Learn more about employee dishonest bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are Employee Dishonesty Bonds?
Employee dishonesty bonds are a type of fidelity bond. Fidelity bonds are different than many other surety bonds because they protect the bond purchaser (the principal), rather than the public or a state agency. Specifically, employee dishonesty bonds protect the purchaser against financial losses resulting from the dishonest acts of an employee, such as embezzlement, check forging, fraud, or the theft of money or merchandise. Don’t confuse employee dishonesty bonds with business service bonds, such as janitorial bonds, which protect a business’s customers against loss due to acts of theft by the business’s employees.
Who Needs Them?
These bonds are not mandated by a government agency or other obligee. Business owners voluntarily choose to purchase them to protect themselves. In 2016, the median loss suffered by small and midsize businesses as a result of employee theft was $289,864. Few small businesses can survive a loss of that magnitude, so purchasing an employee dishonesty bond can be a lifesaver.
How Do They Work?
The terms of some these bonds may require proof that an employee has been convicted of an illegal act before the employer can file a claim. In other cases, there is no conviction requirement, leaving it up to the surety company to investigate the claim and determine whether or not it is valid. Be sure you know whether the bond you’re purchasing imposes a conviction requirement.
In the event that a court of law (or surety company) determines an employee has committed a dishonest act resulting in a financial loss for the business, the surety company will pay the business owner’s claim, up to the amount of the bond. The employees of a business are not a party to the bond and have no responsibility to repay the surety company any amount paid out on a claim.
What Do They Cost?
These bonds are relatively inexpensive considering the benefits they offer. They can be purchased for an annual premium of as little as $100 to $400.
The surety company takes into account several factors in determining the exact cost the bond, including the desired amount of protection, the number of employees working for the applicant, and the security and control measures that are in place to deter and detect criminal acts—such as a camera-based surveillance system.
Use our convenient online system to apply for an employee dishonesty bond today.
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