Question 88

An unendorsed Commercial Crime policy is designed to pay for direct losses to the insured's property, subject to a deductible.

An unendorsed Commercial Crime policy primarily covers direct losses that occur to the property of the insured, and this coverage is typically subject to a deductible that the insured must meet before the policy begins to pay out.

A) direct losses to the insured's property, subject to a deductible

This option is correct as it accurately reflects the primary function of an unendorsed Commercial Crime policy. It is specifically designed to cover direct losses to the insured's property, which means that any theft, fraud, or similar criminal activities resulting in loss will be compensated, albeit after the insured has paid the deductible.

B) direct and indirect losses to the insured's property, with no deductible

This option is incorrect because an unendorsed Commercial Crime policy does not cover indirect losses, which may include lost income or additional expenses incurred due to a crime. Additionally, such policies typically have a deductible that must be satisfied before coverage begins.

C) property in the care of the insured, with no deductible

This choice is inaccurate as it suggests coverage for property in the care of the insured without considering the deductible. An unendorsed Commercial Crime policy does not specifically target property in the care of the insured, and it always involves a deductible.

D) losses due to interruption of business

This option is also incorrect. An unendorsed Commercial Crime policy does not cover business interruption losses, which are typically addressed under other types of insurance policies, such as business interruption or property insurance.

Conclusion

The correct answer, A, is definitive as it clearly outlines the specific coverage provided by an unendorsed Commercial Crime policy, emphasizing direct losses and the existence of a deductible. All other options fail to accurately describe the coverage scope and conditions of the policy, making them unsuitable choices for this question.