What are the two main forms of Commercial Crime Insurance?

The correct identification of the two main forms of Commercial Crime Insurance as the Loss Sustained Form and Discovery Form is based on how these forms function in the context of coverage for crime-related losses.

The Loss Sustained Form provides coverage for losses that occur during a specified time period and are discovered within a certain timeframe after the loss. This form is particularly valuable for businesses that wish to have clarity and a direct understanding of specific incidents that result in financial loss due to criminal acts, such as employee dishonesty or theft.

On the other hand, the Discovery Form offers coverage for losses that are discovered during the policy period, regardless of when the loss occurred. This implies that even if the crime happened before the policy was in effect, as long as it is discovered while the coverage is active, it will still be covered. This form is advantageous for businesses that want ongoing protection against previously unnoticed criminal activities.

Understanding these distinctions is crucial because they inform how businesses manage their risk and assess their insurance needs concerning potential criminal activities that could impact their financial stability.