What Are Fidelity Bonds?
Fidelity bonds and employee-dishonesty coverage protect against specified losses caused by dishonest employees or people handling plan assets.
What Do Fidelity Bonds Cover?
Fidelity bonds and employee-dishonesty policies address losses caused by dishonest employees, within the limits and terms purchased. 1Whose Property Is at Risk?
Identify whose property you want protected. Your company's cash, a client's equipment and an employee benefit plan's assets belong to different interests. If employees handle all three, have the quote identify the protection for each rather than relying on one employee-dishonesty amount. 3
| Interest to discuss | Information to bring to the quote conversation |
|---|---|
| Your business’s money or inventory | What employees handle and which entities own it |
| A client’s property | What your workers can access while performing their work |
| An employee benefit plan’s funds or property | The plan involved and the people handling its assets |
Employee Benefit Plans
An ERISA fidelity bond protects the plan against loss from fraud or dishonesty by people handling plan funds or property. 2Who Needs Fidelity Bonds?
Consider fidelity protection when employees handle company funds or client property. Benefit-plan assets need their own bonding review. 4
Coverage Examples
These are examples, not coverage guarantees. Your policy terms and the facts of the claim determine what is covered.
What happened
An Employee Takes Company Funds
An employee transfers company money to their own account without permission.
What happened
Someone Steals From a Benefit Plan
A person handling your employee benefit plan's funds is accused of stealing them.
How Do You Compare Coverage and Costs?
People Included in the Coverage
Ask how the bond or policy defines the people whose dishonest acts are covered, including temporary workers or contractors relevant to your business. 3Commercial Limits and Retentions
For commercial employee-dishonesty coverage, compare the limit for a loss, any overall limit and the deductible or retention. 3What Exclusions and Conditions Should You Check?
Discovery, Reporting and Replacement
Ask when a loss must occur or be discovered and when it must be reported, especially when replacing existing coverage. 3The Loss and Its Consequences
Check whether the quote addresses only the direct property loss or also costs and business losses that follow it. 3How Does It Compare With Related Coverage?
Fiduciary Liability
Fiduciary liability insurance addresses breaches of fiduciary responsibilities; it is different from fidelity protection for dishonest acts. 2Surety Bonds
A fidelity discussion concerns dishonest acts; a surety bond concerns a guarantee of an obligation to another party. 1What Do You Need for a Quote?
Prepare the entities and locations to be covered, employee information, the property at risk, loss history and the controls used to handle money and inventory. 4Build an Exposure and Controls Summary
- List the business entities and locations you want included.
- Describe the employees and other working relationships relevant to the protection requested.
- Separate company property, client property and plan assets.
- Explain how the business handles money and inventory, including the controls actually in use.
- Assemble the available loss history and explain any changes made afterward.
Key Terms in Plain English
ERISA Fidelity Bond
Protection for a benefit plan against fraud or dishonesty by people handling its funds or property. 2
Direct Loss
The property loss itself, as distinct from indirect costs or business losses that follow it. 3
Frequently Asked Questions
Is a Fidelity Bond the Same as a Surety Bond?
No. Fidelity protection concerns dishonest acts. A surety bond guarantees an obligation your business owes to someone else. 1
What Does an ERISA Fidelity Bond Protect?
It protects the plan against fraud or dishonesty by people handling plan funds or property. 2
Can a Fidelity Bond Protect a Client’s Property?
It can, if client-property protection is included. Check whether the bond protects your business, a client’s property or an employee benefit plan; those are separate interests. 3
Does Fidelity Protection Include Temporary Workers and Contractors?
That depends on how the bond or policy defines the people whose dishonest acts are covered. Tell the broker which temporary workers and contractors handle money or property, and check those relationships against the wording. 3
Which Insurance Providers Offer Fidelity bonds?
Sources
- Glossary of Insurance Terms. National Association of Insurance Commissioners; Fidelity; Surety Bond. Accessed 2026-09-16.
