Employee Dishonesty Bonds Explained
Employee dishonesty bonds are a type of fidelity bonds which serve as protection for your business. Similarly to insurance policies, they provide your company with a safety mechanism in case your employees engage in illegal actions such as theft, burglary, forgery, and embezzlement on the job. Often they are also referred to as commercial crime bonds.
Many types of businesses use dishonesty bonds to protect their assets against employees' fraudulent actions. Some of them include accountants, medical service providers, various types of professional services, non-profit organizations, financial institutions, and many more.
If you suffer damages due to the dishonest acts of your employees, you can file a claim with the surety. In some cases, it may need a conviction of the perpetrator before paying out a reimbursement on the claim. In general, the surety needs to examine the case. If it is proven, you will receive adequate compensation.
Questions about Fidelity Bonds
When do I need an employee dishonesty bond?
Employee dishonesty bonds are not obligatory or required by law. You can voluntarily obtain them in order to protect your business. The typical situations when you may wish to get such coverage is if you have employees with access to important documentation and assets that they may misuse. However, dishonesty bonds can be used by companies in a wide variety of situations to ensure compensation in case their employees commit fraud, theft, and similar illegal activities.
If you wish to get protection for your clients as well, in case an employee commits unlawful actions while on their premises, you would need a different kind of fidelity bond called a business services bond.
How much are the bonding costs?
For most types of fidelity bonds, the costs depend on a few main factors. They include the number of employees whom you want to cover, the type of business that you are running, and the dollar amount of the coverage that you seek. Typically, obtaining employee dishonesty bonds and other fidelity bonds is cheaper than getting other types of surety bonds.
Can I get an employee dishonesty bond with problematic finances?
Unlike surety bonds, fidelity bonds are usually not impacted by the credit score of the business owner. That is why, typically, obtaining a bond with unstable finances is not an issue.
What is the bonding process like?
The process for obtaining an employee dishonesty bond is the following:
- Download the application form
- Fill it out and send it to [email protected] or fax it to (267)-362-4817.
Do you need further information about employee dishonesty bonds? Lance Surety Bonds' specialists can help. Just call us at (877) 514-5146.
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