The Meaning of “Manifest Intent” in the Context of a Fidelity Bond Insuring the Employer Against Dishonest Acts by an Employee Explained

The First Department explained what the term “manifest intent” means as the term appeared in a fidelity bond which insured the employer from dishonest acts by an employee. The coverage was triggered only when the employee acted with the “manifest intent” to cause the insured to sustain loss or to obtain financial benefit for the employee or a third party:

Manifest intent involves a continuum of conduct, ranging from embezzlement, where the employee necessarily intends to cause the employer the loss, to the other end of the continuum, which does not trigger fidelity coverage, where “the employee’s dishonesty at the expense of a third party is intended to benefit the employer, since the employee’s gain results from the employer’s gain”… .

Manifest intent to injure an employer exists as a matter of law where an employee acts with substantial certainty that his employer will ultimately bear the loss occasioned by his dishonesty and misconduct… . Keybank Natl Assn v National Union Fire Ins Co of Pittsburgh PA, 2015 NY Slip Op 00614, 1st Dept 1-22-15