As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Written By Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Lead Editor, Insurance Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
| Deputy Editor, Insurance
Updated: Dec 22, 2023, 5:15am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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Small businesses always look to hire the best employees. But no matter how carefully you screen workers, it is possible to end up with a bad apple or two.
In a worst-case scenario, untrustworthy workers can engage in unethical behaviors that cost your business or your clients money. You can cover such losses by purchasing a fidelity bond.
A fidelity bond covers your business for the types of fraudulent employee actions that are detailed in the terms of the bond, such as employee dishonesty. The fidelity bond should clearly spell out how much reimbursement would be provided after such fraudulent behavior occurs and the company makes a claim against the bond.
With fidelity bonds, you can cover specific employees or job positions with a schedule fidelity bond. The other option is to cover all employees with a blanket bond. A blanket bond offers the same amount of coverage for all employees. Schedule bonds provide specific coverage for each job position or individual employee listed in the policy.
When filing a fidelity bond claim, follow the rules set by the company that sold you the bond. As a general rule, you will likely be asked to explain what happened and why you’re filing a claim. You likely will be asked to furnish important documentation that supports the claim, such as a police report.
A claims adjustor likely will be assigned to the case and will ask you for any additional information that is required.
Small businesses pay a median fidelity bond premium of $88 per month or $1,055 per year, according to Insureon.
Among Insureon customers:
The cost of a fidelity bond is mostly determined by your policy limit. A more expensive policy limit yields a higher price. The amount of sensitive information that your company handles and how many employees have access to that information also impacts the cost of a fidelity bond.
Fidelity bond policy limits vary widely. There are policies with limits as low as $5,000 and there are policies with limits as high as $10 million. According to Insureon, 56% of customers choose fidelity bonds with a $1 million limit.
A deductible is the amount deducted from a claim payment. The deductible you choose influences your costs.
Deductibles on fidelity bonds can be as high as $150,000, but more common deductibles are $10,000, $25,000 and $50,000.
Choosing a higher deductible typically saves money when purchasing your fidelity bond. Each business must weigh these savings against the risk of having a lower payout if you need to file a claim.
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