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Insurance is an essential part of every business plan. It helps protect companies against perils that can threaten the organization's well-being. Employee crime is a potential problem for many organizations. Fidelity bonds have been developed to protect companies when employees steal money from their employer.
There are three basic type of bonds that help product your business:
Employee Fidelity Bonds – respond when an employee intentionally diverts funds from the company for his own use. Fidelity bonds respond when a fraudulent or dishonest act has resulted in a financial loss to the organization. Fidelity bonds can be purchased on specific employees, such as the account department, or across the entire organization.
Employee Dishonesty Bonds – respond when an employee steals from a customer of the employer. In this case, the theft is undertaken by an employee who performs a service at a customer’s location. In other cases, it is undertaken by an individual the customer has entrusted with personal information, such as an investment adviser or stock broker.
ERISA Bonds – The Employee Retirement Income Security Act protects employee retirement plans and pension funds from financial loss caused by a trustee of the plan. If a pension plan has been managed in a negligent or fraudulent way, the act permits the government to pursue the personal property of the trustees to restore the lost funds. To protect the company and its directors, many companies purchase fidelity bonds that respond in instances of theft or negligence.
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Management Liability