Financial and Guarantee Insurance
The policy can be taken by employers to cover infidelity of employees who hold positions of trust like handling cash and stock.
* The policy pays for the financial loss arising out of dishonesty/fraudulent act of the employee.
* The maximum loss payable is limited to the specified limit for that employee.
* Employer has the option to choose any of the following four alternatives:
(A) Individual Policy:
Only one individual is guaranteed under this policy.
(B) Collective Policy:
Under this option, entire staff or number of selected people are covered. The policy is issued showing the names of the employees covered along with their limits.
(C) Floating policy or Floater:
This is an extension of collective policy where sum insured is specified for the whole group rather than for each individual. The names of the group members along with their designation is attached as schedule to the policy. Each claim reduces the sum insured and has to be reinstated by paying extra premium.
(D) Position Policy:
The policy schedule contains ” Positions” rather than the names of individuals, with the sum insured specified for each position. The liability is limited to the amount of sum insured specified against position irrespective of number of people working in that position.
The policy does not pay more than one claim in respect of liability/ loss arising out of an individual employee’s act.
The policy pays for the financial loss arising out of dishonesty/fraudulent act of employees covered under the policy.
The policy does not cover any loss:
* Arising out of suppression of fact affecting the risk at the time of effecting the policy.
* Where there is any change in the circumstances or conditions of the said employment and the same is not communicated to the insurer.
* For more than one claim in respect of any one employee.
* Arising from non-observance or relaxation of checks and precautions.
* Committed subsequent to an earlier act of dishonesty/fraud and which had come to the notice of the insured/insured’s representatives/supervisor
* A rate of premium of between1.5% and 2.5% is charged, depending upon the limit per occurrence, the aggregate exposure, as well as the loss history/experience of the client or the industry concerned.
* Business from Commercial banks and related institutions are subject to the agreed rating pattern adopted for banks. Flexibility in rating may however arise where justifiable by experience.
Completed proposal form giving all the information as are required for proper underwriting.
Download proposal form
Historically, banks have usually provided bonds. A bond is not an insurance policy per se but essentially a form of financial guarantee. It is a guarantee by one party (the surety or guarantor) to another party (the person requesting for the bond) that a third party (the person/company applying for the bond) will meet its contractual obligations.
NIC can provide the following types of bonds (guarantees):
* Performance Bond
* Advance Payment Bond
* Bid/Proposal Bond
* Shares Indemnification Bond
* Customs Bond
Prior to providing the guarantee, some basic documentation are usually required by the guarantor to enable assessment of the bond request.
These include but are not limited to the following:
* Completed Bond Proposal Form
* Certificate of Incorporation/Registration
* Letter of Contract Award
* Contract Agreement
* 3 Years Audited Statement of Account
* Evidence of previous Contract Performance (Certificate of Completed Jobs)
* Counter Indemnity by the Company
* Personal Indemnity by a Director of the Company
* In the case of Customs Bond the Bond form provided by the Custom & Excise department must be made available
* Similarly, Shares Indemnification Forms from the Company also to be provided in respect of shares indemnification bond
* Collateral Security up to a minimum value of the bond is required.