(a) Explain a fidelity guarantee insurance policy.
(b) List and explain the four types of policies in fidelity guarantee insurance.
Explanation
(a) Fidelity guarantee insurance policy: Fidelity guarantees insurance policy, guarantee the payment for the dishonest or unfaithfulness by the employees to the employer. It is purchased by an employer who may suffer a loss as a result of dishonesty or failure from employee.
(b) The four types of policies in fidelity guarantee insurance are:
(i) Individual Policy: Under this individual policy, the name of the employee covered is stated and the amount of cover for each and everyone listed in the policy schedule.
(ii) Blanket Policy: This is the form of unnamed policy which covers employees without showing name or position. It is suitable for employees in very large organizations.
(iii) Named collective policy: The names and duties of all employees covered are stated in the policy. Schedule and amount covered are equally stated against each name.
(iv) Unnamed collective policy: It is also known as position policy which covers employees by categories. The amount of covered is usually a floating sum that varies with categories of staff covered.