It takes a lot of effort to make a business succeed and it is no one man’s play. The cooperation, coordination and trust amongst the team members lies at the base of every successful business. But the dishonesty of even one employee might cause a huge loss to the business and may lead to its downfall. Therefore, even after selecting the right team, it is necessary to be prepared for any such instances. Fidelity Insurance is one such precautionary measure against fraudulent employees every business must take.
Fidelity insurance is an insurance policy that offers protection to businesses against business losses caused by employee fraud, theft or dishonesty. It also covers losses caused to customers due to such dishonest employees. The amount of premium for this insurance premium amount is determined by factors like the number of employees, risk exposure and nature of business.
Every business which has employees that handle money processes is eligible to take up fidelity insurance such as, restaurants, cafes, retail businesses, etc.
The types of fidelity insurance plans
The various types of fidelity insurance plans available are:
1. Individual policy: Under this, the cover is limited to the losses caused due to fraud or dishonesty of an individual employee.
2. Blanket policy: This policy covers a group of employees without mentioning the name of the guaranteed person.
3. Collective policy: Under this policy, coverage is provided against the losses caused due to the fraudulent acts of a group of employees. The coverage under a collective fidelity insurance policy is decided based on each employee’s position and responsibility.
4. Floater policy: One amount of guarantee is given across a group of employees. To avail of this cover, the group should contain at least five employees.
The benefits of this policy are as follows:
The coverages offered under fidelity insurance are as follows:
The coverage that is offered to the insured company is limited to:
A fidelity insurance policy does not cover certain situations. Some of these exclusions are:
Any business wanting to avail of fidelity insurance should have proper records and details. The business should fill in the proposal form and give all the information and additional documents required. For instance, a company seeking fidelity insurance has to provide a detailed list of departments and employees to the insurer. Every important detail should be disclosed to the insurance company.
The claim process for fidelity insurance is easy. The steps are as follows:
Step 1: The insured business should immediately intimate the insurer about the claim incident. Based on the situation, the business should also take quick disciplinary action against the employee.
Step 2: The claim documents must be submitted along with the relevant proofs of the act of infidelity and loss.
Step 3: The insurer will hold a forensic audit. If the claim is approved, the auditor will verify and approve the claim amount. If it is rejected, the insured company will be informed. The reason for rejection will also be mentioned.
If the claimant is dissatisfied with the solution provided, they can take the matter to the court of law.
The documents required for fidelity insurance claims are:
The coverage offered by a fidelity insurance policy can be different for every business. The coverage offered will depend on the requirements of the business.
The cover can be availed for all employees or even particular departments. There are various types of fidelity insurance policies that are offered by insurance companies today.
That is why businesses who want to opt for fidelity insurance should conduct proper research, both offline and online before making a decision.
Are you looking for a new insurance policy or a policy renewal? Reach out to us and let us assist you.