Other Business Solutions
What is Fidelity Guarantee Insurance?
What does Fidelity Guarantee Insurance cover?
Fidelity guarantee will reimburse a loss from the following circumstances:
- Fraudulent Conversion
- Loss of property
- Loss from loans or trading
Acts from employees for personal financial gain are considered improper. Indemnification is also provided for theft of property by computer fraud and theft of funds from a financial institution. Fidelity cases often end up in lawsuits. This means there are third parties involved and costs such as defence, judgments and settlements are also accommodated based on the terms of contract.
How important is Fidelity Guarantee Insurance?
Acts from employees for personal financial gain are considered improper, yet fraud and crime within organizations are becoming more and more prevalent. Studies have shown and warned companies that significant financial losses can be incurred without adequate protection. The rise in technological equipment, electronic data and asset transfers further amplifies the exposure. Companies where employees have constant access to cash, stocks and other assets are considered higher in risk, especially with the increase in computer crime in the world today. Hence, it is pertinent to utilize fidelity guarantee as a means to manage employees' risk. Other ways to minimize the risk include:
- Organize an internal audit system for all financial records.
- Have an independent accountant perform a full audit annually.
- Make sure that bank accounts are reconciled by someone other than those who handle deposits and withdrawals.
- Have countersignature procedures for checks.
- Make sure there is joint handling of any securities.
- Have strict security procedures for all computer operations.
- Establish formal management procedures.
- Initiate a formal employment policy for hiring new employees.
Who needs Fidelity Guarantee insurance?
How much does a Fidelity Guarantee policy cost?
The cost can vary from company to company but the key indicators are based on the following:
- Number of employees
- Track record
- Company industry
- Security measures