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What Are Fidelity Bonds?

Fidelity coverage can reimburse certain losses when employees steal money or property they handle. If employees manage company funds, customer property or benefit-plan assets, identify each owner and compare the required protection for each interest.

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What Do Fidelity Bonds Cover?

If staff handle company money, client property or benefit-plan assets, dishonest conduct can create losses to different owners. 3

Fidelity bonds and employee-dishonesty policies can help your business recover losses caused by dishonest employees, subject to the limits and terms you buy. 1

Whose 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

InterestAsk the insurer
Your business’s money or inventoryWhich business funds and inventory does this quote protect?
A client’s propertyWhich client property can your workers access, and is it included?
Benefit-plan funds or propertyWhich plan and asset handlers does the bond cover?

Employee Benefit Plans

If you manage an ERISA plan, its fidelity bond protects the plan against loss from fraud or dishonesty by people handling plan funds or property. 2

Who Needs Fidelity Bonds?

Consider fidelity protection when employees handle company funds or client property. Benefit-plan assets need their own bonding review. 4

Fidelity Bonds Coverage Examples

What happened

An Employee Takes Company Funds

An employee transfers company money to their own account without permission.

How coverage may help

Employee-dishonesty protection may reimburse the business. The person and property must fit the policy's definitions, and a limit and deductible may apply. 1,3

What happened

Someone Steals From a Benefit Plan

A person handling your employee benefit plan's funds is accused of stealing them.

How coverage may help

An ERISA fidelity bond protects the plan against fraud or dishonesty. Fiduciary liability is for claims about breaches of responsibility, so it isn't a substitute for the bond. 1,2

How Do You Compare Fidelity Bonds Coverage and Costs?

People Included in the Coverage

Ask how the quote defines covered people, including temporary workers or contractors who matter to your business. 3

Commercial Limits and Retentions

For commercial employee-dishonesty coverage, compare the limit per loss, any overall limit and the deductible or retention. 3

What Exclusions and Conditions Should You Check in a Fidelity Bond?

Discovery, Reporting and Replacement

Ask when a loss must happen or be discovered and when you must report it, especially if you are replacing existing coverage. 3

The Loss and Its Consequences

Check whether the quote addresses only the direct property loss or also costs and business losses that follow it. 3

How Do Fidelity Bonds Compare With Related Coverage?

Fiduciary Liability

Fiduciary liability covers a different risk: alleged breaches of plan duties, rather than dishonest acts that cause a loss. 2

Surety Bonds

A fidelity discussion concerns dishonest acts; a surety bond concerns a guarantee of an obligation to another party. 1

What Do You Need for Fidelity Bonds Quotes?

Prepare the entities and locations to insure, employee information, property at risk, loss history and controls for handling money and inventory. 4

Build an Exposure and Controls Summary

PrepareAsk the broker
Business entities and locationsWhich entities and locations can this protection include?
Employees and other workersWhich people does the policy treat as covered?
Company, client and plan propertyHow does the quote address each owner’s property?
Money and inventory controlsWhat details about your current controls does the insurer need?
Loss historyWhat loss records and follow-up changes should you provide?
4

Fidelity Bonds: Key Terms in Plain English

Direct Loss

The property loss itself, as distinct from indirect costs or business losses that follow it. 3

Frequently Asked Questions About Fidelity Bonds

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

Does an ERISA Fidelity Bond Cover Plan-Management Mistakes?

No. It addresses specified dishonest acts by people handling plan assets; fiduciary liability addresses claims alleging breach of plan duties. 2 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

Is an ERISA Bond Required?

ERISA generally requires bonding for people who handle an employee benefit plan’s funds or property, subject to exceptions.

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Is Fiduciary Liability Insurance Required?

ERISA generally does not require fiduciary liability insurance, but it may require a separate bond for people handling plan assets.

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What Is Fiduciary Liability Insurance?

Fiduciary liability insurance covers certain claims alleging mishandling of duties connected with an employee benefit plan.

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Does Fiduciary Liability Cover 401(k) Plans?

Fiduciary liability may cover certain claims involving a 401(k) if the plan and insureds meet the policy definitions.

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Does Fiduciary Liability Cover Benefit Plan Mistakes?

Fiduciary liability may cover negligent benefit-plan administration, but routine corrections or amounts owed by the plan may fall outside coverage.

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Does Fiduciary Liability Cover Breach of Fiduciary Duty?

Fiduciary liability is designed to cover certain claims alleging benefit-plan fiduciary breaches, subject to the policy’s terms.

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Does Fiduciary Liability Cover ERISA Lawsuits?

Fiduciary liability may cover some ERISA lawsuits alleging a covered wrongful act, but not every claim or remedy.

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Does Fiduciary Liability Cover Excessive Fee Lawsuits?

Fiduciary liability may cover an excessive-fee lawsuit alleging imprudent plan management, subject to policy terms and treatment of restitution.

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View all 27 questions

What Coverage Is Related to Fidelity Bonds?

  • What Is Fiduciary Liability Insurance?

    Fiduciary liability can protect your company and plan fiduciaries when participants claim mishandling of an employee benefit plan. If you sponsor a retirement or health plan, check who is insured and whether both administration errors and fiduciary-breach claims are addressed.

  • What Is Crime Insurance?

    Crime insurance can help reimburse specified business losses from theft and fraud, including employee theft and forgery. Compare those protections separately and ask whether a payment sent after an impersonation scam is covered.

  • What Are Surety Bonds?

    A surety bond guarantees that your business meets a specific obligation to a customer, contracting party or government agency. If a contract, license or permit requires one, get its exact form and amount; a bond is not insurance for your own losses.

Fidelity Bonds Guides by State

Which Insurance Providers Offer Fidelity Bonds?

  • AIG

    AIG Crime and Fidelity product page; line membership is based on the named fidelity/bond product family, not a specific bond form.

  • Beazley

    Beazley offers fidelity bonds for financial institutions.

  • CNA

  • Coverdash

    Coverdash lists fidelity bonds for client losses from employee dishonesty on its surety-bond page.

  • Founder Shield

    Founder Shield lists ERISA fidelity bonds among its specialized coverages.

  • Gallagher

    Gallagher arranges fidelity bonds.

  • Heffernan Insurance Brokers

    Heffernan arranges employee dishonesty bonds.

  • HUB International

    HUB International arranges crime and fidelity coverage through its professional and executive risk practice.

  • Insureon

    Insureon markets Fidelity Bonds; description does not establish insurer, policy terms, or individual availability.

  • Liberty Mutual

    A group brand spanning personal and commercial insurance businesses; its business unit pages describe small-commercial cover for small businesses and commercial, specialty, surety, and reinsurance solutions for mid-size and large businesses.

  • Marsh

    Marsh McLennan Agency (MMA), a Marsh business, arranges commercial crime and fidelity coverage.

  • Newfront

    Newfront lists fidelity and crime among its executive-risk brokerage coverages.

  • TechInsurance

    TechInsurance arranges fidelity bonds addressing employee theft from clients.

  • The Baldwin Group

    Baldwin’s professional-services coverage snapshot lists commercial crime/fidelity bond; it does not specify bond terms or eligibility.

  • Travelers

    Travelers offers ERISA fidelity bonds.

  • Vouch

    Vouch lists fidelity bonds among its core protections for financial-services businesses.

  • Zurich U.S.

    Zurich markets ERISA fidelity bond options; this product page identifies Zurich American Insurance Company as underwriter and states approved-state availability.

Updated .

Spot, a product of Tools for Enlightenment, publishes this research and works in the commercial insurance market. Editorial policy. To suggest a correction, contact Spot with the page URL and supporting source.

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