A fidelity or commercial dishonesty bond, also known as employee dishonesty provides coverage when an employee steals money, equipment, or other assets from you or one of your clients. Most insurance policies exclude coverage for intentional wrongful acts, and employee theft would be considered intentional. Coverage is tailored to the type of business you own and when written correctly will protect both the business and its clients or customers. While called a “bond,” these are actually insurance policies.
First-party and third-party fidelity bonds
There are two types of dishonesty bonds, first-part and third-party. First-party bonds protect businesses and companies against intentionally wrongful acts, for example: fraud, forgery, theft, etc., which is committed by employees of that business. Third-party bonds protect a business against wrongful acts committed by people working for the business on a contract basis, for example: consultants or independent contractors. Simply, first-party covers your property and third-party applies to your clients’ property. Fidelity bonds are different from other types of crime insurance, burglary, fire, general theft, disappearance, etc.
Types of fidelity bonds
- Business services bonds – provides protection for the loss of a customer’s money, equipment, supplies, and personal belongings caused by the intentional dishonest acts of your employees while on the customer’s premises. This is a good solution for businesses like janitorial services, contractors, pet or house sitters.
- Employee dishonesty bonds – protects your business from financial loss due to intentional fraudulent activities of an employee or group of employees including theft of money, securities, office equipment. This is a good solution for non-profits and professional services businesses (accountants, dentists, doctors, etc.)
- ERISA bonds – protects participants and beneficiaries from dishonest acts of a fiduciary who handles employee benefits, pension plans and 401(k)s and is required by the Employee Retirement Income Security Act of 1974.
Call us today
The knowledgeable and experienced commercial insurance professionals at Linda A Christ Insurance Agency are ready to tailor a fidelity bond that fits your business’ specific needs. Call us to schedule an appointment. We are happy to review your current policy and make suggestions to limit your exposure.