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A fidelity bond is actually a type of insurance a business owner purchases to protect the company from losses due to dishonest or fraudulent activities conducted by its employees.
There are two types of fidelity bonds. A first-party fidelity bond insures the company’s assets, including money, securities and property against any wrongful, intentional acts, such as theft, embezzlement, forgery and fraudulent trading committed by the employees of the business. A business may choose either blanket coverage, which covers all its employees or scheduled coverage, which covers certain employees at different amounts depending upon the risks of each particular job. Blanket coverage works well for large companies or businesses that have high turnover rates.
A third-party fidelity bond insures the assets of the business against wrongful, intentional activity committed by independent contractors or consultants. The independent contractor is responsible for bonding when they do work for a partnership. A third-party fidelity bond is especially important when the business is involved in finance or banking because of its increased risk of loss from theft.
Brokerage firms, security firms, cash carriers and insurance companies need fidelity bond coverage to provide protection in proportion to their net capital.
Contributors to pension plans managed by the Employee Retirement Security Act of 1974 (ERISA) must provide fidelity bond coverage equal to at least 10 percent of the total plan assets. Plans regulated by ERISA are generally voluntary pension plans that cover workers in private industry.
Are you a business owner who wants to protect your company with a fidelity bond? Maybe your financial business is required to carry fidelity bonding. You might also be an independent contractor or consultant, and the company for which you’re working requires you to hold a third-party fidelity bond. Whatever the case, we at Simon Insurance Agency and the companies who preceded us have over 30 years’ worth of experience in helping our clients obtain bonding. We can do the same for you. For a fast, free quote and expert consultation, just call 561.948.4141 or fill out the convenient online application. We serve the entire state of Florida with our motto, “Our word is our bond.”