Employee Fidelity Guarantee Insurance

The policy covers direct pecuniary losses resulting from theft, embezzlement, fraud, or dishonesty by employees during their employment.

Coverage applies to acts committed by employees during their uninterrupted employment with the insured while actively working for the company.

Losses must be discovered either during the policy period or within a specific discovery period, typically 12 months after employee termination.

The amount payable is limited to the sum insured for each employee or category of employees, as specified in the policy schedule.

The policy usually applies within a specified geographical region where the company operates, unless otherwise agreed upon.

Covers fraudulent acts by employees in positions of trust who have access to company funds, assets, or sensitive financial information.

Coverage varies based on the number of employees and their roles. High-risk positions handling large sums of money may require higher coverage limits.

The sum insured for each employee or category is outlined in the policy. Maximum payout is limited to the sum insured regardless of actual loss amount.

Changes in employee duties, responsibilities, or salary without notifying the insurer can affect coverage. Significant alterations must be communicated.

The policy may require specific accounting procedures and checks. If controls are not in place or followed, insurers may reduce or deny claims.

Prior knowledge of dishonest or fraudulent behavior by an employee may exclude future acts of fraud by the same employee from coverage.

Coverage is often restricted to the country or territory specified in the policy. Losses outside this region may not be covered unless explicitly stated.

Employees in positions of trust may commit fraud, theft, or embezzlement, leading to substantial financial loss. Insurance ensures businesses can recover from such losses.

Companies handling large amounts of cash, valuable assets, or sensitive financial data are particularly vulnerable to internal fraud requiring protection.

Internal fraud can disrupt operations and damage financial health. This policy helps maintain continuity and mitigate the financial impact of fraud.

Having insurance covering internal fraud improves stakeholder, investor, and partner trust, knowing that risks are managed and potential losses covered.

In sectors like finance and retail, having Employee Fidelity Guarantee Insurance is often a regulatory requirement or strongly recommended risk management practice.

The policy can be tailored to meet specific industry needs and organizational roles, ensuring the most vulnerable areas are adequately covered.

Employees stealing or misusing company funds, transferring money to personal accounts, or manipulating financial records for personal gain.

Physical theft of inventory, equipment, supplies, or other tangible assets by employees, including unauthorized removal of company property.

Employees forging signatures, altering checks, creating false invoices, or manipulating financial documents to commit fraud.

Unauthorized access to computer systems, manipulation of electronic records, or fraudulent electronic fund transfers by employees.

Employees using company credit cards for personal expenses, processing fraudulent transactions, or manipulating payment systems.

Employees stealing confidential information, customer data, or trade secrets for personal benefit or to sell to competitors.

Extends the policy to cover losses arising from fraudulent activities by employees that impact third parties, such as clients or business partners.

Covers theft or misappropriation of physical goods or inventory by employees, ensuring losses are covered beyond just monetary theft.

The discovery period for identifying fraudulent acts can be extended beyond the typical 12 months, providing additional time for detecting losses.

Allows the policy to cover a group or category of employees rather than being limited to individuals specifically named in the policy schedule.

Extends the geographical scope of the policy, allowing coverage for losses that occur outside the policy's standard territorial limits.

Covers legal fees and associated costs if the company needs to pursue legal action against an employee following an act of fraud or dishonesty.

Provides additional protection against losses resulting from fraudulent activities conducted via computer systems and unauthorized electronic transfers.

Covers costs incurred in investigating fraudulent acts, including forensic audits, professional investigation services, and legal consultation fees.

Notify the insurer in writing within 7-14 days of becoming aware of any fraudulent or dishonest act by an employee. Prompt notification is crucial.

Take all reasonable steps to prevent further losses including suspending the employee, securing company assets, or tightening financial controls.

File a police complaint or First Information Report (FIR) detailing the fraudulent act. Provide a copy of this report to the insurer.

Submit completed claim form with supporting documents including proof of loss, internal investigation reports, and police reports.

The insurer conducts investigation to assess claim validity, reviewing documents and possibly conducting interviews with relevant personnel.

Cooperate fully with the insurer during investigation, providing additional documentation or access to financial records as requested.

Once verified, the insurer settles the claim based on coverage limits and policy terms within specified timeframe after investigation completion.

After settling the claim, the insurer may pursue legal action against the fraudulent employee to recover the amount paid.

Choose insurers with strong financial backing to ensure they can handle large claims and provide reliable coverage over the long term.

Look for insurers with proven track record in efficiently processing fidelity claims and understanding the complexities of employee fraud investigations.

Select insurers with deep understanding of your industry's specific risks and experience in providing fidelity coverage to similar businesses.

Choose insurers offering flexible policy options that can be tailored to your specific business needs, employee structure, and risk profile.

Ensure the insurer provides responsive customer service, dedicated claim managers, and ongoing support throughout the policy period.

Look for insurers who provide additional risk management services, helping implement internal controls and fraud prevention measures.