When it comes to commercial crime insurance, one of the most important aspects to consider is coverage for defense costs. In the unfortunate event of a claim, these costs can quickly add up and become a significant financial burden for any business. That`s why it`s crucial to understand which commercial crime insuring agreements include coverage for defense costs.
The most common insuring agreement that provides coverage for defense costs is the “Loss Sustained Form.” This form is typically used for small to mid-sized businesses and covers losses sustained during the policy period as a result of employee dishonesty, forgery or alteration, theft, disappearance, or destruction of money or securities.
Under the Loss Sustained Form, defense costs are covered as long as they are incurred in the investigation, defense, or settlement of a claim covered by the policy. This includes fees for attorneys, accountants, or other professionals necessary to defend the claim.
Another insuring agreement that may include coverage for defense costs is the “Discovery Form.” This form is commonly used for larger businesses with more complex risk profiles and covers losses that are discovered during the policy period, regardless of when the actual loss occurred.
Under the Discovery Form, defense costs may be covered if they are incurred in the investigation or defense of a covered claim, but this can vary depending on the specific policy language. It`s important to carefully review the terms and conditions of the policy to determine what is covered.
It`s worth noting that not all commercial crime insurance policies include coverage for defense costs. Some policies may require a separate endorsement to be added, while others may exclude defense costs entirely. That`s why it`s essential to work with an experienced insurance broker who can help you find the right policy for your business and ensure that you have the necessary coverage in place.
In conclusion, understanding which commercial crime insuring agreements include coverage for defense costs is essential for any business that wants to protect itself from financial loss. The Loss Sustained Form is the most common agreement that provides coverage for defense costs, while the Discovery Form may also include this coverage. However, it`s crucial to carefully review the terms and conditions of the policy to determine what is covered and work with an experienced insurance broker to find the right policy for your business.