Definition of a Fidelity Guarantee
Fidelity guarantee is a type of insurance that is purchased by an employer to protect against losses that are not under general policies for theft or burglary. Fidelity guarantee can also be referred to as a fidelity bond or fidelity insurance.
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Protection
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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 that is offered by fidelity guarantee insurance can be designed to cover all employees or just an individual worker within a company.
Coverage Guidelines
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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, police checks and former employee inquiries on new hires. Companies must inform the insurance company before changing any employees work duties in order to keep their protection current.
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Coverage
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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 who is covered under the policy.
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