• June 3, 2020

Your Brief Guide to Insuring Your Business with Fidelity Bonds

Your Brief Guide to Insuring Your Business with Fidelity Bonds

Your Brief Guide to Insuring Your Business with Fidelity Bonds 1024 629 Patrick J. Thomas Agency

Fidelity bonds are a type of commercial insurance that employers use to protect their business against fraud or harmful actions committed by their employees. This type of insurance also protects the customers of a business should the actions committed by the employees affect them as well.  

Most businesses need to have fidelity bonds in order to protect their customers. Although they are generally held by insurance companies, financial institutions, and brokerage firms, other businesses can also use them as a form of protection. 

What Fidelity Bonds Cover

There are many different types of fidelity policies, which generally protect against: 

  • Embezzlement: an employee stealing from the company 
  • Theft: an employee steals money or valuables from a customer 
  • Identity theft: an employee steals the identity of a customer or another employee 
  • Asset theft: an employee steals assets from the company 

Fidelity bonds only cover claims up to the amount that is listed in the policy, so it’s important to work with a surety agency who can assess the risks you will be facing and help you determine an amount for the insurance that will adequately cover the losses you or your customers may incur. 

What Fidelity Doesn’t Cover

Fidelity bonds are not all encompassing. There are certain things they do not cover, which can include: 

  • Errors and omissions 
  • Bodily injuries 
  • Breaches of contract 
  • Employee actions that do not result in financial losses 

About ERISA Bonds

ERISA bonds are a type of fidelity bond that businesses are required to obtain. ERISA bonds and insurance protect the retirement plans of employees in the event that company commits fraud or some type of dishonest act. The types of assets that are protected include 401ksretirement plans, and pensions. They also give employees the right to sue for breach of benefits. 

Keep in mind that fidelity bonds are not the same as surety bonds, and they are not comprehensive commercial insurance. If you are required to obtain a surety bond for your business, or you need any other type of insurance for your business, you will need to work with a company who provides them. 


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.


The Patrick J. Thomas Agency specializes in surety bonds, fidelity bonds and many types of commercial insurance. For comprehensive coverage and protection for your business, contact our surety and insurance agents today.