Page 151 - Misc Ebook IC 78

Miscellaneous Insurance

(vi) Excess floating policy - This is a combination of
collective policy and a floating policy. An employer may
safeguard himself against the unseen loss by having a
floating guarantee for any loss in excess of the individual
amounts set out in the schedule.

Q7.b) What is the meaning of discovery period in
fidelity guarantee insurance? Why is it made
applicable?

Ans. Unlike other policies, fidelity guarantee policies
stipulate the time limit for discovery of losses. This is
so because the loss can occur over a long period without
discovery. Investigation of such losses would be
troublesome and recovery becomes legally and
practically difficult, if not impossible.

The customary time limit provided is the act should not
be discovered later than 12 months after the resignation,
dismissal, retirement or death of the employee, or nit
later than 12 months after the termination of the policy,
whichever be the earlier.

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