- Scenario 1: The Insured has its employee arrested for theft
Mostly, there is cover if an employee was wrongfully arrested and sued the Insured. This extension does not draw a distinction between employees and visitors, customers etc.
- The policy does exclude claims arising out of employee dishonesty, but presumably the arrest would not be wrongful if the employee had been dishonest.
- Scenario 2: The Insured’s employee is sued
The definition of the Insured includes the Insured’s employees while performing their duties. This applies at a policy-wide level.
This means that if an employee was sued in their personal capacity by someone wrongfully arrested by the Insured, then there is cover.