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1. Fidelity Guarantee
Insurance Policy

2. Agenda
 At a glance...
 Definitions
 Scope of cover
 Exclusions
 Policy terms and conditions
 Types of policies
 Rating

3. At a glance...
 The policy indemnifies an employer against
losses sustained by him as a result of dishonesty
or fraud committed by an employee during the
course of employment
 This policy is suitable for employers to cover the
infidelity of employees occupying positions of
trust involving duties such as handling cash,
storekeeping etc.

4. Definitions
 “Insured” means any person, partnership firm or
any body of persons whether incorporated or not,
with whom an employee covered has a contract
of service
 “Employee” means any person (other than a
person whose employment is of a casual nature
or under a contract of service and who is
employed otherwise than for the purpose of the
Insured’s trade or business) who has entered into
a contract of employment with the Insured

5. Scope of cover
 The policy indemnifies the Insured against:
 A direct pecuniary loss in respect of monies or
stocks belonging to the Insured or held in trust by
him (in the course of business)
 Sustained by reason of any act of fraud, forgery,
theft or dishonesty
 Committed on or after the date of commencement
of this policy and during the uninterrupted service
with the Insured
 Discovered during the continuance of the policy or
within twelve calendar months of the expiration
thereof

6. Exclusions
 No liability in respect of:
 Losses arising outside India
 In the event of any change in the nature of the
business or in the duties, conditions of service of
the Employee or change in the basis of
remuneration
 If the Insured shall continue to entrust the
Employee with Money or goods after having
knowledge of any material fact having a bearing on
the honesty of the Employee
 Unexplained losses or shortages discovered at
stock taking
 Any further loss in respect of the Employee
concerned after the discovery of a default
committed by such Employee

7. Policy terms and conditions
 Any money of the Employee in the hands of the
Insured which in the normal course would have
been due to the Employee from the Insured shall
be deducted from the amount payable
 If the Insured is guaranteed by any other person,
society or company against such loss, the
Company shall bear only rateable proportion of
the loss
 The Company shall be entitled at its own
expense, in the name of the Insured to prosecute
all claims and exercise all rights of action
competent to the Insured against the Employee in
connection with whom it has made a payment
under the policy

8. Basis of sum insured
 Cash handling authority given to the employee
 Dues of the employee to the company

9. Types of policies
 Named basis
 The employees to be covered are specifically
mentioned
 Designation (Unnamed) basis
 The designation intended to be covered is
mentioned in the policy along with the number of
persons at each level
 Floater basis
 A single amount of guarantee is allowed to float
over a number of persons insured

10. Rating - Non tariff
Class Descript ion Rat e
Rat e
Per Person
I
Managers, Executives, Officers and Clerks
including cashiers 0.35% 5
II Cash Collectors and travellers 0.50% 10
III Office boys, peons 0.60% 20
CLASS AND RATE TABLE

11. Rating (Contd.)
Days Upt o Percent age
7 10%
30 25%
60 35%
90 50%
120 60%
180 75%
240 85%
Exceeding 240 100%
Short Period Rat es

12. Rating (Contd.)
 Named basis
 Sum Insured per person* Rate
For e.g. 5 Managers (SI - 1,00,000) and 4 Peons (SI -
1,00,000) are to be insured
Premium = (1,00,000 * 0.35 % * 5) +
(1,00,000 * 0.60 % * 4)
= 1,750 + 2,400
= Rs. 4,150

13. Rating (Contd.)
 Designation basis
 (Sum Insured * Rate) +(No. of persons * Rate per
person)
For e.g. 5 Managers (SI - 1,00,000) and 4 Peons (SI -
1,00,000) are to be insured:
Premium = ( I,00,000 * 0.35%) + (5 * 5)
+
(1,00,000 * 0.60%) +( 20 * 4)
= 375 + 680
= Rs. 1,055

14. Rating (Contd.)
 Floater basis (for more than one designation)
 (Sum Insured * Weighted average Rate) +(No. of
persons per designation * Rate per person)
For e.g. 5 Managers and 4 Peons are to be insured
with a SI of Rs. 1,00,000 to float over both levels
Weighted average Rate = [(5*0.35) + (4*0.60)] / 9
= 0.461%
Premium = (1,00,000 * 0.461%) + (5 * 5) + (20 * 4)
= Rs. 566

15. Thank You