13.1 Definitions of Crimes

Throughout property insurance, policies use different terms to describe losses caused by criminal acts. For example, a policy may provide or exclude coverage for theft or refer specifically to damage caused during a burglary. Understanding the type of crime involved is important because each term has a distinct meaning and may affect whether coverage applies. These distinctions are especially important in Commercial Crime insurance, where coverage depends on how the criminal act and resulting loss are classified.

Burglary

Burglary is the unlawful taking of property from inside the insured premises by a person who enters or leaves the premises by force. Visible evidence of forcible entry or exit must be present. The premises means the interior portion of a building occupied by the insured. Safe burglary is a type of burglary involving the theft of, or damage to, money, securities, or other property contained in a locked safe or vault located within the premises.

Most burglaries occur when the insured premises are unoccupied, allowing the offender to enter and remove property without being confronted.

Example

While a retail shop is closed, a thief forces open the front door and steals merchandise from inside. Because visible evidence of forcible entry and exit is present, the loss is classified as a burglary.

Robbery

Robbery is the unlawful taking of property from a person’s care and custody by someone who:

• Causes or threatens to cause bodily harm to that person
• Commits an obviously unlawful act that is witnessed by that person

Example

A thief holds a store employee at gunpoint and removes expensive jewelry from a display case. Because the property was taken through a threat of bodily harm, the crime is classified as a robbery.

Theft

Theft is the unlawful taking of property. Theft coverage is broader than burglary or robbery coverage because it applies to any act of stealing, including losses classified as burglary or robbery.

Example

A shoplifter steals merchandise while a store is open. Because there is no visible evidence of forcible entry or exit and no employee is threatened or witnesses an obviously unlawful taking, the loss would not qualify as burglary or robbery. However, it would still be classified as theft because the property was unlawfully taken.

Mysterious Disappearance

Mysterious disappearance occurs when property is missing and the cause of the loss cannot be determined. Because there is no evidence showing that the property was taken by theft, burglary, or robbery, the loss is not classified as one of those crimes. Commercial Crime policies commonly exclude losses resulting from mysterious disappearance.

Example

After completing an inventory, a store manager discovers that some merchandise is missing. However, there is no evidence showing what happened to the property, such as security footage or signs of theft. Because the cause of the loss cannot be determined, it is classified as a mysterious disappearance.

General Definitions

Employees

An employee is a person who performs services for the insured, receives compensation through salary, wages, or commissions, and works under the insured’s direction and control. The definition includes seasonal employees and individuals temporarily replacing permanent employees. A former employee continues to qualify as an employee for 30 days immediately after termination, unless the person was terminated for theft or another dishonest act.

The definition of employee also includes a trustee, officer, employee, administrator, or manager of an insured employee benefit plan. An employee benefit plan is a welfare or pension benefit plan that is sponsored by the named insured and listed in the Declarations.

Independent contractors are not considered employees under Commercial Crime coverage.

Watchpersons, Custodians, and Messengers

A watchperson is an individual specifically hired by the insured to protect and maintain care and custody of property inside the premises. A watchperson performs no duties other than guarding the property. A custodian is the insured or one of the insured’s partners or employees who has care and custody of property inside the premises. The definition of custodian does not include a watchperson or janitor.

A messenger is the insured, a partner of the insured, or an employee who has care and custody of covered property while it is located outside the insured premises.

Other Definitions

Term	Definition
Money	Coins, currency, bank notes in current use, travelers checks, money orders, and registered checks held for sale to the public. The definition of money does not include evidences of debt.
Securities	Negotiable and non-negotiable instruments or contracts representing money or other property, including tokens, tickets, revenue stamps, and other stamps in current use, and evidences of debt in connection with charge or credit cards.
Other Property	Any tangible property, other than money and securities, that has intrinsic value. This does not include computer programs or electronic data.