Fidelity Claims May Spark Suits In Wake Of Collapse

Law360, New York (March 20, 2009, 12:00 AM EDT) -- Insurance litigation is expected to rise amid the financial crisis as companies dispute coverage related to fraud or misrepresentation with their insurers, mostly under directors and officers or errors and omissions policies. But another insurance product, directed at employee theft – fidelity bonds – could also come into play.

Fidelity bonds, which can generally be used for direct losses from intentional employee dishonesty, are being called upon to provide coverage in connection with various forms of financial fraud and Ponzi schemes that have surfaced in the...
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