damage to "money" and "securities" and "other property" from 'theft" committed by an "employee", whether identified or not. acting alone or in collusion with other persons.

(2) As used in this Extension:

(a) "Employee mean any natural person:

(i) While in your service or for 30 days after termination of service;

(ii) Who you compensate directly by salary, wages or commissions; and

(iii) Who you have the right to direct and control while performing services for you; or

(iv) Employed by an employment contractor while that person is subject to your direction and control and performing services for you, excluding, however, any such person while having care and custody of property outside the premises.

"Employee" does not mean:

(vi) 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;

(vii) Any "manager", director or trustee except while performing acts coming within the scope of the usual duties of an "employee"; or

(viii) Any shift bosses or managers, floormen, dealers, boxmen or shills.

(b) 'Manager" means a person serving in a directorial capacity for a limited liability company.

(c) 'Money" means:

(i) Currency, coins, and bank notes in current use and having a face value; and
(ii) Travelers checks, register checks and money orders held for sale to the public.

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

(e) "Other property" means any tangible property other than "money" and "securities" that has
intrinsic value but does not include any property excluded under this policy.

(f) "Securities" means negotiable and nonnegotiable instruments or contracts representing either "money" or property and includes:

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

(ii) Evidence of debt issued in connection with credit or charge cards, which cards are not issued by you; but does not include "money".

(g) 'Theft" means the unlawful taking of "money", "securities" or "other property" to the deprivation of the Insured.

(3) You may extend this coverage to apply to loss caused by any "employee" while temporarily
outside the Coverage Territory for a period not more than 90 days.

(4) The most we will pay for loss in any one "occurrence" of Employee Dishonesty under this
Extension is $50,000.

Now what is everyone's opinion of whether there is coverage for this loss? You have investigated and have not discovered any additional facts other than those given in the original scenario.  There is no inland marine crime coverage on the policy.  This is the last form that will come into play on this loss.

As far as I'm concerned, Steve, this is mainly a Cat site and you along with Tom Toll are the guru's out here.  But this topic is out of the coverage realm as far as storms are concerned.  So, the storm guys aren't going to enter the mix on the argument/discussion.  And this isn't an argument per se, except I do have to disagree with you.   I would never issue a ROR letter based on the loss disclosed and with the coverage forms as described especially if the initial phone contact indicated the same "lost money" under the same circumstances. I would though, within the time constraint and within good faith measures, first contact the agent (if I was the staff adjuster) to ascertain if other coverage forms were available. But, if I'm an independent, there is absolutely no ROR letter with my name as author unless all coverage forms & their language available to me to quote in that ROR letter.  I know you've added that extra coverage form now, but what is it?  Do you have the form#?  I do not back off of my former stance...being the stubborn little mule that I can be.  Did I say mule?  meant jackass.....sorry to beat anyone else to the punch.   

Steve, I do agree with you. Anything that will make an adjuster THINK, is good. It may not be related to cat work, but it does require the mind to work. I encourage anyone to post questions and/or scenarios of coverage.

I kinda agree with all. I can think of a loss that could be a cat loss adjuster looking at a commercial building after a major storm. The form is the CP-10, 20 with the general condition. The loss was reported as a windstorm, severe roof damage to building and contents the building limit is 1 million the contents limit is 1 .5 million.

The adjuster finds a tilt wall building with a webbed metal joist roof system that is 500 sqs of BUR over perlite insulation and a metal deck. The roof is supported by 5 inch steel pipe supports that are attached to the 25/16 I beam supports on a grid of 30 ft OC n/s and 28 ft e/w. A large section is on the floor of this warehouse . The exact location is 30 feet from the South exterior wall . The open roof section is 48 feet wide and 120 feet long. The building is a mattress warehouse with mattress stacked on large wood pallets(the size of the mattress) 8 sets high. The roof does not have parapets. The 8x12 inch out side gutter has down spouts ever 70 feet that dump into the storm sewer system of the city. The roof drains are on 200 sf grids. The adjuster had to park one block away and wade into the loss. All of this was discovered 48 hours after the hurricane passed by the plant manager. His employees moved all the soaked stock out under a metal porch, and they errected a 3 foot high berm on the warehouse floor with sand bags to contain new rainfall inside the berm to pumped outside with a large rental pump.

When the adjuster gets on the roof he can not find any evidence of wind damage around the perimeter of the  building or in the area of the fall. While the adjuster is at the loss site  he walks to another section seperated by a fire door and a cinder block wall is not damaged and new stock is coming and going by the mattress coming in from China in cargo containers and going out in 42x10 semi- trailors.

