Fidelity Insurance & Crime Insurance

Traditional property policies can sometimes cover small claims for theft, employee dishonesty, forgery, and alteration. These policies often cap the coverage at $25,000 or $50,000 per incident. Similarly, cyber policies can sometimes cover social engineering fraud, funds transfer fraud, and computer system fraud up to a certain limit. It is standard to see a maximum coverage limit of $100,000 or $250,000 for these losses within a cyber policy.

Fidelity or crime coverage is often written as a bond policy and can offer higher limits for these types of claims. There are a few different types of these bonds:

Employee Dishonesty Bonds

Employee dishonesty bonds protect a business from theft or dishonest acts by internal staff including stolen funds and forged checks. These can also include the social engineering fraud, funds transfer fraud, and computer system fraud coverages. Certain types of businesses, such as registered investment advisory firms, purchase bonds with cyber-related coverage to meet compliance with third party requirements. For example, certain brokerages require investment advisory firms who use their platform to have a minimum amount of cyber-related coverage (ex: $1,000,000). It is often easier and more cost effective for the individual firm to purchase a bond instead of excess cyber insurance in order to meet the limit requirements.

Business Service Bonds

Business service bonds are designed to protect a company if they regularly send employees to their clients’ locations and are concerned about their staff stealing customer property or assets. Companies who purchase this type of bond can include appliance repair firms, carpet cleaners, food caterers, general repair services, and home photographers.

Employee Retirement Income Security Act (ERISA) Bonds

Employee Retirement Income Security Act (ERISA) bonds are available to meet federal requirements for businesses with retirement plans. Companies with retirement plans are required to have an ERISA bond covering a percentage of the assets within the offered plan (typically 10%). These bonds are often written on a 3-year policy and provide automatic increased limits to maintain compliance if the plan assets grow significantly in a short period of time.