In today's world, it is a sad fact that theft, or deceitful acts, are a part of doing business. As a business owner, you are at risk for theft, fraud, forgery, and other terrible acts committed by not only outside sources such as customers but also your very own employees.
Some ways that internal or external forces can commit these acts is by simply stealing cash or your business personal property, committing forgery or alteration, computer fraud, extortion, embezzlement, and credit card fraud.
These are just a few of the ways that criminals have come up with to try to take your business down.
Crime insurance was developed to protect your business from these evil forces by reimbursing you for these vast, sometimes devastating, losses.
A Fidelity Bond is a type of Crime insurance that is often required by some states for you to even obtain a business license.
The primary purpose of a Fidelity Bond is to provide protection for you, and even your customers, from acts of fraud committed by your employees. You may have also heard of this referred to as Employee Dishonesty.
The biggest claim we see in regards to Fidelity insurance is monetary theft. While you may think that your employees are your family and they would never steal from you, it is more often than not the ones you trust the most that end up being the thieves.
What would happen to your business if you found out one of your employees stole money from you? Or maybe even worse, from your customers? Let's say you send your employee out to a customer's home to complete some work, and they end up missing some cash and jewelry.
You will want to have a Fidelity Bond to reimburse the customer quickly. Otherwise, they could tarnish your name in the public eye. It's not just the monetary loss you have to keep in mind.
Crime insurance refers to a vast array of insurance coverages. Some of these include:
There are three types of Fidelity Bonds that your business could benefit from:
Designed to protect your business from loss of money by theft by your employees.
This protects your customers from losses due to theft by your employees. Remember, being able to solve their problem quickly by replacing what was stolen can help protect your business's image.
If you manage any employee benefit plan, like a 401k, this type of bond is required by the Employee Retirement Income Security Act (ERISA) of 1974. It protects the money in the plan if the managers misuse the funds, by theft, embezzlement, or any other actions of this sort.