Definition of a Fidelity Guarantee


Fidelity guarantee is a type of insurance an employer purchases to protect against business losses that are not under general policies for theft or burglary. Fidelity guarantee also is referred to as a fidelity bond or fidelity insurance.


Fidelity guarantee insurance protects employers from financial losses that are a result of employees who embezzle, commit forgery, fraud or steal directly from a company. Protection offered by fidelity guarantee insurance can be designed to cover all employees or just an individual worker or position within a company.

Coverage Guidelines

Insurance companies that offer fidelity guarantee coverage can set certain guidelines for a company’s hiring practices and offer protection to a company if employee duties do not change. To fulfill these requirements, companies might have to perform reference checks, criminal background checks and former employee inquiries on new hires. Companies must inform the insurance company before changing any employee's work duties in order to keep the protection current.

Practical Use

This type of insurance is required by law for brokerages, cash carriers or security firms. Fidelity guarantee insurance is offered under various types of policies which include individual, collective, floater and blanket. Before any type of claim can be paid, a company must first prove that an act of infidelity was committed by an employee covered under the policy.

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