Types of Fidelity Bonds Insurance for Business Owners

As a business owner, you're likely aware of the importance of protecting your company from potential losses. Fidelity bonds insurance can provide this protection, and there are several types to consider.

For employees who handle cash or other valuables, a cashier's bond is a good option. This type of bond covers losses due to theft or dishonesty by employees.

If you have employees who work with confidential information, a fidelity bond for confidential information is worth considering. This type of bond protects your business from losses due to the unauthorized disclosure of confidential information.

A surety bond for employees with access to company assets is also a good idea. This type of bond covers losses due to theft or misuse of company assets.

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A fidelity bond is a type of insurance that protects plan assets from fraudulent and dishonest acts committed by fiduciaries, as stated in the ERISA fidelity bond section.

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It's essentially a safeguard for the plan itself, not the individuals responsible for managing it. This means that if a fiduciary makes an honest mistake that results in plan losses, the ERISA fidelity bond won't cover those losses.

ERISA fidelity bonds specifically protect against acts of fraud or dishonesty, so if a fiduciary is found to have committed such an act, the bond will kick in to cover the losses.

In contrast, commercial crime insurance offers more comprehensive coverage against a wide range of business-related crimes, including employee theft, forgery, and robbery.

Here are some examples of the types of crimes that commercial crime insurance can cover:

Fidelity bonds are a type of insurance that protects businesses against losses caused by employee dishonesty or theft. They can be customized to fit the specific needs of a business, covering various types of risks.

There are several types of fidelity bonds, including business services bonds, employee dishonesty bonds, and ERISA bonds. Business services bonds protect clients when employees visit their premises, while employee dishonesty bonds protect companies and their clients from employee theft or misuse of financial information. ERISA bonds, on the other hand, are required for companies with pension plans, protecting plan assets from fraudulent or dishonest acts.

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Some examples of fidelity bonds include:

These are just a few examples of the many types of fidelity bonds available. By choosing the right type of fidelity bond, businesses can protect themselves against a range of potential risks and ensure the integrity of their operations.

A fidelity bond clearly spells out how much reimbursement would be provided after fraudulent behavior occurs. This reimbursement amount is a key detail to review when purchasing a bond.

You can choose to cover specific employees or job positions with a schedule fidelity bond. A schedule bond provides specific coverage for each job position or individual employee listed in the policy.

A blanket bond offers the same amount of coverage for all employees. This type of bond is a good option if you want to cover all employees under one policy.

If you need to file a claim, follow the rules set by the company that sold you the bond. This typically involves explaining what happened and why you're filing a claim.

You'll likely be asked to furnish important documentation that supports the claim, such as a police report. This documentation is crucial to the claims process.

There are several types of fidelity bonds insurance, each designed to protect businesses from specific types of employee-related crimes. Business services bonds protect clients from theft and dishonest acts committed by employees, while employee dishonesty bonds protect companies and their clients from employee misuse of financial or personal data.

ERISA bonds are required for companies with pension plans, covering losses due to fiduciary mismanagement. Non-profit organization bonds protect non-profit employees from fraudulent and dishonest acts. Standard employee dishonesty bonds cover employee fraudulent behavior that costs the company money.

A schedule fidelity bond covers specific employees or job positions, while a blanket bond offers the same coverage for all employees. A claims adjustor will be assigned to the case and will ask for additional information required to process the claim.

Fidelity bonds can be categorized into two general types: financial institution bonds and commercial crime insurance policies. Financial institution bonds are offered to financial institutions, while commercial crime insurance policies are offered to non-financial commercial entities.

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Here are some examples of fidelity bonds:

These types of fidelity bonds can provide protection against various types of employee-related crimes, including embezzlement, employee theft, forgery, and more.

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Employee dishonesty is a serious issue that affects many businesses. According to the U.S. Chamber of Commerce, three out of four employees admit to stealing from their employers at least once. This is a staggering statistic that highlights the importance of having the right insurance in place.

One type of fidelity bond that can protect businesses from employee dishonesty is an Employee Dishonesty Bond. This type of bond will cover losses resulting from fraudulent activities through which employees attempt to steal securities, money, or property from the business.

Some examples of when you may need an Employee Dishonesty Bond include: a nonprofit or accounting company, or a business with private sector employee benefit plans. In these cases, an ERISA bond can benefit the business in the event of fraud or dishonesty.

Here are some key facts about Employee Dishonesty Bonds:

Employee dishonesty is a risk that can be mitigated with the right insurance. By having an Employee Dishonesty Bond in place, businesses can protect themselves from the financial consequences of employee theft.

A surety bond, like a fidelity bond, can vary greatly in cost. Some bonds can cost as little as $50, while others may cost upwards of $10,000 or more.

The cost of a fidelity bond is mostly determined by your policy limit. A more expensive policy limit yields a higher price.

According to Insureon, 56% of customers choose fidelity bonds with a $1 million limit. This limit is also reflected in a median monthly cost of $88 and an annual cost of $1,054.

Here's a breakdown of median fidelity bond costs by policy limits, based on Insureon data:

Choosing a deductible is a crucial decision when purchasing a fidelity bond.

Deductibles can be as high as $150,000, but more common deductibles are $10,000, $25,000 and $50,000.

Choosing a higher deductible typically saves money on your fidelity bond.

Each business must weigh these savings against the risk of having a lower payout if you need to file a claim.

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The cost of a surety or fidelity bond can vary significantly depending on several factors. Some bonds can cost as little as $50, while others can cost upwards of $10,000 or more.

The type of bond and its value are key determinants of the cost. For instance, fidelity bonds for small businesses typically have a median premium of $88 per month or $1,055 per year.

The cost of a fidelity bond is also largely influenced by the policy limit. A more expensive policy limit yields a higher price. For example, a policy with a $2 million limit costs $146 per month or $1,747 per year, while a policy with a $5 million limit costs $235 per month or $2,816 per year.

Here's a breakdown of median fidelity bond costs by policy limits:

It's worth noting that 56% of Insureon customers choose fidelity bonds with a $1 million limit.

If you work for your local government, you may need to have a bond to ensure you follow laws and regulations. This is especially true for roles such as treasurer, city manager, sheriff, justice of the peace, court clerk, or notary.

Some businesses, like janitorial service providers, may be required by states to purchase fidelity bonds. Notary publics are also often required to have a notary bond.

Here are some groups that may require or benefit from fidelity bond insurance:

Public officials who work for their local city, township, borough, or state often need to have a bond.

This bond serves as a guarantee that they will follow the laws and regulations required by the government.

Some people that may need a bond include treasurers, city managers, sheriffs, justices of the peace, court clerks, or notary publics.

A bond for a notary public, for example, ensures that they will conduct their duties in accordance with the law.

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To operate a small business, you'll likely need to obtain a license, and with it, a bond. A License and Bonding for Small Business is a requirement for many entrepreneurs.

Local laws dictate the specific bonds needed, so it's essential to check your local requirements. Your insurance agent can also help determine the necessary bond for your license.

A License bond is often required for various industries, such as liquor stores, auto dealerships, and mortgage brokers. Business owners should verify the bond requirements for their specific license.

Government requirements for gaining a license or permit are covered under License & Permit Bonds. This type of bond is necessary for obtaining a license or permit in a city, county, state, or for federal projects.