Fidelity Guarantee Insurance UK — Cover Against Employee Dishonesty

What It Covers

When Does Fidelity Guarantee Respond?

Fidelity guarantee insurance protects against a specific, uncomfortable risk: dishonesty from within your own organisation.

An employee steals cash, stock, or company property
A member of staff manipulates accounts or financial records for personal gain
An employee diverts customer payments into their own account
Payroll fraud committed by someone with access to the payroll system
Procurement fraud, such as an employee taking kickbacks from suppliers
Unauthorised use of company funds or company cards by staff

💡 Not the same as theft cover: Standard property or contents insurance typically covers theft by external parties, such as burglary. Fidelity guarantee insurance is specifically about dishonesty committed by your own employees — a different risk requiring its own cover.

How Cover Works

The "Discovery" Basis

Fidelity guarantee insurance is usually structured differently from typical liability cover, in a way that matters for how claims are assessed.

🔍

Discovery, not occurrence

Most fidelity guarantee policies respond based on when the dishonest act is discovered, rather than when it actually happened — meaning the policy in force at the point of discovery is usually the one that responds, even if the fraud began earlier.

👥

Blanket vs named cover

Blanket cover automatically includes all employees without needing to list them individually — more practical for most businesses since it doesn't require updating every time staff join or leave. Named cover only protects against specifically listed individuals.

🔐

Internal controls matter

Insurers may ask about your financial controls — segregation of duties, reconciliation processes, audit practices — since weak controls increase both the risk of fraud and the difficulty of detecting it.

⚖️

Not a substitute for proper process

Having this cover doesn't replace the need for a lawful, fair investigation and disciplinary process when dishonesty is suspected — it provides financial protection alongside, not instead of, proper HR procedure.

⚠️ Understand your discovery period: Because fraud can go undetected for a long time, check exactly how your policy defines the discovery period and what happens if you switch insurers — a gap in continuous cover could leave older, undiscovered dishonesty unprotected.

Who Needs It

Is Fidelity Guarantee Right for You?

This cover matters most wherever staff have meaningful access to cash, accounts, or company funds.

💷

Cash-handling businesses

Retail, hospitality and other businesses where staff regularly handle cash.

📊

Finance and bookkeeping staff

Any business with employees who have access to accounts, payments, or payroll systems.

🏛️

Charities and not-for-profits

Trustees are often particularly concerned about fund misuse, and this cover is commonly held alongside trustee indemnity insurance.

👤

Lone workers handling money

Businesses where individual employees work with limited oversight while handling company funds.

Choosing Cover

What to Look for in Fidelity Guarantee Cover

A few things worth checking before you buy, whichever UK insurer or broker you compare.

📋

Blanket cover as standard

Unless you have a very small, stable team, blanket cover is usually more practical than maintaining a named-employee schedule.

🔍

Discovery period clarity

Understand exactly how the discovery basis works and what happens to continuity of cover if you change insurer.

🔐

Internal control requirements

Check what financial controls the insurer expects you to have in place, since inadequate controls can affect both pricing and claims.

✅

FCA authorisation

Before buying, confirm any insurer or broker is authorised and regulated by the Financial Conduct Authority — check the register at register.fca.org.uk.

🤝 We're finalising partnerships with FCA-authorised UK insurers so you can compare real quotes here soon. Check back shortly, or get in touch if you'd like to be notified when comparisons go live.

FAQ

Frequently Asked Questions

Standard theft or property cover typically responds to loss caused by external parties, such as burglary. Fidelity guarantee insurance specifically covers dishonest acts committed by your own employees, which is a different risk entirely.

It means the policy in force when the dishonest act is discovered is generally the one that responds — not necessarily the policy that was in force when the act actually took place, which can matter if fraud goes undetected for a long time.

Only if you choose blanket cover, which automatically includes all employees. Named cover only protects against dishonesty by specifically listed individuals, and needs updating whenever staff change.

Many charities do take out this cover, often alongside trustee indemnity insurance, given trustees' particular concern about protecting charitable funds from internal misuse.

No — this cover provides financial protection, but you still need to follow a lawful, fair disciplinary and investigation process when dishonesty is suspected, just as with any other employment matter.

Common examples include segregation of duties (so no single person controls an entire financial process), regular reconciliation of accounts, and routine audit checks — weaker controls can affect both the cost of cover and how claims are assessed.

Related Guides

More Commercial Insurance Guides

Explore related cover types in our commercial insurance knowledge base.

Fidelity Guarantee Insurance — Cover Against Your Own Staff

Get a Quick Quote