How Do Fidelity Bonds Operate?
Fidelity bonds are a cross between insurance and surety bonds. They are required of some businesses, like those that operate within finances or those that handle customer funds or other assets. Sometimes, fidelity bonds are called third-party employee dishonesty bonds, but that’s just one type of these bonds.
Keeping A Company Safe
Anyone who owns a business of any kind wants to show a profit within their company, but in order to continue operation, they also need to be able to keep the company safe, which in turn means protecting customers. Fidelity bonds can help business owners protect their business in case they make a bad decision hiring and an employee does something unlawful or dishonest. These bonds can also protect the customers against losses that they might incur due to actions of employees. Those who have never had fidelity bonds before might not understand how they operate, but it is essential to know at least the basics in certain business types.
The Inner Workings Of Fidelity Bonds
Fidelity bonds work somewhat like insurance for a business. They aren’t protection for the company, but rather a safety net for the legal authorities and your customers. There are several types of fidelity bonds including business service bonds, employee dishonesty bonds, and ERISA bonds, to name a few. The most commonly used bond is the employee dishonesty bond, which protects your company from potential fraud or embezzlement on the part of any employees. When you make one bad decision hiring someone dishonest, it can take a toll on the business as a whole. The business service bonds are necessary for businesses that have employees who go into customer’s homes. Those employees might steal something and the business can, in turn, be held liable. Businesses that employ caretakers, housekeepers, contractors, and others that go into customer homes need this kind of coverage.
Do You Need Fidelity Bonds?
First, check the requirements your state or federal government has set up for your business type. You might have to have these bonds are a prerequisite for getting a license for your type of business so you can operate legally. For other companies, even if it isn’t a legal mandate, having fidelity bonds can also be a good idea. Customers appreciate businesses who protect them and having these bonds can be a good advertising point. Plus, the bonds really do protect businesses from illegal actions that employees might engage in that can fall back on the company.
Figuring Out How To Get Fidelity Bonds
If you’re ready to look into the details, or you know you want or need fidelity bonds to safeguard your business, contact the professionals at Nickerson Insurance Services for help. No one wants insurance they don’t really need, but you definitely don’t want to be caught without bonds if you legally need them, or might really make good use of them. You never know what’s going to happen, even if you feel you are very careful about who you hire.