SURETY SOLUTIONS BLOG

What Is A Fidelity Bond?

By Duke Revard on Aug 29, 2014 2:05:00 PM in

Fidelity Bonds

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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.

 

Short on time? Get a Fidelity Bond with our  Interactive Fidelity Bond Application

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.

 

Get a Fidelity Bond

 

 

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
  • Partners
  • Directors
  • Members
  • Trustees
  • 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:

  • Brokerages
  • Cash carriers
  • Messenger/courier services
  • Restraunts/bars
  • Boutiques/shops
  • 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.

 

Related links:

Three Reasons Your Company Might Need A Fidelity Bond

Surety Bond FAQ