Fidelity and Guarantee Insurance Law and Legal Definition

Fidelity and guarantee insurance is a type of insurance where the insurer agrees to indemnify an insured against a loss consequent to a dishonest or default of a designated person. In this type of insurance the insurer agrees to indemnify for a valuable consideration and also subject to certain conditions. In a fidelity and guaranty insurance contract, the insurer agrees both for insurance and suretyship. Hence, the insured has an obligation to disclose to the insurer, at the time of making the contract any known previous acts of dishonesty. Any failure on the part insured to disclose the same leads to the avoidance of the contract.