Sort this out and I will give part you some investigation that will affect the loss.

The GA assigned to the loss returned the next day and interview the foreman and some of the employees. The adjuster noticed the 25/16 I beams were 34 foot long; therefore the butt ends were cantilevered on the support post. Possible 4-6 feet on some post. While talking to the employees and the tow motors whizzing around he noticed some nicks on the post and ask the oldest employee if any of them ever got knocked down. His reply was O yes, just a week before the storm ole Boudreaux hit one under the roof collapse and knocked it down and we did not have time to get it repaired before Old Gustov hit us.

You must send in a preliminary report with you recomendations and reserve after you first vist. You have 2 more days. What do you tell the VP of claims of your largest customer.

Lots of coverage questions on this loss for a simple old cat. adjuster.... huh

Geez, Ray,

I was hoping for your help to sort out whether there was coverage for this loss under the Property Enhancement Endorsement.  I didn't know you were going to throw in a whole new scenario!

I think you made your point, though.  Skill at reading and understanding the policy for one coverage hones your skills for reading the policy and understanding how it might apply even to a cat loss.  Of course, if the carriers just want estimators or damage appraisers they will not be interested in how well we can read the policy.  They can just go ahead and throw away the money they might have spent for 50 catadjusters on paying for a building that has no coverage under the windstorm policy in the first place. 

In addition, I have often found a few daily claims thrown in with the wind or hail claims whenever I worked for GAB because in a catastrophe the staff adjusters get way behind as well.  I could turn them back in or handle them.  I preferred to handle them (and get paid for handling them).

I use independents for all my claims except the few that I adjust from the desk.  When I encounter an independent who didn't check the policy materials I sent with the assignment, or sometimes didn't even recognize the materials as policy materials, dec sheets, etc. I put them on my list of people who I won't use again.

It's a a lesson I learned from Osma Obama on TV. When you don,t know the correct answer you stall for time, by changing the narrative, but we need some heavy commercial adjusters to come out on these simple windstorm losses that do not require much investigation or coverage knowledge....

I have the answer to yours, but, I will explain my coverage opinion before IKE hits Brazoria County(south of Galveston Island)

Hello Steve, Roy ..... This endorsement is applicable only IF PROVEN there was "Employee Dishonesty" (POL) i.e. a conviction, or absolute proof of theft. With this endoresement there are Usually Limits, Otherwise in your overall Scenario, you would need an ROR sent out, An ensuing Investigation, and Finally a Denial.  This is not a covered loss under this policy as described.

Roy, what a surprise.  Welcome back.

My questions to you, then, are:

Isn't it possible, or even likely, that there is employee invovlement in this loss?  Is it really necessary to absolutely prove that there is employee involvement in the loss?  Don't we owe it to the insured to give the insured the benefit of the doubt?  Remember that our insured is not Guido, but Happy Burger.

There are other coverage issues that this endorsement raises, as well.

How true, Roy...the employee dishonesty claims can be ugly to handle.  It's been a few years since I handled any but did have several.  You can't get a statement from the "suspect", and it was usually a smaller sized company with sloppy book-keeping by the "suspect" and little or no oversight by the owner.  Throw in the low budget accountant they used who had no useful information or records to back up anything, and these types of claims made you feel a little bit helpless.  And of course the agent is crawling up & down your back because the insured knows he's been scalped by an employee, but you cannot prove it in order to afford the coverage. 

Oh, and by the way...sorry I left you out Ray.  I mentioned the "guru's of coverage", but forgot to mention you as the grandfather guru.  I see now another name from the past has thrown his opinion out here.  That was the main intent of my prior post, by the way Steve.  Just seems this type of topic doesn't get a whole lot of input from the storm guys/gals.  Maybe that will change as the audience increases with the impending arrival of IKE. 

HA, HA, STEVE THANKS FOR THE TEASE ........ AS I HAVE SAID BASED ON YOUR SCENARIO, POLICIE, ENDORSEMENTS ............. THIS HAS CAUSE FOR DENIAL. UNLESS HOWEVER INVESTIGATION REVEALED EMPLOYEE STOLE THE MONEY IN AN ELABORATE SCHEME, AND THERE WAS SUFFICIENT POL, AND EVEN THEN HIS IS SUBJECT TO COVERAGE LIMIT .....

