You have great employees, and you trust that they’ll do the right thing. While trust is important, so is security. Fidelity Bonds insure companies so that if an employee does commit an act of fraud, you’ll be covered for the losses. Does your company need a Fidelity Bond? Here’s how you can tell.
How Does a Fidelity Bond Work?
A Fidelity Bond acts like an insurance policy. If your company suffers losses due to the dishonest acts of your employees, a Fidelity Bond can help cover those losses. Just as you’d insure your company against disasters such as a fire, a Fidelity Bond provides insurance for human-made disasters such as fraud.
You can learn more about Fidelity Bonds.
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Reasons You Would Need a Fidelity Bond
Reason #1: You Want Protection Against Negligence
Sometimes, employees do not actively try to damage a company, but they are negligent in their actions. This can cause financial harm to a company.
If your company handles large amounts of cash or engages in large financial transactions, and there is the potential for a mistake that would severely impact your company’s finances, you may want to consider purchasing a liability bond that specifically protects against charges of negligence.
Reason #2: You Want Protection From Misrepresentation
Unlike a liability bond, which protects you in cases of unintentional negligence, a Fidelity Bond protects you if your employees are intentionally unethical.
Who represents you in the world of business? What would happen if they entered into a financial transaction and did not represent your interests correctly or ethically? If your company would stand to lose financially if one of your employees misrepresented your interests, you should consider purchasing a Fidelity Bond.
Reason #3: You Want Protection Against Fraud
Unfortunately, even though you try to hire good employees, sometimes an employee can breach your trust and may engage in fraudulent dealings. Do you need a Fidelity Bond to cover employees’ financial transactions?
Consider who in your company has access to large financial transactions and company assets. This will help you decide whether you need a bond that covers everyone who works at the company or whether you should insure a few people in specific responsible roles.
While you know that building a business culture of trust and communication is key to business success, it’s also important to have insurance. If you run a business, you can protect your business by working with your employees to maintain good ethical standards.
However, if an employee does not live up to these ethical standards, it’s important to make sure that your business is covered. That’s when your company needs a Fidelity Bond.
There are different types of Fidelity Bonds. You can learn about them here. The type of Fidelity Bond specific for employee theft/fraud is an Employee Dishonesty Bond.
Do You Need a Fidelity Bond?
Think your company or business needs a Fidelity Bond? Contact Surety Solutions. We can help you determine if a Fidelity Bond is right for you.
Already know you need a Fidelity Bond?
