| Upon notification of the loss blank poof of loss forms should be furnished to the insured (obligee) immediately. Suggested language for the transmittal letter is provided. |
| Begin investigation as soon as possible. Do not wait for the return of the proof of loss. |
| It is preferable to begin the investigation with an
interview of the insured. An interview at the location of the loss is usually desirable. Physical evidence should be inspected and secured. |
| If the insured has filed a police report, have the insured furnish a copy of the report and any other information the police have given to the insured. |
| After the interview of the insured and the on-site inspection, the principal must be located and interviewed. Care must be taken to make no accusations or render any opinions. |
| This is the opportunity for the principal to defend himself, by giving his side of the story. The principal and the surety are similarly situated. They each have a liability for any of the principal's wrongful acts. Every effort should be made to obtain a complete and honest statement about the loss from the principal. If the charges made by the insured are disputed by the principal, then this should be set forth in a statement. |
| In matters of dispute between the insured and principal, attempt to mediate a resolution of the misunderstanding. The surety is a neutral party in such a dispute. |
| Examine the completed and notarized proof of loss. |
Determine that there are no coverage issues
by affiramtively answering each of the following questions:
Has the insured sustained a loss of money or other property?
Did the loss result from the dishonesty of an employee?
Note:The employee may not be identifiable, but loss must
be due to dishonesty. (If there is no dishonesty,
check the existence of broad form money and securities
coverage under which a mysterious disappearance of money or securities
may be covered if not caused by dishonesty.)
Was the loss sustained, discovered and reported within the terms of the bond?
Note: A bond will have one of two possible triggers--
when the loss is sustained or when it is discovered.,
Loss-sustained bonds usually contain a discovery period.
Also, continuously renewed loss-sustained bonds are likely
to provide coverage for previously undiscovered losses.
Do the books and records of the insured verify the amount claimed?
|
|
Proceed with recovery by obtaining assets or promissory note from principal.
|
Investigate subrogation potential from negligent third parties such as financial institutions
(e.g., for honoring forged endorsements).
|
