When you hire new employees, you normally have an interview process. Sometimes you might even run a background check on potential candidates. But does this mean your business is protected from theft or fraud? No. Many companies decide to purchase a Fidelity Bond for added coverage for their business.
What is a Fidelity Bond?
A Fidelity Bond is a form of insurance that protects companies against financial loss due to employee fraud and theft.
Fidelity Bonds are also called Employee Dishonesty Bonds.
Types of Fidelity Bonds
- Business Service Bonds: Business Service Bonds protect property owners from theft that happens by service providers such as house cleaners, maintenance workers, pet sitters, landscapers, etc.
- Commercial Crime Fidelity Bond: These Fidelity Bonds protect businesses from book-keepers or employees directly responsible for handling the money in a business. The coverage protects businesses in the event that an employee should embezzle money.
- ERISA Bonds: An ERISA Bond protects participants and beneficiaries from dishonest acts of a fiduciary who handles employee benefit or pension plans, including 401(k)s. This bond is the only Fidelity Bond required by law.
How Much Does a Fidelity Bond cost?
Fidelity Bonds are quite inexpensive considering they cover so much. For example, a business who wants $100,000 in coverage can secure a Fidelity Bond for around $300-$400 a year. Many policies cover up to $500,000 in losses without significant premium increases.
At Surety Solutions, we can get you a Fidelity Bond for your business today. Give us a call at 866-722-9239 or use our interactive application by clicking below.
Who is Covered by a Fidelity Bond?
Fidelity Bonds are considered to be ‘blanket bonds’ which means they cover all of the employees in a given business. The specifics of coverage are detailed in each policy, but generally, a Fidelity Bond covers the following people:
- Current and former employees
- Seasonal/temp employees
Who Needs a Fidelity Bond?
All businesses should consider purchasing a Fidelity Bond for added protection, but the following companies are particularly at risk:
- Cash carriers
- Messenger/courier services
- In-home service provides (nursing care, pet sitting, house cleaning, etc)
In short, a Fidelity Bond should be considered when you wish to protect your business from theft by your employees, or when you wish to protect your customers from theft by your employees.