Fidelity Guarantee Insurance - (Sample AAB)

FIDELITY GUARANTEE POLICY

WHEREAS the Employer has applied to PT xxx(hereinafter called the Company) to enter into this Guarantee to the Company a document described as the Employer’s Statement which Statement and the declaration contained therein and any other written statements made by the Employer relating to the Guarantee shall be the basis of this contract and incorporated herein and has paid or agreed to pay the Premium for such Guarantee.

NOW THIS AGREEMENT WITHNESSTH subject to the Terms and Conditions contained herein or endorsed hereon that if during any Period of Guarantee the Employer shall suffer a pecuniary loss directly caused by the fraud or dishonesty of the Employee named or otherwise described in the Schedule committed during the currency of this Policy and in the uninterrupted service of the Employee with the Employer the Company shall indemnity the Employer against such pecuniary loss.

PROVIDED ALWAYS

1.    That the liability of the Company shall not exceed :

a)    in respect of any employee the amount stated against his name or description

b)    in respect of all claims under this Policy the Limit of Guarantee.

2.    that the loss is discovered and notified to the Company within six months of being committed.

IN WITHNESS WHEREOF the undersigned acting on behalf of and under the authority of the Company that hereunto set his hand.

CONDITIONS

1.    This Agreement and the Schedule shall be read together, and any word or expression to which a specific meaning has been attached in any part of this Agreement or of the Schedule shall bear such meaning wherever it may appear.

2.    Upon discovery of any act or acts of fraud or dishonesty likely to give rise to a claim or of reasonable cause for suspicion thereof the Employer shall forthwith give notice thereof in writing to the Company and this Policy shall cease to apply in respect of the Employee concerned as from the time of discovery of the act or acts of fraud or dishonesty or cause for suspicion.

3.    The system of supervision specified in the Employee’s Statement shall be strictly followed except to the extent that any variation shall have been submitted to and approved by the Company.

4.    The Employee shall deliver to the Company within three months of the discovery of any act or acts of fraud or dishonesty a claim in writing for the loss containing as particular an account of the loss as may be reasonable practicable and stating the amount thereof and shall give to the Company all such further particulars information proofs and explanations as may be reasonable required. Not more than one claim on account of the same Employee shall be made hereunder.

5.    The Employer shall on request from the Company use all diligence in persecuting the Employee for any theft, misappropriation, embezzlement or fraud committed by the Employee and shall give all information and assistance to enable the Company to sue in the name of the Employer and obtain reimbursement from the Employee or his estate or by any other person of any moneys which the Company has paid or become liable to pay.

6.    Any salary or commission or any other money which but for the theft, misappropriation, embezzlement or fraud would be due from the Employer shall be deducted from the amount for which the Company would otherwise be liable.

7.    If at the time any claim arises under this Agreement there shall be any other Guarantee covering the same loss or the Employer holds any security against loss covered hereby the Company shall not be liable to pay or contribute more than its rateable proportion of any such claim.

8.    This Policy may be cancelled at any time at the request of the Employer in writing to the Company and the premium hereon shall be adjusted on the basis of the Company receiving or retaining the customary short-term premium or minimum premium. The Policy may also be cancelled by the Company by seven days notice given in writing to the Insured at his last known address, and the premium hereon shall be adjusted on the basis of the Company receiving or retaining prorata premium.

9.    Any condition or provision contained in this Policy notwithstanding, it is understood and agreed that all disputes resulting from the performance and/or interpretation of this agreement of Insurance are to be submitted to three Arbitrators whose award shall be final and/or binding. The party desiring to submit a case to arbitration must give the other party notice of his intention in writing. The three Arbitrators shall be appointed by both parties by mutual agreement. If within four weeks from the date of such written notice the parties are unable to agree on the selection of the Arbitrators, the most ready party may request the Chairman or in his absence the acting Chairmen of the Association of Insurance Companies in Indonesia, to nominate the Authority which is to appoint the Arbitrators. The Arbitrators are bound to pronounce on the issue before them in a just and equitable manner. The Arbitrators shall determine Rules of the Arbitration Proceedings. In their final Award the Arbitrators shall disice by which party or parties the costs of the Arbitrators Proceedings, including the disbursements and the fees of the Arbitrators and the fees and disbursements of the lawyers representing the parties, shall be wholly or partially borne. The Arbitrators shall take the necessary measures in order that the original of the Award(s) shall be made. The powers to be granted to the Arbitrators shall continue until after the filling.

10.  The due observance and fulfillment of the Terms, Conditions, and Endorsements so far as they relate anything to be done or complied with by the Employer and the truth of the Employer’s Statement and the other statements referred to shall be conditions precedent to any liability of the Company to make any payment under this Agreement.

SPECIAL CONDITIONS

FOR FIDELITY GUARANTEE INSURANCE

1.    Reduction of liability :

Every claim paid hereunder reduces the amount of guarantee by the sum so paid, unless the same is reinstated by payment of additional premium thereon.

2.    Cancellation as to any Employee :

This guarantee shall be deemed cancelled as to any Employee immediately upon discovery by the Insured or by any partner or officer thereof not in collusion with such Employee, of any fraudulent or dishonest act on the part of such Employee.

3.    Prior fraud or dishonesty :

The Company shall not be liable under this Policy for any loss arising from the act or acts of fraud or dishonesty of the Employee committed prior to the commencement date of this Policy.

4.    Exclusions :

This Policy does not ever:

a)    1. Any loss due to Riot on Civil Commotion, Military, Naval or usurped power, War or insurrection or

2. Any loss due to hurricane, cyclone, tornado, earthquake, volcanic eruption or similar disturbance of nature, or

3. Any loss due to nuclear reaction, radiation or radioactive contamination.

b)    Any loss resulting from any act or acts of any Director of the Assured other than one employed as a salaried, pensioned or alected official or an Employee of the Assured, except when performing acts coming within the scope the usual duties of an Employee, or while acting as a member of any committee duly elected or appointed by resolution of the board of Directors of the Assured to performing specific, as distinguished from general, directorial acts on behalf of the Assured.

c)    Any loss caused by any fraud or dishonesty committee by any Employees who have been employed under one year counting from the date of employment specified in the Schedule at the time of such acts.

5.    Subrogation :

The person effective the insurance or the Insured shall take such measures as may be necessary for preserving and exercising the right of the recourse against Third Parties to which the Company becomes subrogated by indemnification of loss damage, and shall furnish the Company with all the evidence and documents as may required by the Company. The necessary expenses for such procedures shall be borne by the Company.