Fidelity bonds, also known as Employee Dishonesty Bonds, Janitorial Services Bonds, or Business Services Bonds (depending on your type of business) cover theft of your client’s property, money, or securities while on the client’s premises.
These bonds are usually not required by and specific entity but it is a great coverage to have if you will be on your client’s premises. Many homeowners and business owners who hire you will feel more comfortable if you have a fidelity bond covering you and your employees while you are in their home or on their premises.
The bonds typically contain a “conviction clause” meaning the employee must be convicted of the theft in court before the bond will pay out. This protects you as a business owner from false accusations and unjust claims.
The Employee Retirement Income Security Act of 1974 or “ERISA” was enacted by the U.S. Department of Labor and is a form of insurance that protects the plan against losses caused by acts of fraud or dishonesty by persons who handle plan funds or property. The bond is required for person to receive, disburse, or otherwise exercise custody or control of plan funds or property. If you have a qualified employee benefit plan that is not otherwise exempt, you will need to purchase an ERISA bond.
Per ERISA requirements, plans must be bonded at 10% of the total plan amount up to $500,000. Any non-qualified assets such as employer securities must be bonded at 100% of their total value up to $1,000,000.
This coverage is not to be confused with Fiduciary Liability Insurance which insures the fiduciaries of plan from such claims such as improper advice or council, mismanagement of funds, conflict of interest, and other administrative errors. Fiduciary Liability is not required by the Employee Retirement Income Security Act of 1974.