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Financial Institution Bond

If you operate a finance-related business, you may benefit from having a financial institution bond in your risk management portfolio. This type of fidelity bond protects against a notoriously unpredictable and unmanageable form of risk: employee misconduct. Could your business use this specialized type of fidelity bond? Explore the details to decide.

What is a Financial Institution Bond?

Financial institutions responsible for managing large sums of money put a significant amount of trust on their employees. When an employee breaks that trust - by embezzling funds or forging signatures, for example - a financial institution surety bond lets the institution file a claim for the loss amount. The surety company that issues the bond guarantees to pay the claims after validating the loss and progressing through the claim process.

How does a Financial Institution Bond work?

Since financial institution bonds compensate employers when one of their employees causes a financial loss, they help companies prepare for the unexpected. Employee misconduct happens everywhere, regardless of the size or prestige of the organization. There are many ways to manage this risk, but when companies can't stop it entirely, financial institution bonds help to cushion the financial blow.

Who should get a Financial Institution Bond?

Anyone concerned about the consequences of employee misconduct. Financial institutions aren't required to get a surety bond, but many choose to do so to protect their bottom line and their hard-earned reputation from the unplanned disruptions caused by unethical employees.

Who are the parties involved in a Financial Institution Bond?

Unlike traditional surety bonds, which involve three parties, fidelity policies like this one involve only two parties:

  • Principal - The institution that obtains the bond. The principal has the right to file a claim on the policy if they fall victim to any of the instances outlined in the terms of coverage.
  • Surety - The institution that issues the bond. The surety agrees to compensate the principal for all validated claims.

How much does a Financial Institution Bond cost?

The exact cost of a surety bond depends on a number of factors: the kind of financial institution, the number of employees, and the amount of coverage needed. Costs are large for some and small for others, but in general, financial institution bonds tend to cost less than traditional surety bonds. Most important, they help safeguard against sudden financial losses, making the cost more of an investment than an expense.

How to apply for a Financial Institution Bond?

To obtain a financial institution surety bond, you will need to fill out a standard bond application with details about your business, your background, and the amount of coverage you're seeking. You will then receive a quote for the cost of the bond premium within 24 hours. Once you pay the premium, the policy will be issued.

Viking Bond Service - A Partner to Financial Institutions

Don't spend longer than necessary looking for a bond, and don't commit to a substandard bond either. With Viking Bond Service, a national surety agency with a reputation for service, you can quickly get a quote for a bond that checks all your boxes. Complete the application at any time, or reach us through the contact form on this page or at 1-888-278-7389.

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