Employee Dishonesty and Computer Fraud

The State maintains a blanket crime policy covering Employee Dishonesty and Computer Fraud. This policy covers all state agencies and universities* and pays for loss of, and from damage to, covered property (money, securities, and property other than money and securities). Sometimes this policy is referred to as the Master Honesty Bond.

Employee Dishonesty are dishonest acts committed by employees with the manifest intent to cause the State to sustain loss and also to obtain financial benefit for the employee or any person or organization intended by the employee to receive a benefit. Covered property for employee dishonesty coverage must be under the direct control of the State agency.

Computer Fraud is the theft of property following and directly related to the use of any computer to fraudulently cause a transfer of that property from inside the premises or banking premises to a person (other than a messenger) outside those premises or to a place outside those premises.

FAQs about the Master Employee Dishonesty Policy

Crime Policy Limits and Deductibles

Insuring Agreement

The State of NC Master Crime Policy provides the following coverage on a blanket basis for all state entities except those specifically excluded, therefore your State Board or State Agency is currently covered for the following:

Employee Dishonesty

$5,000,000 Limits Per Occurrence
$100,000 Deductible Per Occurrence

Computer Fraud

$5,000,000 Limits Per Occurrence
$100,000 Deductible Per Occurrence

Funds Transfer Fraud

$5,000,000 Limits Per Occurrence
$100,000 Deductible Per Occurrence

If added by endorsement, Insuring Agreement(s):

Fraudulently Induced Transfers*

$500,000 Limits Per Occurrence
$250,000 Deductible Per Occurrence

*Fraudulently Induced Transfer coverage is listed on the policy but it does not automatically apply to all State Agencies. This coverage is available as an option for an additional premium for those entities which request it.

Definitions

Employee Dishonesty - Employee dishonesty coverage (sometimes called employee theft coverage) is the one type of crime insurance that nearly every organization needs, since employee dishonesty losses are excluded from coverage under virtually all commercial property policies. For this reason, it is probably the single most important type of crime coverage.

Computer Fraud - Computer fraud coverage pays for loss of money, securities, and other tangible property caused by the use of a computer to fraudulently transfer covered property from inside the insured's premises (or a banking premises) to a person or place outside those premises.

Funds Transfer Fraud - Funds transfer fraud coverage pays for loss of money and securities resulting from fraudulent use of a bank's funds transfer system, in which a thief purporting to be the insured instructs the bank to transfer funds from the insured's account, using the agreed-upon methods, codes, and passwords.

Fraudulently Induced Transfer (or Fraudulent Impersonation) - loss resulting from the transfer of money or securities by an employee who is tricked/ deceived by someone impersonating another employee. The employee who makes the transfer is acting in good faith, so it is not employee dishonesty. The fraud is committed by an outsider who is impersonating a manager or high level employee.

Reporting A Loss

In the event of loss, the insurance company must be notified as soon as possible, but not later than 30 days after loss discovery. Claims under this policy should be reported to Liz Hale at the North Carolina Association of Insurance Agents, Inc. at 919-377-1674 or Margie Boyd at the Department of Insurance at 919-647-0060.