In order to broaden the bond's coverage to reimburse trading losses arising from employee dishonesty, forgery of certain instruments, or certain forged or counterfeited securities, for a higher premium, insureds can obtain a
fidelity bond that deletes the trading loss exclusion from the policy in connection with these types of perils by:
The
fidelity bond issued to Sperry from CUMIS was identical to the CUMIS Form 500 bond that was issued to the 26 credit unions that were also defrauded by CUN/ USM, according to Sperry's complaint.
Under collateral source rule, wrongdoers are not entitled to credit for amounts received by insured under
fidelity bond.
Non-standard fidelity risks are OK, as are special
fidelity bond manuscripted for particular clients.
However, because CUMIS'
fidelity bond has a $5 million coverage limit, the amount of money in dispute would be less than 7% of that figure, said Phil Tschudy, a CUNA Mutual spokesman.
Centennial Insurance Co.(19) the assignee of two insured companies sought recovery under a
fidelity bond for losses sustained as a result of the fraudulent acts of John Panagako.
Co., et al., and in it the plaintiff alleged wrongful denial of $20 million owed under
fidelity bond policies issued by Liberty, Zurich American Insurance Co., Axis Insurance Co.
in a case involving a wrongful denial of a
fidelity bond claim.
In Matter of World Hospitality Ltd.(16) the insured's bankruptcy trustee sought recovery under a
fidelity bond for losses caused by the insured's president, Kenneth Wohl, who appropriated some of the insured's assets for his personal use.
"Most, if not all,
fidelity bond policies have a termination of coverage condition that terminates coverage under the
fidelity bond for individuals who have committed known dishonest acts.
