Business Resource Center

A Wealth of Knowledge at Your Fingertips

Home > Business Insurance

Font Adjust: A | A | A

Fidelity Bonds for Small Businesses

Fidelity Bonds for Small Businesses

If your small business handles cash, or collect payments on behalf of your customers, fidelity bonds should be an important part of your company's insurance protection.

For example, if a trusted employee steals money, items, information or other valuable assets from your business or a customer, a fidelity bond will provide protection from the financial consequences of that loss.

Fidelity bonds may be required in some customer contracts before they a client will allow your company or employees to provide services, such as a property manager who collects rents on behalf of a building owner.

The cost of a fidelity bond will vary according to several factors, such as:

  • The type of work your small business conducts
  • The clients you serve
  • The amount of assets that may be involved
  • The size of your firm
  • Any previous losses.

Several types of fidelity bonds are available to small business owners:

Business services bonds provide protection for the loss of customer funds, equipment, supplies or personal belongings caused by your employee's theft on a customer's premises. This type of bond is typically used by contractors, businesses that provide custodial services, and other firms that need off-hours access to customer facilities.

Employee dishonesty bonds protect small businesses against financial loss resulting from employee fraud or theft, equipment, or other property owned by your small business.

Services providers may also wish to consider fidelity bonds if their employees have access to clients' financial information, customer records or IT resources. Any inappropriate access or misuse of sensitive client information, are among the exposures that can be covered with a fidelity bond.

If your company handles customer assets or accesses their facilities, a fidelity bond can provide important protection against loss and peace of mind for you as the business owner.

This website and the articles contained within are provided as a free service to you and for general informational purposes only. Information on this website is not intended to provide legal, accounting, tax or other advice. Please consult your attorney, accountant, or financial or other advisor with regard to your individual situation. We also make no warranty or representation regarding, and do not endorse, any linked websites or the information appearing there.
© 2018 Small Business Resources.