As requested by financial institution regulators, loyalty coverage is provided by an expanded version of the Surety Association Form 24, which was revised until January 2004. Four insurance policies include “basic” coverage: a loyalty loan is a form of insurance coverage that covers policyholders for losses incurred by fraudulent acts of certain individuals. It insures a business generally for losses caused by the dishonest actions of its employees. Although they are called “obligations,” loyalty obligations are in fact a form of insurance. They are generally referred to as first or third parties. The loyalty obligations of the first parties are strategies that protect companies from the illegitimate actions of employees, while the loyalty obligations of third parties protect companies from the similar actions of persons under contract. Thus, despite its name, a loyalty loan is exclusively an insurance and is non-negotiable and cannot create interest like a normal loan. It is also known as “honesty.” In Australia, a loyalty loan is called “employee dishonesty insurance” and in Britain it is called “loyalty guarantee insurance.” Loyalty bonds are most often held by insurance companies, banks and brokerage firms, which are specifically required to protect in proportion to their net capital. Possible forms of loss include fraudulent trafficking, theft and counterfeiting. Specialized forms of loyalty obligations may cover specific cases, such as . B employees who commit fraud or illegal acts while providing services to customers. If z.B. a window repair worker is sent to a house damaged by a storm and steals jewelry from the apartment, the company may be noticed by the employee`s actions.

Similarly, if a dog keeper used his or her access to a client at home to steal money, or if a home health service provider took a client`s clothing or laptop, a faithful link, tailored to such circumstances, could cover his or her needs at the business. Loyalty obligations can be considered part of the company`s approach to corporate risk management. Such an insurance policy is a kind of protection if the company suffers losses caused by fraudulent or criminal actions against the company or its customers.