How to Shop for a Fidelity Bond
Fidelity bonds, also known as blanket bonds, protect policyholders against losses. A fidelity bond is an insurance policy that protects employers from dishonest employees who commit fraudulent acts against a company. