Business Insurance Fidelity And Surety Bonds For Small Businesses
InsureYourCompany.com specializes in fidelity and surety bonds to further protect your business. Bonds are generally divided into two types, Fidelity Bonds and Surety Bonds. Fidelity surety bonds are different from insurance in that they always have three parties central to the contract:
- Principal – the entity or person that might cause the loss
- Obligee – the entity that collects under the bond, should the principal cause a loss
- Surety – the entity that pays the loss, such as an insurance company.
Fidelity Bonds are technically a form of Surety Bonds, but are usually considered a distinct product in common usage. They are issued as a guarantee against loss due to employee dishonesty. As such, they are an important part of a companies insurance program, because they cover areas not covered in the companies Liability and Property coverage. Your employees’ dishonest acts are a principal area of your insurable risks and Fidelity Bonds provide principal insurance protection. Fidelity Bonds come in several forms, including:
- Individual Bonds where an individual employee is bonded. Individual Bonds are not standardized. They can be most easily used for unusual situations or activities, and can most easily be specially scripted.
- Scheduled Bonds where individual positions (called a Positions Schedule Bond) or named individuals (called a Name Schedule Bond) are covered, for example all branch personnel in a bank, or all tellers
- Blanket Bonds cover all employees and provide the most complete coverage of the three types. The coverage is especially valuable because of the latitude given in demonstrating a covered loss. The employer doesn’t need to show that a specific covered employee caused a loss. If the employer can show that an employee must have caused the loss–that it was an inside job!–then coverage will be provided.
Discovery Bonds are an important extension of the Fidelity Bond types. A Discovery Bond allows a first-time buyer of Fidelity Bonds to protect against undiscovered loss that occurred before the bond was issued. If you, as employer, have just realized the need for a Fidelity Bond as part of your insurance coverage, you should also consider buying Discovery period coverage.
Surety bonds are issued to cover an extremely wide range of actions and situations. They are issued by surety companies, and can be classified into one of the following areas:
- Contract Bonds
- Court Bonds
- Federal Bonds
- License and Permit Bonds
- Public Official Bonds
- Other/Miscellaneous Bonds.
InsureYourCompany.com offers all types of NJ business insurance through a variety of insurance carriers. Protect the other important assets in your company with workers compensation insurance, general liability insurance, professional liability insurance, employee benefits, umbrella insurance, and more. We also specialize in technology insurance for IT professionals.
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