Opinion ID: 765488
Heading Depth: 3
Heading Rank: 2

Heading: The LEU Policies

Text: 14 LEU issued three policies to PEC effective February 7, 1992 for a twelve month period: (1) London Primary Layer Policy; (2) First LEU Excess Policy; and (3) Second LEU Excess Policy (collectively, the LEU Policies). The Primary Layer Policy and the First LEU Excess Policy provided coverage for Employee Theft, Premises Loss and Transit Loss. The Second LEU Excess Policy provided for Employee Theft occurring at PEC's NJ and NY offices; and Premises Coverage at those same two locations. The application form for these policies was submitted through M&S on January 16, 1992, and signed by Robert Felzenberg as PEC's president. 15 Question 10 of the LEU application asked, [h]as the proposer suffered a loss during the past five years? If Yes give brief details and amount involved. Felzenberg replied, YES, SECURITY SYSTEM FOR PREMISES & VAULT WAS BREACHED DURING NON OPERATING HOURS. BURGLARY AMOUNT WAS $1,500,000. OCCURRED ON 5/19/88 AT OUR [NY office] LOCATION. 16 Question 36 inquired, [i]s there any other information which is or may become material to the proposed insurance and which is not already disclosed to underwriters? The response was NONE. Above the line on which Robert Felzenberg signed his name was written the following: 17 I/WE HEREBY DECLARE THAT THE ABOVE STATEMENTS, PARTICULARS AND ANSWERS ARE TRUE AND THAT I/WE HAVE NOT SUPPRESSED OR MISSTATED ANY MATERIAL FACTS. . . . 18 IT IS FURTHER AGREED THAT THE CONTINUED ACCURACY OF THE STATEMENTS, PARTICULARS AND ANSWERS SHALL BE A CONDITION PRECEDENT TO UNDERWRITERS' LIABILITY UNDER THE PROPOSED INSURANCE. 19 Also pertinent to this appeal, the LEU Primary Policy provided that: 20 Employee or Employees means, respectively, one or more persons while in the regular service of any Insured in the ordinary course of the Insured's business . . . whom any Insured compensates by salary, wages and/or commissions and has the right to govern and direct in the performance of such service; and shall also mean; 21 (A) Any non-compensated officer of any Insured. . . . 22 (C) Any director or trustee of any Insured while performing acts coming within the scope of the usual duties of an Employee.