Fidelity insurance protects companies and organisations from losses incurred as a result of fraudulent acts by specified individuals. This product type usually covers costs that arise as a result of dishonest acts of an employee(s). These policies are designed to protect monies, securities and other property from employees who intend to cause the company substantial loss.

Fidelity insurance should be considered when one or more employees are entrusted with handling cash or other valuable assets. This policy can be taken out to cover the dishonest acts of all employees in general or can be taken out to cover specific employees i.e. those that are permitted to handle cash and other assets.The dishonest or fraudulent acts of employees can differ from company to company but may include one or more of the following:

• Theft of cash or other assets
• Diverting cheques
• Overstated billings
• Misuse of company assets
• Fabricating invoices
• Forgery of cheques or other financial instruments
• Credit card fraud

Companies can carry out certain checks on potential employees and have stringent recruitment processes in place, however, employee dishonesty will never be eradicated. Having the appropriate Fidelity insurance in place will reduce this risk dramatically.