Home / Menu - Fidelity Bonds

Menu - Fidelity Bonds

• Business Services Fidelity Bond - An insurance policy to protect customers from unethical behaviors of the service provider's employees - eg. if an employee stole something while working in a clients office.
• Employee Dishonesty Bond - This type of policy protects the employer from employee misconduct - eg., theft, forgery, embezzlement.
• Financial Institution Fidelity Bond - This type of policy protects a Financial Services employer from employee misconduct - eg., theft, forgery, embezzlement.
• Janitorial Services Fidelity Bond - Policy that applies specifically to misconduct committed by employees of cleaning services companies.

Fidelity Bonds

Employee misconduct like theft or fraud poses a significant risk for any organization. One way to manage that risk is with a fidelity bond, sometimes called "employee dishonesty insurance." In general, businesses aren't required to get fidelity bonds. Still, many choose to purchase coverage both to protect themselves and their customers or clients from potential damage due to employee misconduct.

What is a Fidelity Bond?

A fidelity bond or fidelity policy is a type of surety bond designed to protect employers and their clients if employees commit illegal or unethical acts. For example, if someone responsible for managing money embezzled funds, a fidelity bond provides a mechanism to recover those losses.

What Types of Fidelity Bonds are There?

There are several types of fidelity bonds, each working a little differently depending on the industry they relate to and the kind of misconduct they protect against. Here are some common examples:

• Business Services Fidelity Bond - This insurance policy protects customers from unethical behaviors of the service provider's employees, such as if an employee stole something while working in a client's office.
• Employee Dishonesty Bond - This type of fidelity policy protects the employer from employee misconduct such as theft, forgery, or embezzlement.
• Financial Institution Fidelity Bond - This type of policy protects a Financial Services employer from employee misconduct, like theft, forgery, or embezzlement.
• Janitorial Services Fidelity Bond - A janitor fidelity policy applies specifically to misconduct committed by employees of cleaning services companies.
• ERISA Fidelity Bond - This is a special type of insurance policy that protects employee benefit plans against illegal acts like embezzlement and other malfeasance.

Fidelity bonds protect company owners and their clients from damages due to employee fraud or wrongdoing. The bonds allow employers or their customers to file a claim against the policy seeking financial compensation for damages resulting from employee misconduct. In most cases, the misconduct must first be reported to the police and prosecuted. A conviction is required to validate the claim of wrongdoing. Once the claim is validated by a conviction, the surety company that issues the policy settles any claims up to the value of the bond. Fidelity bonds provide a mechanism for companies to recover from employee misconduct, which can seriously harm the company's bottom line and reputation.

Who Should Get a Fidelity Bond?

Unlike most types of surety bonds, a fidelity bond is not required by a government agency but is optional. Except for some specialized types of fidelity policies that protect employee benefit plans, as well as policies for public officials, obtaining a fidelity bond is entirely up to the company. However, many organizations choose to get one to help manage the risk of employee misconduct. They consider the likelihood of an employee breaking the rules and estimate the resulting costs. Many conclude that the fidelity policies offer a welcome level of protection. And many companies choose to get the protection as an advantage over unbonded competitors. Obtaining a fidelity bond demonstrates credibility and professional standards to potential clients.

How Much Does a Fidelity Bond Cost?

The cost of any surety bond, including a fidelity bond, is a tiny fraction of the bond's value. Typically, the premium ranges from 1% to 3% of the bond. Since most fidelity bonds are optional, the business owner can determine the bond size based on the size, nature, and value of their business, as well as the amount of coverage desired.

Those getting a fidelity bond may seek a bond ranging from $5,000 to $50,000 and up depending on the specific fidelity bond type. For the current pricing for your specific fidelity bond request, call us for a quote.

Fidelity Bond Requirements

Although some specific types of fidelity bonds, like ERISA bonds, are required, most are entirely optional. For instance, no government entity requires a janitorial service to take out a bond. However, customers will appreciate the peace of mind afforded by a bonded service. So, many companies choose a fidelity bond for the competitive advantage it can provide.

Viking Bond Service - Fidelity Bonds Made Easy

At Viking Bond Service, we simplify getting surety bonds like fidelity policies. As a nationally licensed surety agency, we provide the fidelity bonds that provide the coverage you need at a price you can afford. You can apply online or give us a call at 1-888-2-SURETY (1-888-278-7389). We look forward to meeting all your surety bond needs.