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Employee Dishonesty Bonds

  • Quick Online Application for $25k coverage or less. Takes only a few minutes to complete your bond request.
  • Call Us for coverage amounts greater than $25k.
  • A-Rated Treasury listed Sureties
  • Highly Competitive Rates

What is an Employee Dishonesty Bond?

Employee dishonesty bonds are a type of insurance coverage businesses can put in place to help protect them from fraudulent or dishonest acts of an employee, such as theft. Many companies conduct their daily business by exposing their employees to the tools and assets necessary for the business to function correctly, grow and profit. In most cases, this relationship between the employee and the business assets is genuine and honest. Most employees have an interest in the success of the company they work for. In some instances, however, an employee may purposely take actions that lead to the loss or damage of business assets. The Employee Dishonesty Bond is one tool that can provide some protection to the employer against these circumstances.

How do Employee Dishonesty Bonds Work?

Employee dishonesty bonds are a type of insurance policy a business can purchase. The policy protects the business from what could be considered and internal risk, the employees of the business. If an employee does something that leads to a defined type of loss to the company, such as stolen money or property, the company can file a claim with the insurer to help recoup the loss. The bond does require that the employee is tried and convicted by a court for the act.

The bond covers the insured company against acts committed by an employee of the company that are considered criminal acts and are punishable by law. The criminal code to be considered when determining what is punishable is based on the legal jurisdiction where the company resides.

While the type of dishonest or fraudulent act is strictly defined in these policies, so is who can be considered a covered employee. These policies provide definitions of who can be considered a covered employee in the policy verbiage. These definitions can be lengthy but generally speaking, a covered employee has to meet these criteria:

  • The person must be a direct employee of the company.
  • The person must be compensated by salary or wages.
  • The employer must be directly in charge of assigning the employees job functions.

It's always a good idea and a prudent practice to fully read any surety bond or insurance policy language to ensure you have a clear idea of all the applicable definitions included in the coverage.

There are some losses not typically covered by these policies. Dishonest acts committed by the owners/partners of the company are often not covered. Indirect losses such as a loss of income due to stolen equipment is not usually covered, even while the stolen equipment may be covered. Legal expenses to the company related to the covered act are not typically covered by the bond either.

When a covered act occurs, the insured company can make a claim, up to the bond or coverage amount, to help recoup what was lost. Making a claim on an employee dishonesty bond involves several steps of communication between the insurer and the insured company. The insurer needs to be made aware of the loss. The insurer will also need an itemization of the loss and proof of the legal action against the employee regarding the loss. When the insurer and the insured company come to agreement on the amount of the loss, the claim can be paid or settled in some other manner acceptable to remedy the loss.

How Employee Dishonesty Bonds differ from standard Surety Bonds.

Dishonesty bonds differ from standard surety bonds in several key ways. The most crucial difference is who is indemnifying. With an employee dishonesty bond, the insurer is indemnifying to provide protection to the insured who purchased the dishonesty bond. With a standard surety bond, the principal purchases the bond, typically as a requirement of them, for the protection of others. Indemnification matters because it determines who is ultimately financially responsible for amounts paid to settle claims. With a dishonesty bond, the insurer pays the claims and there is no expectation from the insurer to recoup the loss from the insured. Standard surety bonds, where the principal indemnifies, work different. When a surety settles a claim, the principal, the party who is bonded, is responsible to for paying the surety back the amount expended settling claims on the bond. A dishonesty bond works like an insurance policy rather than a typical surety bond.

Viking Bond Service Provides Employee Dishonesty Bonds

If you need an Employee Dishonesty Bond, Viking Bond Service can help. We have provided our clients with dishonesty bonds and all other types of surety bonds in all 50 states for almost 20 years. We work to get our clients the best terms and the most competitive rates. Our process is fast so you can move through your bond request quickly and easily. If the coverage amount for the dishonesty bond is $25,000 or less, the application can be complete online and the whole process can take as little as a few minutes to complete. For higher amounts, call us at 1-888-278-7389 or complete the contact form on the page and we will contact you.

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