ABSTRACT
Crime losses are increasing in frequency, severity, and creativity. A best-in-class crime policy insulates public water/wastewater systems from losses arising from employee theft and other types of first-party crimes. Such a policy combines the following eight coverages: (1) employee theft; (2) forgery or alteration; (3) inside the premises – theft of money and securities; (4) inside the premises-robbery or safe burglary of other property; (5) outside the premises – theft of money and securities; (6) computer fraud; (7) funds transfer fraud; and (8) money orders and counterfeit currency. The most important of the foregoing coverages is employee theft, as that exposure is pervasive and weighty. Noteworthy policy exclusions include losses arising from any individual classified in the definition of employee where you had knowledge of their previous dishonest act. Inventory shortages are similarly not covered. The same applies to the voluntary parting of property as well as monetary loss from extortion and data breaches involving confidential material. There should be an exception to the voluntary parting exclusion in Coverage 7 (Funds Transfer Fraud) so that social engineering claims are covered. Theft of automobiles, mobile equipment, personal tools, and business personal property are excluded in the crime policy but covered in other policies previously discussed. Your crime policy is an important sealant that addresses material gaps in your other first-party policies.
