In business, trust is essential. Whether you have two employees or employ dozens of personnel, they likely have the keys to a variety of proprietary and financial data to carry out their assigned duties. Fidelity bonds are also growing in popularity due to the rising risk of data breaches. As a result, even small businesses are obtaining fidelity bonds to reduce their exposure. Whether you need a first-party or third-party fidelity bond, the licensed agents at Commercial Insurance Specialists will help you get the surety bond you need at the most competitive rate.
What is a Fidelity Bond?
A fidelity bond is an additional layer of business insurance that protects an employer against losses resulting from the dishonest or fraudulent acts of its employees. Unlike traditional insurance that protects against “acts of God” or accidents, a fidelity bond specifically covers intentional “bad acts” such as embezzlement, theft, forgery, and fraud.
Types of Fidelity Bonds
Not all bonds are created equal. Depending on your industry and who you serve, you may need one or more of the following:
First Party Vs. Third Party Fidelity Bonds
First-Party Bonds protect your business assets from your own employees’ dishonest acts (e.g., an accountant stealing from the company bank account). Third-Party Bonds protect your clients. If the customer reports that an employee committed theft while on their premises, this bond covers the client’s loss if the claim is proven valid. It is commonly used by service providers, IT consultants, and contractors.
Employee Dishonesty Bonds
This is the most common fidelity bond. It provides blanket coverage for a wide range of dishonest acts, including theft of business property, securities, or funds, regardless of which employee committed the crime.
ERISA (401(k)) Bonds
Does your company offer a retirement plan? The Employee Retirement Income Security Act (ERISA) is a federal law that generally requires companies with a retirement plan to have an ERISA bond. The surety protects the plan’s participants and beneficiaries from losses caused by those who manage the plan’s funds and securities.
Business Service Bonds
Service businesses that visit clients’ homes or offices often purchase a business service bond. It provides customers with peace of mind that, if a worker commits an unlawful act, such as theft, they will be compensated by the service provider or the surety company.
Who Needs Fidelity Bonds in Florida
- Financial Professionals: Bookkeepers, accountants, and tax preparers.
- Service Providers: Janitorial services, HVAC contractors, and home health aides.
- Small Businesses: Businesses that maintain sensitive client data or digital assets.
- Non-Profits: Organizations with boards of directors and volunteer staff.
- ERISA Compliance: Any Florida business offering a 401(k) or pension plan.
How Much Does It Cost?
The premium of a fidelity bond is typically a small percentage of the total bond amount. Factors that influence your rate include:
- The number of employees with access to funds.
- The amount of coverage requested (e.g., a $50,000 bond vs. a $500,000 bond).
- The type of industry.
- Your business’s internal financial controls and claims history.
How to Get A Fidelity Bond in Florida
Not sure which fidelity bond you need? Our licensed agents will ensure you get the right surety for your bonding requirements. We shop multiple insurance companies to find the lowest bond premiums in Florida, making the process quick, easy, and affordable. We’re a trusted, locally operated, family-owned independent insurance agency with three convenient office locations throughout Central Florida and the Gulf Coast. Contact us today for a free, no-obligation quote and get the fidelity surety bond you need for less.
