Meaning of guarantee insurance.
A guarantee insurance is a type of insurance contract where the insurer agrees to indemnify the insured for a fixed sum against losses through fraud, dishonesty and breach of contract by a third party. The most important feature of this contract states that the insurer stands as a surety against the action of a third party. The bright examples of guarantee insurance contracts are credit insurance and fidelity insurance.
The former insurance contract protects the traders against the loss on account of insolvency of the debtors. Fidelity insurance is made by employer to provide against financial losses on account of defalcation of the employees.