Georgia Adjuster Practice Test

In a typical policy, which scenario would be excluded from coverage for “Money and Securities”?

1. Loss due to unexplained disappearance

2. Loss due to robbery

3. Loss due to fraud

4. Loss due to employee theft

The correct answer is: Loss due to fraud

In a typical insurance policy, coverage for "Money and Securities" often includes specific exclusions that outline circumstances under which losses will not be covered. In this context, loss due to fraud is specifically excluded because insurance policies are designed to protect against theft and loss from external incidents rather than losses stemming from intentional deception or fraudulent activities conducted by individuals. Fraud implies an element of dishonesty where one party deceives another for gain, and under most insurance policies, losses resulting from fraudulent actions might fall outside the policy's protective scope. This means that if money or securities are lost because of fraudulent actions by an employee or another party, the insurer often does not provide coverage for that loss, reinforcing the notion that the responsibility for mitigating fraud lies with the insured party. In contrast, the other scenarios typically fall within the types of losses that might be covered. For instance, losses from robbery involve external threats, while unexplained disappearances and employee theft may be categories that policies cover, albeit often with specific conditions or limits.