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Thread: Types of Losses

  1. Join Date
    Oct 2007
    Posts
    171

    Types of Losses

    What types of losses are covered by a fidelity bond?

  2. Join Date
    Oct 2007
    Posts
    401

    Types of Losses

    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...

  3. Join Date
    Oct 2007
    Posts
    558

    Fidelity Bonds

    Quote 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.

  4. Join Date
    Oct 2007
    Posts
    171

    Types of Losses

    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?

  5. Join Date
    Oct 2007
    Posts
    401

    Types of Losses

    Quote 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.

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