Fidelity Guarantee

Fidelity Guarantee

Fidelity Guarantee Insurance covers financial losses incurred as a result of dishonesty on the part of the insured’s employees.

This includes misappropriation of funds as well as theft of stock and raw materials. Fidelity guarantee insurance (FGI) exists to safeguard your firm or organisation against theft of the firm’s own money, securities or property by an employee, partner, contractor or volunteer. FGI can also be known as first-party fraud, theft or employee dishonesty cover.
Importantly, FGI cover should not be confused with third-party fraud and dishonesty cover. Third-party fraud and dishonesty refers to theft of the client’s money, as opposed to the accountancy firm’s own money, and is usually covered within the main insuring clause (civil liability) of a professional indemnity policy.

Why choose Covenant Insurance Brokers?

Why do you need fidelity guarantee insurance?

Every business having employees to handle cash and payment processes will require fidelity insurance cover. The following business can avail fidelity insurance and get the benefits of policy as these businesses are more vulnerable to the risk of employee frauds – Restaurants and cafes Retail businesses Businesses that require trade licenses A business that requires the collection of personal information from customers

Types of Fidelity Insurance

Availing fidelity insurance is one of the parts in a business’s risk management practice. Fidelity insurance plans are available in four types. Following are the types of fidelity insurance plans available-

  • Individual policy: Under an individual policy, coverage is limited to losses due to fraud or dishonesty of an individual employee.
  • Collective policy: Under the collective policy, coverage is provided against the business losses caused due to fraudulent acts by a group of employees. Coverage in this type of fidelity insurance policy will be decided based on each employee’s responsibilities and position. 
  • Blanket policy: Blanket policy covers a group of employees without the names of the guaranteed person. Basically, this type of policy is issued to well-established businesses.
  • Floater policy: Floater policy guarantees a group of employees with one amount of guarantee is given across the group. Minimum of five employees need to be there to avail this cover.

What are the Features of Fidelity Insurance?

Fidelity insurance provides coverage against financial losses suffered by the organisation due to fraudulent act employees. Following are the features of fidelity insurance –

  • The policy provides comprehensive coverage against various risks arising from fraud and the dishonest act of an employee or group of employees such as loss of money, property, securities or other assets, computer fraud, forgery, loss to customers etc
  • Fidelity insurance offer tailor-made coverage to businesses depending on the need and nature of work
  • Fidelity insurance offers coverage with a broad definition of ‘employees’
    Coverage under fidelity insurance will start for the insured event on or after the date of commencement of the policy.
  • Coverage is also applicable for a year or 12 calendar months from the date of policy expiration
  • In case of death, dismissal or retirement of the employee, coverage is valid for 12 calendar months of such death, dismissal or retirement whichever of these events occurred first.

What's Covered?

The fidelity insurance policy covers theft of funds committed by the employees

The fidelity insurance provides coverage for loss of business assets such as property, stock certificates or any other assets

The fidelity insurance provides protection against loss of customer’s property caused by dishonest acts of an employee

The fidelity insurance protects the business from financial crises coming from a small portion of the workforce (dishonest employees) which can affect the entire business and other employees.

The fidelity insurance protects the reputation of business along with ensuring absolute transparency in supervision and accountability requirements within the business.

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