The importance of fidelity bonds is much more than you can think of. This bond will provide your business a form of insurance. It will offeryou protection against losses whether it is physical loss or monetary caused by an employeeor employees due to their dishonest or fraudulent actions. Fidelity bonds are usually held by brokerage firms and insurance companies. These binds are typically necessary as a protection proportional to thenet capital. The type of protection that the fidelity bond covers includesloss due to theft, fraudulent trading, and forgery.In short, a fidelity bond will give you a complete peace in mind.
Features of fidelity bond
Despite the term ‘bond,’ this has some unique features that make it starkly different from any other bonds that you commonly know of. This is entirely an insurance policy. It cannot be traded or there will be no interest accrued in it like any regular bond. Fidelity binds are also known as “honesty bonds,””employee dishonesty insurance,” and “fidelity guarantee insurance” depending on the country you purchase it from. It helps a business in its risk management strategy. Any actions taken by an employee against the company or its clientele that may result in a loss is covered by this insurance policy.
Specialized for of the bond
The specialized for on fidelity bonds will cover everything from cash thefts, stealing from a customer, acts of forgery, robbery and burglary from the safe, destruction of property belonging to the business, illicit transfer of funds or illicit acts during customer service. There are a few specific bonds that are mandated for every businessto obtain. One such requirement is to protectthe retirement plan assets of the company. These ERISA bonds provide the individual up to 10% of the value of funds they are allowed to access in the retirement plan assets.