Fidelity bonds are surety bonds that reimburse clients for losses caused by dishonest employee acts. These include forgery, theft, and other fraudulent activities. They can be purchased for window repair workers, janitorial services, dog sisters, and even professional offices.
Some fidelity bonds, like ERISA bonds, are required by law. Other businesses buy them voluntarily to ensure their customers are protected.
Fidelity bonds are surety bonds that provide financial compensation to clients in the event of employee dishonesty. This type of business insurance protects companies against losses resulting from theft, embezzlement, forgery, and fraud.
This kind of coverage is also sometimes required by client contracts. For example, an accounting firm that handles sensitive information for its clients may need to have a fidelity bond in place to ensure the firm can pay back any losses due to fraudulent activities by its employees.
Several types of fidelity bonds exist, including ERISA and business service bonds. These are easy for insurance agents to write and can be a great way to add value to your clients’ insurance portfolios.
Increased Customer Trust
Fidelity Bonds are more than just a business insurance policy; they reassure clients that the company they choose to work with is honest. This can be especially important for companies with unsupervised access to customers, like window cleaners, dog sitters, or contractors.
There are different types of fidelity bonds available, including ERISA bonds that protect retirement-plan beneficiaries from the acts of fiduciaries who manage these funds; business services bonds, which protect companies against losses that can be caused by their employees entering a client’s home or place of business; and employee dishonesty bonds, which cover theft of money or property by specific employees.
These kinds of bonds are often required by law, but companies can also purchase them voluntarily to give their customers extra peace of mind.
Increased Employee Confidence
Fidelity bonds are a good investment for any business that deals with money. They can protect against theft, embezzlement, fraud, and forgery committed by employees or customers. This is important because such acts can significantly hurt a company’s bottom line and lead to financial losses.
There are two types of fidelity bonds: first-party bonds and third-party bonds. The former protects companies against the wrongful acts of their employees, while the latter protects businesses from the criminal acts of contracted workers.
In addition to offering financial protection, fidelity bonds also boost employee confidence. As a result, they can help reduce the risk of devastating financial losses and allow businesses to continue operating uninterrupted. This is why I always recommend that my clients consider purchasing a fidelity bond when seeking commercial insurance.
Fidelity bonds protect businesses from harm caused by the dishonest acts of employees and contractors. For example, if an employee at a cleaning service steals money or goods from a client’s home during a cleaning visit, the company could be held liable. A fidelity bond would reimburse the client for their loss.
Other types of fidelity bonds include probate bonds, which guarantee honest behavior from fiduciaries acting on behalf of an estate. Contract surety bonds, including bid, payment, and performance bonds, ensure that contracted workers do their duties honestly. ERISA fidelity bonds protect employee benefits and retirement plans against financial loss from plan managers’ dishonest or unethical actions.
Bond prices fluctuate, and bonds are not insured (unlike CDs). Bond investments require a higher degree of analysis than stocks or cash.
Fidelity bonds help companies reduce the risk of loss due to fraud or dishonesty. They are an excellent investment for any business with a high-risk employee or is concerned about the actions of third parties with access to company assets.
Investors can enjoy a wide variety of Fidelity investments with commission-free trading. They can purchase shares of more than 7,000 stocks and ETFs with no charges and invest in fractional shares. Fidelity also pays interest on customer cash balances, a practice not widely adopted by online brokers.
Investors can get support from a Fidelity representative by phone, email, or live chat. They can also visit one of the many Fidelity Investor Centers. They can even find helpful educational content through their website.