Fidelity Guarantee

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.


This policy covers you as an employer against any direct pecuniary loss you may sustain through act(s) of dishonesty by your employee(s) such as act(s) of forgery, embezzlement, larceny or fraudulent conversion. The coverage is not limited to misappropriation of cash and stock.

Object of Insured

Type of object of insurance

  1. Cash
  2. Foreign currency
  3. Stocks

Type of Insurance

4 types of Fidelity Guarantee:

  1. Individual policy: Under an individual policy, coverage is limited to losses due to fraud or dishonesty of an individual employee.
  2. 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.
  3. 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.
  4. 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.


This insurance does not cover for:

  1. Losses arising out of the suppression of facts affecting the risk at the time of effecting the policy
  2. More than one claims made in respect of any one employee
  3. If there are any changes in the conditions or circumstances of the said employment without the consent of the company.
  4. Losses arising elsewhere than in the territorial limits stated in the policy schedule
  5. Losses arising due to non-observance and relaxation of the system of checks and precautions
  6. Consequential or indirect loss or damage which is not the direct result of insured perils, nor does the policy cover apprehended loss or damage or contractual liability or legal liability of any kind
  7. Discovered more than 12 months after the termination either of the guarantee or of the service of the employee concerned
  8. Loss or damage attributable to willful acts or gross negligence on the part of the insured, employee or any other person acting on their behalf
  9. Losses such as trading losses, stock-taking shortages and losses not caused by dishonesty or fraud
  10. The loss is by an act committed subsequent to an earlier act of fraud or dishonesty which had come to the notice of the insured or supervisor or to insured’s representative
  11. Any loss resulting directly or indirectly from trading in securities
  12. Terrorism damage


Extended Coverage

Any loss or damage caused due to terrorism (which is generally excluded in the base plan) can be covered under the fidelity insurance by paying an additional amount of premium.

Sum Insured

Financial limit as specified by Insured

Minimum Data Requirement

Underwriting info:

  1. Employee list with position and responsibility details
  2. Occupation/Type of Business
  3. Loss record within 3 years
  4. Security system at the insured place
  5. The amount of money saved
  6. Place where the money stored
  7. Person in charge of the key holder
  8. Type of safety box

Claim Procedure

In the event of loss/damage, the Insured is required to:

  1. Notify the Company of the loss as soon as reasonably practicable but not later than fourteen (14) days from the date of discovery.
  2. Deliver to the Company in the format required a statement of the loss with relevant information and other particulars including date and circumstances of the event so far as the same are known.
  3. Report the matter to the Police and take steps towards recovery of the lost money and/or property.
  4. Provide any additional information that will assist in dealing with the claim.

Supporting Documents

  1. Claim form
  2. Policy report
  3. Policy Investigation Result
  4. Internal audit report explaining the method of embezzlement as well as verifying the loss amount.
  5. Letter of employment and/or Termination
  6. Detailed description of the employee’s job duties
  7. Records supporting the amount claimed
  8. Other supporting document

The Insurer may appoint a loss adjuster to verify the loss.