Fidelity Bonds (Crime Coverage)
A fidelity bond is a type of financial instrument that guarantees the performance of a fiduciary, who may be in a position of public or private trust relative to money.
Another term for fidelity bond is crime coverage, as it insures against money being taken from a company both within and from outside the organization.
Fidelity or crime coverage includes:
- Employee Dishonesty
- Check Alteration
- Wire Transfer Fraud
- Other External Threats
If you have a 401k plan you probably also have ERISA coverage, a subset of fidelity and employee dishonesty protection.
One way to take advantage of underwriting expertise is to use the carrier’s questions on a Crime application as a starting point for putting together your financial protocol.
Important update: Cyber crime has surpassed the traditional check writing scheme by a wide margin over the past few years. “Social engineering” refers to today’s version of an old-fashioned grift. Criminal digital theft is the fastest growing criminal enterprise in the world, so having dual authorization for funds transfer, and being highly aware – at all levels of the organization – of efforts to part a business from its money is more important today that ever. A robust employee training program in coordination with your IT partners should be a critical part of any company’s strategy.