In Brief
Oriental Insurance refused to indemnify National Bulk Handling Corporation under a fidelity guarantee policy when mentha oil cargo was found substituted with water, allegedly due to employee dishonesty. The insured promptly undertook 100% sampling and reported findings to the insurer. The Supreme Court held that fidelity guarantee insurance protects against losses from employee dishonesty and breach of trust. The insured's swift investigation and reporting did not breach policy conditions. The Court affirmed that employee involvement in the product substitution was clear and fell squarely within the policy's ambit. Appeal dismissed.
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