Section 11.57 Acts or Conduct Covered

• Library: Insurance Practice 2015

Fidelity bonds normally specify losses resulting from fraudulent or dishonest acts. These bonds afford broader coverage than those referring to “criminal” acts or to specific acts such as forgery, theft, larceny, embezzlement, misappropriation, wrongful abstraction, or willful misapplication. 11 George J. Couch, Couch on Insurance 3d §§ 161:22, 161:29, 161:30, 161:41–161:55 (1998).

But even in the broader forms of bonds, at least some wrongful intent or moral turpitude is intended, and these fidelity bonds do not cover losses resulting from acts done innocently or negligently. World Exch. Bank v. Commercial Cas. Ins. Co., 173 N.E. 902 (N.Y. 1930); Mortgage Corp. of N.J. v. Aetna Cas. & Sur. Co., 115 A.2d 43 (N.J. 1955); Sherwood & Roberts-Kennewick, Inc. v. St. Paul Fire & Marine Ins. Co., 322 F.2d 70 (9^th Cir. 1963) (setting forth verbatim the trial court’s jury instructions); 11 Couch §§ 161:2, 161:3, 161:22, 161:40; 35A Am. Jur. 2d Fidelity Bonds and Insurance §§ 25–28 (2001). Whether a particular act is “fraudulent” or “dishonest” may be a jury question. 11 Couch § 161:32; Kerr v. Aetna Cas. & Sur. Co.,...