Page 60 - Misc Ebook IC 78

The Insurance Times

Q3. Distinguish between Commercial Fidelity
Guarantee Insurance and the Court Bonds.

Ans. There are several differences between
Commercial Fidelity Guarantees and Court Bonds.
They are :
(i) Commercial guarantees are simple contracts
whereas court bonds are speciality contracts
executed under seal.

(ii) The proposal made by the employer is the basis of
a commercial guarantee, and is deemed to be
incorporated in the policy, so any misrepresentation
or inaccuracy in the proposal can make the policy
void or voidable. In Court bonds, the proposal does
not form part of the contract, and hence the contract
is not affected even if the proposal contains
inaccurate material information.

(iii) The commercial guarantee is subject to some
conditions, the breach of which may render the
policy void or voidable. Court bond has no such
conditions incorporated in it.

(iv) To get a claim under a commercial guarantee, the

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