BOTTOM LINE, ISSUE ROR, INVESTIGATE, AND BASED ON YOUR SCENARIO, THE POLICIES AND ENDORSEMENTS THERTO THIS IS NOT A COVERED LOSS.

STEVE I DONT MEAN TO DENY YOUR CLAIM SIR, BUT THE POLICY IS VERY CLEAR, AND I AM DEVISTATED I MUST DENY YOUR CLAIM SIR, HOWEVER I HAVE A GREAT DEAL OF COMPASSION FOR YOUR LOSS. PLEASE IF YOU FIND OF ANYTHING THAT WOULD CHANGE THE FACTS PROVIDED LET ME KNOW AND WE CAN ALWAYS TAKE A SECOND LOOK! AND THANKS FOR BEING A WONDERFUL LOYAL CUSTOMER!

NOW MAY I PLEASE PURCHASE ME A "HAPPY BURGER" 

BTW GOOD TO BE BACK, SOME OF US HAVE TO WORK FOR A LIVING ...... HEHEHEHEHE

Still no time to deal with this, but that enhanced endorsement makes a huge difference in how a ROR would be put together. Even so, I see serious coverage issues on the claim as outlined so far. One needs to look at where the occurrance took place. Appears to have happened in a vehicle off premise, correct? The enhancement gives money coverage. It also gives theft by Guido, or in concert with Guido coverage. If Guido has no involvement in the theft, does that enhancement endorsement have any bearing on whether theft of $ is covered in general terms? Where did the theft occur? Where (physical location that is) does the policy give coverage to theft? CP 00 10 4-02 A1b has to be looked at closely, and then also under that same form A5a(2) and A5dmust be looked at closely. You also can't forget to review CP 10 30 4-02 F1 in it's entirety needs to be looked at closely if there are any parts of that area that jumps out at you in determing coverage or lack thereof.

There should be a methodology everyone uses to determine if coverage exists or exclusions apply when a fact sceniaro is presented. For CAT claims is is pretty basic most of the times, but it should be followed. Steve's example is an excellent case to where there are a lot of different areas of the policy/endorsements that provide coverage to a degree, only to have it taken away elsewhere. Plaintiff attorneys are very good at picking and choosing the parts of the policy that gives them the coverage they want, while ignoring other parts that limit or take away coverage.

Another thing that came to my mind based on a comment I saw somewhere in a response, in civil cases the burden of proof is a lot lower to show someone did something wrong, then it is in criminal case. (prepondance of the evidence vs beyond a reasonable doubt). An example is it's quite a bit easier to prove someone committed arson to their property in an insurance case and deny the claim vs actually getting a criminal conviction of that same person for the same arson. prime example is OJ Simpson.

Dont do to much reading into the claim, Making assumptions, or Guessing ..... as it is, not a covered loss, and the ROR can be simplified, thats if you chose to use one. Personally knowing the fact of the claim up front, Why use an ROR .......... It is what it is! Just sayin!

Two of the issues Steve B. brought up are important for this loss.  The first is the burden of proof and preponderance of the evidence.  This was stolen by Guido or someone other than Guido.  When in doubt, to whom do you give the benefit of that doubt?  How much proof does it take to sway us to believe it was or wasn't Guido. 

Second is the methodology for determining which part of the policy trumps which other part.  In general an endorsement is designed to change the coverage provided by another policy form, either to expand, limit, eliminate, or negate some provision (usually) in the principal coverage forms.  The terms of an endorsement, therefore, will generally trump the main policy form.  It may not, however, eliminate other exclusions which it does not address. 

One of the issues no one has addressed yet is whether Guido qualifies, as an assistant manager, as an employee under the endorsement.

By the way, I did a bit of checking.  ISO does have a property enhancement endorsement.  Many carriers modify it to fit their underwriting needs.  That explains its standardized nature with slight differences (or sometimes major differences) between carriers.

(After the fact edit:  Actually ISO does not seem to have a property enhancement endorsement per se.  But many property enhancement endorsements include ISO language taken from a number of different ISO forms.   SE)

What would the specific portions of the policy be for the denial of coverage? Keep in mind that in your state, if you fail to reserve a particulatr right, you waive that the right to assert it in the future. Let's assume the same holds true for denial of the claim. What are your specific reasons for denying the claim. There is something not mentioned in the above post which may be very germane to the facts as presented. It may be the "one more aspect of this claim" you mention above, but it is something that we know about the case already.

why would you need an ROR, Best to have denial letter to insured stating basis, as described .... Best claim practices on all commercial claim denials, partial denials included.

