Smith is Manager of ABC Department Store.Jones,ABC's Security Director,visited Smith to ask some questions.During questioning,Smith admitted that he stole $10,000 in merchandise.He was disciplined,but not fired.The loss was not reported to the insurer.Six weeks later,Smith was observed on a surveillance camera stealing over $50,000 in jewelry from ABC.ABC immediately reported the loss to its crime insurer.Which ISO crime coverage condition may prevent ABC from collecting for this loss?

Question

Quizplus · Accepted Answer

ISO crime coverage condition "termination as to any employee" may prevent ABC from collecting for this loss because Smith was disciplined but not fired after admitting to stealing $10,000 in merchandise. This condition states that coverage will be suspended as to any employee involved in covered dishonest acts if the employer fails to terminate their employment. Since Smith was not terminated after his initial admission, ABC may not be covered for any further losses caused by his dishonest acts.

Smith Is Manager of ABC Department Store