What is a Fidelity Bond?
Every year, companies lose millions to employee theft, with some cases even resulting in bankruptcy. Fidelity bonds are generally thought of as employee dishonesty insurance. These bonds provide protection for yourself or your clients from unscrupulous employees who commit some type of theft and allow businesses to hedge against financial losses. These policies are especially important for small businesses, which can be financially destroyed by the actions of a single dishonest employee.
Why Protect Yourself?
According to the U.S. Chamber of Commerce:
- 3 out of 4 employees admit to stealing from their employers at least once.
- 1 out of 3 business failures is the direct result of employee theft.
- Employee dishonesty losses incurred by American businesses total more than $50 billion annually.
Find Your fidelity Bond
There are hundreds of different bonds for all kinds of purposes—but regardless the industry or project—they all operate essentially the same way. A surety bond guarantees that you will operate professionally and if you break the rules, a claim can be made on your bond which you’re responsible to pay.
It’s a guarantee that you will complete the work and fulfill your contractual obligations. Think of it as insurance for the public, not your business.
For most bonds, you can get instantly approved and print bonds at your home or office. However, we do not offer instant approvals for a select number of bonds, as the underwriting process generally involves a more extensive review of the applicant.
The entity requiring the bond (the obligee) will determine whether a bond is required. Bond requirements vary greatly by your occupation and location. However, fidelity bonds are insurance and are usually optional to obtain.
For the most part, yes. Bad credit can increase rates for license and permit bonds and most can also get approved for fidelity bonds regardless of credit. For contract bonds, larger contractors with poor credit can be approved with strong CPA-prepared business financials.
It’s a legally binding contract that you must sign to obtain a surety bond. The agreement guarantees that if you cause bond claims you will pay them in full.
You must fulfill the terms of the bond obligations, which vary immensely depending on bond type. Where you obtain your surety bond is important when it comes to understanding claims and avoiding them entirely. If you have any questions about what your bond does or doesn’t guarantee, reach out to our experts to help guide you along the way.
fidelity Bond Resources
The bonding process can be confusing and cumbersome. Our surety bond experts are standing by and ready to answer any questions. Let’s get you bonded today!