Fidelity Bonds for Small Businesses

If your small business handles cash, or collect payments on behalf of your customers, fidelity bonds should be an important part of your company's insurance protection.

For example, if a trusted employee steals money, items, information or other valuable assets from your business or a customer, a fidelity bond will provide protection from the financial consequences of that loss.

Fidelity bonds may be required in some customer contracts before they a client will allow your company or employees to provide services, such as a property manager who collects rents on behalf of a building owner.

The cost of a fidelity bond will vary according to several factors, such as:

• The type of work your small business conducts
• The clients you serve
• The amount of assets that may be involved
• The size of your firm
• Any previous losses.

Several types of fidelity bonds are available to small business owners:

Business services bonds provide protection for the loss of customer funds, equipment, supplies or personal belongings caused by your employee's theft on a customer's premises. This type of bond is typically used by contractors, businesses that provide custodial services, and other firms that need off-hours access to customer facilities.

Employee dishonesty bonds protect small businesses against financial loss resulting from employee fraud or theft, equipment, or other property owned by your small business.

Services providers may also wish to consider fidelity bonds if their employees have access to clients' financial information, customer records or IT resources. Any inappropriate access or misuse of sensitive client information, are among the exposures that can be covered with a fidelity bond.

If your company handles customer assets or accesses their facilities, a fidelity bond can provide important protection against loss and peace of mind for you as the business owner.