The coverage usually offered in the Colombian insurance market to cover for the risk known as “Infidelity of Employees”, that is, the risk of improper use of the Assured’s money or property by workers at the service of the Assured, is afforded pursuant to the so-called Infidelity and Financial Risks Policy or Banker’s Blanket Bond.

As a general rule, the Colombian insurance market affords said coverage for “Infidelity of Employees” to banks and other financial institutions under the abovementioned Infidelity and Financial Risk policy as per Form DHP 84, or as per Forms KFA 81 or NMA 2626.

In principle, both of the above first form and second set of forms, cover for losses as sustained by the Assured resulting from dishonest or fraudulent acts of the employees at the service of the Assured, committed either individually or in collusion with third parties with the clear intent to cause a loss to the Assured. For purposes of proving occurrence of the loss it shall be therefore demonstrated that the loss was caused by the dishonest or fraudulent act of the employee and that it was committed with the purpose, intention or aim to cause an equity loss to the Assured.

Now, when dealing with trading or credit operations, the insurers may fear ending up indemnifying under Infidelity of Employees for purely trading losses or merely wrong, negligent or even irresponsible actions of employees at the service of the Assured.

Such fear has led insurers to absolutely exclude from coverage under the DHP 84 Form any losses originated in trading operations and under the KFA 81 and NMA 2626 Forms to demand, when dealing with trading or credit operations, proof of profiteering by the dishonest or defrauding employee.

The present dossier proposes adopting a new clause covering for “Infidelity of Employees” pursuant to which, when dealing with trading or credit operations, the proof of loss, albeit stricter than under different circumstances, does not reach a point where it becomes virtually impossible.