13.5 General Conditions

Many of the Conditions included in Commercial Crime coverage forms establish the applicable extended discovery periods and explain how coverage applies when the current policy replaces prior insurance. In addition to standard policy conditions, several conditions apply specifically to all Commercial Crime coverage forms.

Additional Premises or Employees

Under the Additional Premises or Employees condition, any new premises established by the insured and any additional employees hired during the policy period are automatically covered. The insured is not required to notify the insurer or pay an additional premium. However, this automatic coverage does not apply to premises or employees acquired through a merger or consolidation.

Consolidation – Merger or Acquisition

Under the Consolidation or Merger condition, premises and employees acquired through a consolidation or merger are automatically covered for the first 90 days. To continue coverage beyond this period, the insured must notify the insurer as soon as possible and obtain the insurer’s consent to extend coverage to the newly acquired premises and employees. The insurer may require the payment of an additional premium.

Joint Insured

Under the First Named Insured condition, the first named insured is authorized to act on behalf of all insureds regarding the policy. In addition, information known by any insured that is relevant to the insurance is considered known by every insured.

Other Insurance

Under the Other Insurance condition, when the Commercial Crime policy applies as primary insurance and other insurance also covers the loss, the insurer will pay only its pro rata share. When the policy applies as excess insurance, it will pay only the portion of the covered loss that exceeds the other insurance’s limit and deductible. This applies even when the other insurance cannot be collected.

Territory

Unless the policy states otherwise, Commercial Crime coverage applies to covered occurrences taking place within the United States, its territories and possessions, Puerto Rico, and Canada.

Valuation – Settlement

Under the Valuation condition, loss of money is valued at its face value. Securities are valued at their market value at the close of business on the day the loss is discovered. Other covered property, including damage to the premises or its exterior, is generally valued on a replacement cost basis.