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Fidelity Coverage Analysis Analysis of a fidelity claim will vary depending on whether it covers employee dishonesty or employee theft and based on the circumstances surrounding the fraudulent scheme perpetrated by the employee. 3d 512, 518 (D.N.J. 2015) (holding that kickbacks an employee received from a colluding vendor satisfied the employee theft insuring agreement but that padded amounts paid to the vendor for legitimate services due to the employee misconduct were not covered). Further, identifying the steps in the employee's scheme is necessary to determine whether a loss results directly from employee dishonesty or employee theft. However, issues can arise where a defalcating employee is involved in a kickback scheme containing a mix of legitimate and illegitimate services.24 Query what an insured loses if an employee retains a vendor that renders legitimate services to the insured at a fair price but pays a kickback to the employee for the procurement of the service contract. [Extracted from the article]