What type of loss does the "loss sustained" agreement in commercial crime insurance cover?

The "loss sustained" agreement in commercial crime insurance specifically covers losses that are discovered during the policy period. This means that for an insured to be eligible for recovery, the losses must be identified and reported while the policy is active.

This type of coverage is particularly beneficial because it allows businesses to claim losses that may have occurred in the past, provided they are discovered as a result of an incident that falls within the coverage scope during the current policy term. Thus, the focal point is on the discovery of loss rather than the actual occurrence, emphasizing the timing of the discovery in relation to the policy duration.

In contrast, options that specify losses occurring only after the policy period or limiting coverage to fraud or theft do not accurately reflect the broader scope of the loss sustained agreement, which is designed to protect against a range of criminal acts as long as those losses are identified during the policy period.