In a recent case, a parent company took out a crime insurance
policy for itself and its subsidiaries. When a property manager for
its subsidiary stole funds through forged checks over several
years, the policyholder sought a recovery under the crime insurance
policy. Unfortunately for the policyholder, there was no insurance
coverage.
In C.S. McCrossan Inc. v. Federal
Insurance Co., No. 18-1949 (8th Cir. Aug. 6, 2019), the
parent policyholder obtained a crime policy for employee theft and
forgery. The coverage grants required the insurance company to pay
the parent for direct loss of money sustained by an insured
resulting from theft or forgery committed by an employee and from
forgery or alteration of a financial instrument committed by a
third party. The policy excluded coverage for loss committed by any
authorized representative of an insured.