- Field Assistance Bulletin No. 2008-04: Guidance Regarding ERISA Fidelity Bonding Requirements. U.S. Department of Labor, Employee Benefits Security Administration; Q1–Q3 pp.2–3; Q2 pp.2–3. Version: November 25, 2008. Accessed 2026-09-16.
- Crime Terms and Conditions. Travelers Casualty and Surety Company of America; I.A.1–3 p.1; III.S pp.8–9; V.B.1–2 pp.18–20; CRI consideration p.1; III.P p.8; V.A.3 pp.16–17; V.A.4 p.17; V.B.3 p.20; IV.L p.15. Version: CRI-3001 Ed. 01-09. Accessed 2026-09-16.
- Commercial Crime Coverage Application. Travelers Casualty and Surety Company of America; I–III p.1; VI pp.2–3; XI p.4. Version: CRI-1100W-IND Ed. 01-09. Accessed 2026-09-16.
- Crime and Fidelity. Beazley; What we offer: Commercial Crime (commercial companies) and Financial Fidelity Bonds (financial institutions); fraudulent instruction condition. Accessed 2026-09-16.
- Surety Bonds. Coverdash; Types of Coverage: license/permit, contract, court and fidelity bonds; FAQ on reimbursement to surety; Get a quote. Accessed 2026-09-16.
- Coverage. Founder Shield; Core Coverage: Crime Insurance, Cyber Liability, Directors & Officers, Employment Practices Liability, Fiduciary Liability, General Liability, Property Insurance; Specialized Coverage: Digital Asset Insurance, ERISA Fidelity Bond, Hired & Non-Owned Auto, Intellectual Property, Key Person & Contract Frustration, Last-Mile Delivery Insurance, Transit & Transportation; product cards: Errors & Omissions, Product Liability, Representations and Warranties, Umbrella Insurance, VCAP, Virtual Care & Telehealth Insurance, Workers Compensation; Health & Benefits: Employee Health & Benefits; Get a Quote and Learn More links. Accessed 2026-09-16.
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- Home Care Business Insurance. Heffernan Insurance Brokers; We offer comprehensive coverage for: workers’ compensation, general and professional liability, EPL, owned auto, Non-owned and Hired Auto, Crime–Third Party Theft, Employee Dishonesty Bond, cyber, medical billing E&O and property; home-care, home-health and hospice program audience. Accessed 2026-09-16.
- HUB ProEx. HUB International; Professional & Executive Risk practice: EPL, fiduciary, crime/fidelity, K&R; ProEx Coverages: Executive Liability; Cyber, Technology E&O, and Intellectual Property; Financial Institutions; certificates of insurance; claims and legal support; carrier-premium figure; FAQ on management liability and ProEx program structuring. Accessed 2026-09-16.
- Expert Executive and Professional Liability Insurance | MMA. Marsh McLennan Agency; Executive and Professional Liability introduction; Our policies include (D&O, E&O, EPL, commercial crime/fidelity, cyber, fiduciary, media, IP, kidnap and ransom); D&O, Employment Practices Liability and cyber subsections. Accessed 2026-09-16.
- Executive Risk. Newfront; Key Coverages to Protect Your Business: Directors and Officers (D&O) for private and public companies, Errors and Omissions (E&O), Employment Practices Liability Insurance (EPLI), Fiduciary, Fidelity and Crime, Kidnap & Ransom; Committed to Client Advocacy: integrated claims and coverage negotiation; Industry-Leading Technology; Executive Risk Solutions Practice Leader description of management liability lines; brokerage footer. Accessed 2026-09-16.
- Small Business Insurance. TechInsurance; Top recommended small business insurance policies; Specialized coverage for unique risks. Accessed 2026-09-16.
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- Management and Professional Liability Insurance. Travelers; Management & Professional Liability product selection: D&O, EPL, ERISA fidelity, E&O, fidelity and crime, fiduciary, kidnap and ransom; stand-alone or suite; private, public, nonprofit and financial institutions. Accessed 2026-09-16.
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