Fidelity bonds help you protect your business against monetary losses due to dishonest employees. If an employee steals something from your business or damages client property, you can receive compensation through a fidelity bond to cover the losses. Having this protection can help your business look more reputable and trustworthy to investors.
What is the Value of a Fidelity Bond?
The value of a fidelity bond is based on value of the property at risk. The financial coverage of the bond can be for as little as one employee, or for your entire workforce. It’s important to note that fidelity bonds are different from contract bonds. Contract bonds guarantee financial compensation to a client if the obligations in a contract are not met by your company.
How to Get a Fidelity Bond
To get a fidelity bond, you first need to find a financial institution that sells them. These are insurance products, so you might want to first check with any of the insurance companies your business currently deals with. You can also use online search engines to find providers in your area and industry.
Ask the provider for a quote. The provider might ask different questions about your business, but you’ll probably need to provide your company’s annual income figures and number of years in business. If you like the quote, you sign the deal and get your fidelity bond. You probably want to shop around a bit and get a few quotes before making a final decision.
Why is a Fidelity Bond Required?
A fidelity bond is a type of insurance that protects your small business against losses caused by acts of fraud or dishonesty. Having a fidelity bond puts a plan in place against any employee who commits fraud or is dishonest.
You can expect your business to look more trustworthy and reputable when using fidelity bonds. Plus, it’s likely that your clients will have increased confidence in you and have greater satisfaction with your work, which might lead to more client testimonials for your marketing.