Fidelity Guarantee & Money Insurance

Fidelity guarantee pays for money or stock you lose through fraud, forgery, embezzlement or theft by your own employees. You can insure named people, named positions such as cashiers and storekeepers, or all staff. The dishonest act must happen while the policy is in force and be discovered within a set period, typically six to 12 months after the employee leaves or the policy ends.

Money insurance covers cash and cheques lost through theft, robbery or hold-up while in transit to or from the bank, on your premises during business hours, in a locked safe or strongroom after hours, and with authorised staff. Most wordings also pay for damage to the safe. It is priced on your estimated annual cash carried, about 0.1% of it, with a minimum of around KES 3,000.

Theft is only covered where entry to or exit from the premises was forcible and violent; theft by staff is excluded. Insurers also set security conditions, which can include a watchman or guard outside working hours, grilles and strong locks, an alarm with a maintenance contract, a locked safe and proper stock books. Breaking a warranty can void a claim, so read them before you sign.

You need the claim form, a police abstract (report within 24 hours), photos showing the forced entry, a list of stolen items with invoices or replacement quotations, stock and sales records from before the loss, and a statement from your guard, watchman, alarm company or witnesses. Burglary cover pays only where entry or exit was forcible and violent; theft by your own staff needs fidelity guarantee cover.

The common reasons are under-insurance (the average clause cuts the claim in proportion), theft without forcible and violent entry, riot or political-violence damage when that extension was not bought, late notification, wrong or missing information on the proposal form, breaking a security warranty, and losses the policy excludes. Most can be avoided by insuring at true values and reading the warranties.

An SME package (also called a business combined or office package) puts several covers into one policy with one premium and one renewal date. Fire and perils is usually the compulsory core; you then choose sections such as burglary, money, all risks, public liability, WIBA, goods in transit, fidelity guarantee and business interruption. Each section has its own sum insured or limit, so you insure only what your business actually has.

Published minimum premiums for SME packages start at about KES 10,000 a year, and market estimates put a small office from about KES 20,000, a shop from about KES 25,000 and a restaurant from about KES 45,000 a year, before levies. Your price depends on what you insure and its value, your trade, location, construction, security and claims history. Statutory levies and stamp duty are added on top.

The biggest factors are what you insure and its value, your trade (a factory costs more than an office), the building's construction (stone or block is cheaper than timber), the location and neighbouring risks, your security and fire protection, the limits and excesses you choose, the number of staff and payroll for WIBA, and your claims history. Extras such as riot and political-violence cover add to the premium.