Fidelity bonds are insurance policies cover damages and liabilities that arise from dishonesty and fraud by a company’s employees. In this article, we will talk more about fidelity bonds so you will know if you should get then or not.
While they are optional most of the time, there are certain certain industries that are required by law to have a fidelity bond policy in place. These industries that need to have this type of policy are investment companies that handle large amounts of money. But even if you do not belong to an industry where this type of insurance is a must, you will definitely benefit from it.
While we do our best to help hire only competent people with a strong moral fiber (read: honest), you can never tell what happens to people if they are allowed to handle large amounts of money or if it’s part of their job to visit wealthy clients at home. There is always the temptation of theft, or worse, full-scale fraud. You can protect your bottom line by having an insurance policy in place to pay out any losses from theft and fraud.
There are two types of fidelity bond insurance: first person and third-party. First person policies cover acts of dishonesty by a company’s employees. Third-party policies, on the other hand, are for people working as consultants and contractors for a company. While it’s always the company that pays for first-person policies, with third-party policies, it’s the contractor or consultant who pays.
As for the coverage self, there is what you would call blanket coverage and custom coverage. Then there is what you would call an ERISA coverage, which covers any theft or fraud on employee pension plans.
Now that you know more about fidelity bonds, you might be asking how much it would cost you. The cost of a plan is really dependent on several factors, including the size of your company, number of employees covered, coverage amount, and coverage type. Sometimes an insurer will also take into consideration the number of employees that you have and what their responsibilities are to make custom coverage. In general however, the price you pay would not go beyond 1% of your coverage amount. So, if you have a coverage amount of $100,000, only need to pay $1,000 in premium.
If that sounds affordable to you, it is. Before getting a plan however, you shouldn’t get a quote from at least three insurance companies. even better, talk to a freelance insurance agent and ask for a code from at least three different insurance companies.
Having an insurance agent by your side means having a person who can assess your needs and find the insurance plan that fits you best in terms of coverage type and coverage amount. If you do not if you do not know of any insurance agents, you do not need to worry because they can be easily found online. Just go to Google and search for “fidelity bond insurance quotes” in the search bar.