Coverage decision made, Denial is clear as per policy & endorsements, Issue Claim facts, evidence & details, Document Diary, Stack claim & Submit to carrier, Next claim please!

We don't need the ROR any more, Roy.  We needed it at the beginning of this claim to give us time to investigate.  But why would we start from scratch on the denial when we already have an ROR that quotes the policy coverage defenses we were reserving.  So now we take that back out, edit it to assert our reasons for coverage denial and, voila, a denial letter. 

Meanwhile Steve Beaumont has once again thrown the gauntlet down.  He indicates there is yet one more consideration in the materials we already have.

Actually, there are at least two more pieces to the coverage puzzle in what we already have before us.  One of them may give us coverage due to ambiguous language. 

A bit of a double-edged sword, to borrow a phrase from Ray H.   Everyone has a point, but I think Roy & I might be on the same page if you just go back to the first facts.  It's always easier to reverse field off of a denial, than it is to reverse field off of a ROR.  The lesson here, I think you were putting out & hinted at Steve, is....have all your coverage forms & ducks in a row before making any kind of investigation or comments on coverage.   

Mike,

You might just have figured out why I piece-mealed this one out one spoonful at a time, rather than give all the information all at once.

BTW, the last word is not said yet.  The agent has yet to speak.  Remember that she got a copy of the denial letter, and she is not happy about you denying her biggest account, Happy Burger.

Not so fast, my friend (credit: Lee Corso, afterall it is now CFB season)......I've been hedging my comments all along knowing what a Wile E. Coyote you can sometimes be.  Before the agent begins to chew anyone's rear quarters,  I would hope he/she has verified that all applicable coverage forms were disclosed to the adjuster.

By the way, even though this case doesn't apply to Cat losses, I hope the readers take note because coverage issues do often occur. Particularly, if IA's are working losses without the full coverage forms available to them.  That's where the inside assigner/examiner has to recognize particular coverage forms and inform that field adjuster up front, as well as sending out a ROR if the initial report warrants it.  The ROR is a little bit easier on your storm losses of course vs. the situation you posted.   Sometimes, too, the ROR might not be initiated until after the initial inspection since no details may be available prior to an inspection.

OK, you have sent out your denial letter with a copy to the agent.  You have attempted to close the file, but it is Monday morning and when you arrive you find an email from the agent stating that she believes you have been premature in your denial. She admits that the points you make in your denial letter are correct, but she believes you have overlooked a few things.

1.  The property enhancement endorsement employee dishonesty section says "whether identified or not".  The agent contends that this means that the perpetrator does not have to be identified in order for coverage to apply.

2.  The employee dishonesty clause says, "(3) You may extend this coverage to apply to loss caused by any "employee" while temporarily outside the Coverage Territory for a period not more than 90 days."  The agent points out that this does not say the employee must be the thief, but only that the loss must be "caused by any 'employee".

3.  The agent, after making these two arguments, points out to you that you overlooked another section of the property enhancement endorsement that is more relevant to this loss than the employee dishonesty section.  It appears, despite all your diligent searching you have overlooked the "Money and Securities - Inside and Outside" Section of the Property Enhancement Endorsement.  It reads:

Money and Securities -Inside and Outside

(1) You may extend the insurance that applies to Your Business Personal Property to apply to loss of your "money" and "securities" resulting directly from "theft", disappearance or destruction while:

(a) Inside your premises;

(b) Inside the premises of a banking institution or similar safe depository; or

(c) Outside your premises in the custody of:

(i) A "messenger"; or

(ii) An armored motor vehicle company.

(2) As used in this Extension:

(a) "Messenger" means you, any of your partners or members, or any employee while having care and custody of "money"  or "securities" outside your premises.

(b) "Money" means currency, coins, and bank notes in current use and having a face value

and travelers checks, register checks and money orders held for sale to the public.

(c) "Occurrence" means an:

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

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

(d) "Securities" means negotiable and non-negotiable instruments or contracts representing

either "money" or other property and includes:

(i) Tokens, tickets, revenue and other stamps (whether represented by actual stamps or

unused value in a meter) in current use; and

(ii) Evidences of debt issued in connection with credit or charge cards which cards are

not issued by you;

But does not include "money",

(2) "Theft" means the unlawful taking of "money" or "securities" to the deprivation of the Insured.

