• December 17, 2021

The Major Types of Fidelity Bonds and What They Cover

The Major Types of Fidelity Bonds and What They Cover

The Major Types of Fidelity Bonds and What They Cover 1024 655 Patrick J. Thomas Agency

Fidelity bonds are an important type of insurance for companies because they protect your business and customers from thefts committed by your employees. If you have a business that has employees who handle large amounts of cash, valuable items, or other expensive assets, a fidelity bond is a type of insurance that you should consider. 

There are multiple types of fidelity bonds that can protect your business and customers. Understanding the different types is the first step in selecting the right coverage for your business. 

The Two Types of Fidelity Bond Coverage

There are two primary types of coverage: first party and third party. First party coverage protects your business against thefts committed by your employees. Third party coverage protects your clients in the event one of your employees commits theft or loses their property. Third party coverage is common if you have employees who frequently work onsite at properties owned by your customers. 

The Different Types of Fidelity Bonds 

There are three types of fidelity bonds that can be purchased as protection for your business: 

  • Business service bonds: these types of bonds protect your customers from theft or loss of their funds, valuables, and other assets. This type of coverage can help you differentiate your business from competitors in your industry, as not every business carries this type of insurance. 
  • Employee dishonesty bonds: these types of bonds protect your business from fraudulent activities committed by people you employ. If their actions cause your business to lose money, property, or other assets, these bonds will help cover the losses. 
  • ERISA bonds: ERISA insurance protects your employees by safeguarding their assets in the event dishonest or negligent actions financially harm them. ERISA bonds protect your employees and their beneficiaries by setting a minimum standard for pension plans. They also guarantee the payment of benefits to employees. This includes pensions, 401(k)s, etc. 

Do You Need Fidelity Bond Coverage?

That depends on the type of business or organization you run, and the risks you are willing to take. Having different types of fidelity bond coverage not only protects you, it also protects your customers and employees. It’s a great way to gain more clients and attract more talented employees. 

If you need help obtaining fidelity bond coverage for your business or organization, get in touch with the surety and insurance experts at The Patrick J. Thomas Agency today. 

Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.