In Brief
Oriental Insurance appealed against a National Consumer Disputes Redressal Commission order requiring it to pay Rs. 3.46 crore on a fidelity guarantee insurance claim filed by a collateral management company. The company had stored mentha oil in warehouses that was later found to be substituted with water. The insurer argued it was not liable as no specific employee was named and seals were intact. The Supreme Court held that a fidelity guarantee policy covers losses from breach of employee honesty and integrity. Since 100% laboratory testing confirmed the substitution and the survey report indicated employee involvement, the claim was valid. Delay in lodging the claim was justified by the time needed for proper testing. The appeal was dismissed.
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