(3) The most we will pay for loss in any one "occurrence" under this Extension is $50,000.

So, now you need to consider the three arguments made by the agent.  What do you think of them?

Posted By Steve Ebner on 15 Sep 2008 11:36 AM

OK, you have sent out your denial letter with a copy to the agent.  You have attempted to close the file, but it is Monday morning and when you arrive you find an email from the agent stating that she believes you have been premature in your denial. She admits that the points you make in your denial letter are correct, but she believes you have overlooked a few things.

1.  The property enhancement endorsement employee dishonesty section says "whether identified or not".  The agent contends that this means that the perpetrator does not have to be identified in order for coverage to apply.

2.  The employee dishonesty clause says, "(3) You may extend this coverage to apply to loss caused by any "employee" while temporarily outside the Coverage Territory for a period not more than 90 days."  The agent points out that this does not say the employee must be the thief, but only that the loss must be "caused by any 'employee".

3.  The agent, after making these two arguments, points out to you that you overlooked another section of the property enhancement endorsement that is more relevant to this loss than the employee dishonesty section.  It appears, despite all your diligent searching you have overlooked the "Money and Securities - Inside and Outside" Section of the Property Enhancement Endorsement.  It reads:

 

 

Money and Securities -Inside and Outside

(1) You may extend the insurance that applies to Your Business Personal Property to apply to loss of your "money" and "securities" resulting directly from "theft", disappearance or destruction while:

(a) Inside your premises;

(b) Inside the premises of a banking institution or similar safe depository; or

(c) Outside your premises in the custody of:

(i) A "messenger"; or

(ii) An armored motor vehicle company.

(2) As used in this Extension:

(a) "Messenger" means you, any of your partners or members, or any employee while having care and custody of "money"  or "securities" outside your premises.

(b) "Money" means currency, coins, and bank notes in current use and having a face value

and travelers checks, register checks and money orders held for sale to the public.

(c) "Occurrence" means an:

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

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

(d) "Securities" means negotiable and non-negotiable instruments or contracts representing

either "money" or other property and includes:

(i) Tokens, tickets, revenue and other stamps (whether represented by actual stamps or

unused value in a meter) in current use; and

(ii) Evidences of debt issued in connection with credit or charge cards which cards are

not issued by you;

But does not include "money",

(2) "Theft" means the unlawful taking of "money" or "securities" to the deprivation of the Insured.

(3) The most we will pay for loss in any one "occurrence" under this Extension is $50,000.

 

So, now you need to consider the three arguments made by the agent.  What do you think of them?

Mr. Ebner,

Please first of all, any Adjuster who does not have the Policy in its entirety, which includes all endorsements and enhancements to policy is simply not doing their job, and should not be Adjusting Commercial Claims. Having said that ......

Arguably, Under your scenario it does not include "Money" as defined in section (2) (b). (b) "Money" means currency, coins, and bank notes in current use and having a face value Which is cause for Denial of claim and endorsement as initially Concluded.  

Having adjusted hundreds of BI, Inland marine, Commercial Property, And Business Liability claims with their endorsements and in my career, I have yet to see an "PROPERTY ENHANCEMENT ENDORSEMENT" that is not accompanied by a Limit of liability schedule and an separate deductible amount. And is typical subject to master policy exclusions. I would like to see this endorsement, as it is written.

Lastly, having said all of that I would absolutely ask Agent to please provide this endorsement (In an unchallenged manner), As I am sure agent is reading into the Endorsement, or adding wording to it. I would review it in the best interest of customer service.

I am SURE, As it is written above, this would still be a Denial By Definition as a result of (2)(b) ............... Bottom Line CLAIM DENIED!  

NOW Any more Wrenches you desire to throw into this BRAIN TEASE ...... Hehehehe

Steve

• The Loss of the Money is heresay, and I didnt see anywhere where there was POL, Anyone, at anytime can say anything and even file official reports as such (Fraud But happens)
• Further any contest of this Denial, I would certainly turn Claim over to SIU for investigation. The insured has the Burden of proving loss, and I dont see any proof other than heresay.

Enhancement endorsement's involving monitory instruments have very low Limits Of Liability and HIGH Deductible amounts and accompanied by a schedule.

Posted By Steve Ebner on 18 Sep 2008 12:22 AM
You will get no argument from me that we need to have all the forms and endorsements before considering coverage. In fact that has been my point, here. Many claim reps try to go from memory about what is covered or not covered. The wisest adjusters read the policy when investigating each claim, even if it is the thousandth time they are reading it. This is especially true on commercial claims. It is barely possible to memorize an auto policy or even a homeowners policy, but a commercial policy has too many possible variations.

