Fidelity guarantee insurance


Fidelity implies the faithful or loyal performance of a duty and a fidelity guarantee policy is an insurance against the results of dishonesty or disloyalty, both of which stem from a lack of fidelity. Fidelity guarantee may be bought by any organization or person who may suffer as the result of the dishonesty, failure in the loyal performance of duty or, in certain cases, the mistake of another.

The majority of policies are issued to protect the employer against direct pecuniary loss, and in many cases, also loss of stock that the employer might sustain through acts of dishonesty by the employee in the course of his employment.  In the light of this exposure, Insurers may make enquiries into the systems of checks and methods of supervision and into the business and domestic history of any employee whose fidelity is to be guaranteed.

The following policies are issued:
(a) Individual Policy:         This type of policy is issued where one employee is covered by name for a stated amount.
(b) Collective Policy:       Named collective or unnamed collective
(c) Blanket Policy:           A form of unnamed policy which includes all employees without showing names or positions.
(d) Positions Policy:          This is usually issued for local government guarantees. Instead of using names, the “position” is guaranteed for a specified amount


    • Total number and description of employees to be bonded
    • Limit of liability per loss