This article, about a Sixth Circuit court ruling involving fidelity policies, quotes insurance partner David Klein.
Klein, who represents policyholders, pointed out that fidelity coverage is typically designed to cover an insured's own losses from an employee's dishonesty instead of claims paid out to third parties. But the, decision shows policyholders can suffer the "direct loss" required under fidelity policies when an employee steals property they have been entrusted with, he said.
"This case could be cited not only in circumstances where the exact policy language is at issue, but also for the more general proposition that notwithstanding the name 'fidelity,' policies may well cover a broader class of losses," Klein said.
He continued, "The dissent in this instance puts a lot of emphasis on the purpose for which the fidelity policies were written and certain ideas about where fidelity policies normally fit in the context of insurance. Everything it says about what is normally the case is fundamentally correct, but the majority put a great more deal of emphasis on what the policy actually says and of course, what the policy actually says governs."