San Francisco Fidelity Bond Claims Lawyers
California Employee Dishonesty Claims Attorneys
Fidelity bonds — also known as employee dishonesty insurance policies — are intended to protect businesses from employee theft and wrongdoing. Employee dishonesty coverage is quite expensive, but many companies consider it worthwhile because the damage that can be done to a business by employee embezzlement, theft of trade secrets, or theft of customer funds or property can put a company out of business.
Unfortunately, if your company purchases a fidelity policy and then experiences an incident of employee dishonesty, you may find that your insurance investment is as much of a loss as the employee theft. The chance that your insurer will pay on an employee dishonesty claim, without going to court, is slim. Typically, these policies contain numerous exclusions that insurers often rely on to deny coverage. But an insurer denial letter is not the end of the story.
At Pillsbury & Levinson, LLP, our San Francisco fidelity claim attorneys represent businesses of all kinds as they seek to recover money from their fidelity policies for employee wrongdoing. We will review your policy, explain the coverage requirements and exclusions, and advise you on the most appropriate and most cost-effective step to take.
The Challenge of Proving a Dishonesty Claim
The burden of proof is on the insured to establish that the dishonest employee:
- Had "manifest intent" to steal
- Was stealing for the purpose of obtaining financial benefit, and
- Intended to cause the employer direct loss.
You can see already the challenge this presents, and how it may leave employers on the hook for significant losses. Did a hotel employee steal a guest's jewelry from the hotel safe? Did the stockbroker misuse a client's funds? This is not considered a direct loss to the employer and therefore the employer cannot seek compensation for it. The fact that this theft may lead to a future loss of business is also not considered a direct loss, either.
And what is "manifest intent?" The California 9th Circuit Court has not yet defined it, but other courts have said that "manifest intent" requires proof that the employee intended to engage in a dishonest act and was substantially certain of a particular result. In the case of broker violations of fiduciary duty can the employer prove intent to defraud or was it simply broker negligence?
At Pillsbury & Levinson, LLP, our insurance trial attorneys represent policyholders in insurance coverage disputes and insurance bad faith litigation. If we believe you have a case, we will not hesitate to take your case to court, gathering the evidence needed to prove intent and loss to a jury.
Contact our San Francisco law offices for legal advice, policy review, and trial court representation. We represent business owners with fidelity claims throughout California.