Types of Losses

[Mother Bond]

What types of losses are covered by a fidelity bond?

[Bond Magician]

Basically, fidelity bonds protect a business from employee theft/embezzlement. Small companies can be especially hard hit by theft because they can't afford extensive safeguards and are not large enough to absorb the losses. It really pays to have a fidelity bond in place to protect the business. Also, fidelity bonds are reasonablly priced compared to other types of surety bonds.

For example - employees of a nanny service stole items from homes in which they worked. So, if you have an employee dishonesty bond in place, the surety company will pay the full bond penalty and reimburse the empoyer in the event of a loss.

Hope that helps...

[Surety Queen]

Originally Posted by Bond Magician

Basically, fidelity bonds protect a business from employee theft/embezzlement. Small companies can be especially hard hit by theft because they can't afford extensive safeguards and are not large enough to absorb the losses. It really pays to have a fidelity bond in place to protect the business. Also, fidelity bonds are reasonablly priced compared to other types of surety bonds.

For example - employees of a nanny service stole items from homes in which they worked. So, if you have an employee dishonesty bond in place, the surety company will pay the full bond penalty and reimburse the empoyer in the event of a loss.

Hope that helps...

Just remember that most fidelity bonds have a conviction clause. This means that before a bond will pay a claim, the person accused of the crime must be charged and convicted in a court of law. You also want to make sure you have ample insurance.

[Mother Bond]

I'm confused... so does it protect a company against internal theft or if an employee steals from a customer? Or does it cover both circumstances?

[Bond Magician]

Originally Posted by Mother Bond

I'm confused... so does it protect a company against internal theft or if an employee steals from a customer? Or does it cover both circumstances?

An employee dishonesty bond protects the employer from internal theft by an employee. It doesn't protect the employer's customers from theft by their employees. That would fall under a third party fidelity bond.