The Date of Discovery in a Fidelity Policy

By Rehana Moosa

When preparing a fidelity / crime insurance claim, it is important to determine what is known as the “date of discovery”.

 

What is the “date of discovery”?

 

The date of discovery is the date the insured becomes aware of facts that would cause a reasonable person to believe a covered loss has occurred or will occur. 

 

The insured does not need to know the amount of the loss or the exact circumstances as of this date, only that an employee theft has or may have taken place.

 

Why is the date of discovery important?

 

The date of discovery represents the end date of the losses that will be covered under the fidelity / crime policy.  In other words, any losses that occur after this date are not covered.

 

How do you determine the date of discovery?

 

In many cases, identifying the date of discovery is straightforward.  The insured receives a detailed and credible anonymous tip, or discovers forged documents, or the suspect employee realizes that detection is imminent and decides to confess.  However, in other cases, it is less clear.

 

In situations where it is difficult to identify an exact date, a detailed chronology of events can be prepared and reviewed with the insurer.  The timeline can include:

 

• The date the insured first became aware that an employee theft may have occurred, including the source of this information
• The specific steps taken by the insured to investigate the allegations, and the relevant dates
• The dates of any interviews conducted with the suspect employee and / or other individuals who had knowledge of the allegations
• The dates that specific documents were obtained and reviewed to substantiate or refute the allegations
• The dates of any confessions given by the suspect employee, if applicable
• The date the police were notified, if applicable
• The date the suspect employee was placed on a leave of absence, resigned, or was terminated
• Any other dates relevant to the investigation of the alleged employee theft

 

Contact us to learn more.   647-426-0146  |  rehana@rmforensics.ca

Communications are intended for informational purposes only and do not constitute legal advice or an opinion on any issue. For permission to republish this content, please contact Rehana Moosa Forensic Accounting Professional Corporation.

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