Write notes on the following: Fidelity Guarantee

Fidelity Guarantee Fidelity Guarantee insurance is an insurance policy designed to indemnify the Insured (the employer) for the loss of money or property sustained as a direct result of acts of fraud, theft or dishonesty by an employee in the course of employment. Fidelity coverage, or a fidelity bond, protects the business owner from employee theft. It might be money, property, forgery or credit card fraud. All of these actions fall within the perils covered by a fidelity bond. Fidelity guarantee insurance protects employers from financial losses that are a result of employees who embezzle or siphon or in any other manner defraud directly from a company. Such protection may be designed to cover all employees or just one of employees. If the employer of an employee whose fidelity has been guaranteed continues to employ him even after a proved act of dishonesty without notice to the guarantor, the surety is discharged. That is a basic principle implicit in the very nature of a fidelity guarantee. The guarantor in such a case guarantees the fidelity and ensures the loss against the risk of infidelity and not the fact of infidelity. If the employer wants to continue a dishonest servant after his dishonesty has been proved then he must give the guarantor notice of the fact of infidelity so that the guarantor may get an opportunity to say whether he would continue his guarantee or not for a man whose infidelity has been proved.