Fidelity Guarantee Insurance

Overzicht

Every business that handles money trusts someone with it: a cashier at the till, an accountant at the ledger, a storekeeper at the warehouse. Most repay that trust. A few do not. Fidelity guarantee insurance is the cover a wise employer buys against the one who does not, protecting the firm when a trusted employee steals, embezzles or defrauds it from the inside.

In this lesson you will learn exactly what fidelity guarantee insurance covers and the dishonest acts it answers for, the four ways a policy can be arranged (individual, collective, floating and blanket), what a bond is and why it needs three parties instead of two, and the sharp line that separates this cover from an ordinary fire or motor policy: the insurer's right to chase the wrongdoer for its money back.

Doelstellingen

  1. Define fidelity guarantee insurance and explain the loss it protects against
  2. Describe the types of fidelity guarantee policy: individual, collective, floating and blanket
  3. Explain the nature and purpose of a bond
  4. Distinguish a fidelity guarantee policy from an ordinary insurance policy

Lesnotitie

A supermarket in Abuja loses stock and cash quietly, month after month, and the owner cannot see where it goes. An audit finally uncovers a trusted cashier who has been pocketing takings for a year. The loss is real, but it was not caused by fire, flood or a burglar breaking in. It was caused by someone the business had every reason to trust. An ordinary fire or theft policy will not answer for it, because those cover accidents and outsiders, not the deliberate dishonesty of the firm's own staff. The cover that does answer for it is fidelity guarantee insurance, and knowing how it works is worth secure marks in every WAEC Insurance paper.

Lesevaluatie

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  1. Fidelity guarantee insurance protects an employer against loss caused by: A. Fire damage to the business premises B. The dishonesty of an employee in a position of trust C. Burglars who break into the premises by force D. The employer's own negligence Answer: B
  2. Which of the following is NOT a type of fidelity guarantee policy? A. Individual B. Collective C. Floating D. Comprehensive Answer: D
  3. How many parties are involved in a bond? A. One B. Two C. Three D. Four Answer: C
  4. A blanket fidelity policy carries a limit of 300,000 naira per employee. A cashier is found to have stolen 450,000 naira. How much will the insurer pay? A. 450,000 naira B. 300,000 naira C. 150,000 naira D. Nothing Answer: B
  5. The feature that most clearly distinguishes a fidelity guarantee policy from an ordinary fire policy is that the fidelity insurer: A. Charges a higher premium B. Can recover what it pays from the dishonest employee C. Pays claims more quickly D. Requires no proposal form Answer: B

Aanbevolen Boeken

Principles of Risk Management and Insurance
Principles of Risk Management and Insurance
Ondertitel: Thirteenth edition
Uitgever: Pearson
Jaar: 2016
ISBN: 978-0-13-408257-8
Beschrijving: The standard introduction to risk and insurance, covering risk management, insurer operations and the main lines of life, health, property and liability cover.
Fundamentals of Risk and Insurance
Fundamentals of Risk and Insurance
Ondertitel: Tenth edition
Uitgever: Wiley
Jaar: 2008
ISBN: 978-0-470-08753-4
Beschrijving: A clear account of the nature of risk and the economics of insurance, written for beginning students across life, health, property and liability insurance.
Fundamentals of Insurance
Fundamentals of Insurance
Ondertitel: Second edition
Uitgever: Himalaya Publishing House
Jaar: 2017
ISBN: 978-93-5097-079-9
Beschrijving: An accessible treatment of insurance in four parts: the basics of risk, insurance management, life insurance and non-life insurance.

Eerdere Vragen

Benieuwd hoe eerdere vragen over dit onderwerp eruitzien? Hier zijn een aantal vragen over Fidelity Guarantee Insurance van voorgaande jaren.

WAEC SSCE - Insurance - 2018

Vraag 1 Verslag

(a) Explain a fidelity guarantee insurance policy.

(b) List and explain the four types of policies in fidelity guarantee insurance. 
 

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