Learn more about employee theft bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are Employee Theft Bonds?
Employee theft bonds (also called employee dishonesty bonds) belong to a category of surety bonds known as fidelity bonds. They provide protection for employers against financial loss that results from unlawful acts that their own employees commit. These acts can include things like embezzlement, theft (of cash or physical/intellectual property), forgery, property damage, misuse of confidential client information, and more.
You have a few options here:
Primary Commercial Blanket Bond. Provides blanket protection against the misdeeds of all employees.
Blanket Position Bond. Provides blanket protection for specific groups of employees, such as cashiers or bookkeepers.
Name Schedule Bond. Provides protection for specific individuals, such as the company’s chief financial officer or accountant.
Don’t confuse these bonds with the type of business services bonds often referred to as janitorial bonds. Those are meant to protect the business owner and clients against financial loss due to crimes committed by employees working in or around the client’s home or business premises.
Who Needs Them?
It’s an unfortunate truth that just about any business owner with employees is vulnerable to loss as a result of the criminal acts of those employees. Studies routinely show that as many as one third of employees have stolen from their employers within the previous twelve months.
According to the American Society of Employers, business owners lose as much as 20% of revenues to employee theft, which is the direct cause of about a third of all business failures. The median loss to a business from embezzlement alone comes to approximately $100,000. Any business that can’t absorb a loss of that magnitude could benefit from an employee theft bond.
How Do They Work?
These bonds are entirely voluntary and work more like insurance than most types of surety bonds. The surety company will pay valid claims against the bond without expecting to be reimbursed.
Some people may not be considered bondable if a preliminary background investigation reveals a prior criminal record. Each surety company sets its own standards for what makes an individual unbondable.
An employer who discovers that an employee has committed an unlawful act resulting in a financial loss to the company must file criminal charges before filing a claim against the bond. Some employee theft bonds contain a conviction clause, which means that a claim will only be paid if the employee is actually convicted of a crime.
What Do They Cost?
There is no hard and fast universal rule for pricing this type of bond. Each surety company takes into account factors such as the number of employees to be bonded, the bond amount, the size of the business, and the industry the company is in.
Our surety bond professionals will answer your questions and find you the best employee theft bond for your specific needs.