Fidelity Guarantee Cover provides indemnity should you suffer theft of money or goods by an employee, subject to the terms and limits of your individual policy. Since the economic downturn we have seen the number of Fidelity Guarantee claims increase sharply from various areas within the late night leisure and hospitality industry.
One of the main conditions of a Fidelity Guarantee policy is that you obtain references for all your employees. The following extract is a sample from a typical policy:
- a) The insured shall obtain satisfactory references to confirm the honesty of each employee who will be responsible for money goods accounts computer operations or computer programming engaged after commencement of this policy.
- b) Such references shall be obtained directly from former employers for the three (3) years immediately preceding engagement and before the employee is entrusted without supervision.
- c) References need not be obtained in respect of employees who have satisfactorily and continuously served the insured for at least one (1) year in another capacity before being entrusted with the duties referred to above.
- d) In respect of employees joining directly from school or government sponsored youth training schemes one (1) character reference shall be obtained.
- e) A written record of any verbal reference shall be made at the time it is obtained.
- f) The original copy of each written reference and the record of any verbal reference shall be retained by the insured and made available for inspection by the insurer on request.
If you have not fully complied with the reference condition then it is unlikely that your claim will be met.
Many of the incidents that have been reported recently, have involved staff members who it later transpired had previous history with previous employers for similar crimes. If the venue had followed up the references when the employees were first taken on, then they could have avoided any subsequent distress. Some venues lost tens of thousands of pounds, money which they could ill afford to lose and had no insurance cover without references.
Insurers also insist that money is banked regularly, receipts are reconciled with bank statements and cheques over a certain limit are signed by more than one person. An independent stock take should take place and some policies even insist that all employees who have any responsibility for money or stock, take two weeks uninterrupted holiday each year. All these measures are designed to prevent theft but also if a crime has been committed, it can be identified immediately.
Be sure to read your policy wording and if you have any concerns that you cannot comply with the conditions then take the necessary action now – it might save you a lot of heartache in the future.