Investment Advisors - Employee Dishonesty

The difference between Employee Dishonesty coverage for Investment Professionals from standard Employee Dishonesty is the inclusion of coverage for the acceptance, and action on, client investments where the client investment is fraudulent.

There are two Employee Dishonesty Bonds for financial institutions distinguished by class of business:

Financial Institute Bond Form 14

Financial Institute Bond Form 15

• Finance Companies

• Small loan Companies

• Mortgage Brokers

• Title Insurance Companies

• Holding Companies

• Real Estate Investment Trusts

Each bond provides coverage for loss of property that is caused by the dishonesty of employees and crimes of others (non-employees).

The bond is broken down into six assuring agreements:

Insuring Agreement A- Fidelity

Coverage is provided for loss involving any dishonest or fraudulent act of any employee.  Such loss is covered no matter where it is committed and whether it occurs alone or in collusion.

Insuring Agreement B- On Premises

Agreement B responds to loss that occurs on an insured’s premises, from robbery, burglary, larceny, theft, false pretenses, misplacement or mysterious disappearance, damage or destruction.

Insuring Agreement C- In transit

This coverage is similar to Insuring Agreement B while the property is in transit, custody of a messenger or armored car.

Insuring agreement D-Forgery or Alteration, Optional coverage

This optional provision covers loss resulting from forgery or alteration of any negotiable instrument, except registered or bearer bonds.

Insuring agreement E- Securities Optional Coverage

This provision handles a loss that occurs because in good faith, the insured for his or her own account, or others has acquired, sold or delivered, or has given value extended credit or assumed liability on the faith of an original; certified security; document of title; deed, mortgage or other instrument conveying title to, or creating or discharging a lien on real property ; certificate of origin or title; evidence of debt; corporate, partnership or personal guarantee; security agreement; based on the forged signature of any maker, drawer, issuer, endorser, assignor, lessee, transfer agent, register, acceptor, guarantor; or that has been altered; or lost or stolen.

Insuring Agreement F- Counterfeit Currency

This agreement provides coverage for loss that results from the insured’s receiving counterfeit money of the United States, Canada or any other country where the insured maintains a branch.

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