The definition of "money" as it is used in the endorsement is exactly why it does provide coverage. This section of the endorsement is an extension of coverage, not an exclusion.

I never said the adjuster did not have all the forms and endorsements from the start. I simply asked us to consider the forms in the order that I would normally consider them. I always start with the basic forms, then move on to the endorsements. The agent is not changing or adding any wording. I am quoting it word for word.

As far as the agent's three arguments, here is my analysis:

1. The "known or unknown" clause does not change the fact that the "known or unknown" person must still be an employee and there would need to be a preponderance of the evidence that would show an employee is the thief. This argument does not hold water.

2. There is an intervening cause if the employee did not steal the money himself. Without the preponderance of the evidence pointing to the employee actually being the thief, the proximate cause is whoever actually took the money. If this cannot be tied to the employee, he cannot be said to be "the cause" of the loss.

3. The "Money and Securities - Inside and Outside" section definitely provides coverage for this loss, whether it is a theft or a mysterious disappearance, whether it was commited by an employee or someone else. The limit of coverage is $50,000.

I disagree with you, Roy. Claim accepted. Pay it quickly with a letter explaining that you have reconsidered the denial based on considerations brought to your attention by the agent. The agent gets some well deserved credit. You show that you are reasonable and likely avoid bad faith by showing that you made an honest mistake and are willing to correct it quickly. The insured thinks he or she has a good agent and a reasonable insurer.

And the moral of this exercise is "Don't stop checking the policy until you've checked the whole policy." I've seen it many times. A claim rep finds one clause of a policy that either denies or affirms coverage -- and there they stop. It's usually the supervisor who considers the bigger picture and often overturns the initial decision of a line rep. The truly impressive adjuster will be able to walk the supervisor through the policy and support their position with all the applicable policy provisions.

The Agent has brought forth considerable credits, I am happy you agree with me regarding readin the policy and endorsements in that order, Your policy Interpretation is correct, so I stand corrected regarding the (2) (b) wording in Endorsement.

However Steve I need you to consider the POL, After all it was my basis (not including my correction noted)  ........ As you have written it is heresay and anyone or a combination can say anything, You have an arguable point, But I Feel so Do I? For arguments sake, Please allow me the Proof as You have presented the claim, As I have read and re read and feel as though I am correct before I issue settelemnt and an correction letter. This I must be satisfied as per policy conditions.

Still have a couple questions that come into my mind on this one.  We have determined that money is a covered item I believe.  I think that we may have determined that Guido would have been a covered person under the policy/endorsements had he taken the money, etc.  Remember that a complete investigation is required on a case like this and those who said no ROR needed, to go ahead and deny up front based facts as presented may have been premature.  How often are theft/mys dis. claims denied upfront with no investigation/R/S/ police report, etc.  Steve, what did Guido state in his R/S about the theft of the $? That it was in the car at the time he got out to look at the accident, and he placed it under the seat? Then he got back in and drove to work and it was gone. Does he swear someone got into the car and took it while at accident? What did he tell the police about that? I am assuming there were no broken windows on the car when he got back to it, or smashed door locks as he would have noticed that right away probably and it would be noted on the police report. What did the car look like when you investigated it afterward (going back to that investigation thing that is stuck in my claw)? I would venture to guess that Guido is not going to tell you he took the $ or handed it off to someone else. Based on the piecemeal stuff you fed us, his testimony is going to be that someone got it out of the car at the scene of the accident while he was trying to see if he could help.

That is how I look at the circumstances of this case. Anyone who denied upfront without all the facts (coverages or investigation) is way to quick to pull the trigger. ROR, with at least all the parts originally quoted initially involved, and maybe adding in some clarification, or backing out some based on the enhanced endorsement language. Anyone still see any areas that may raise any questions of coverage that the agent's assertions don't cover? Steve, I agree with your analysis of the the three bullet points that the agent brings up. Roy, I know we all do it ourselves, but it is dangerous when we say things like "Enhancement endorsement's involving monitory instruments have very low Limits Of Liability and HIGH Deductible amounts and accompanied by a schedule." I recently made a similiar comment on the forums about "most policies have language in the flood exclusion about if a fire ensues..." Reliance on those type of blanket statements w/o benefit of reading the coverages actually involved will get one nailed far too often.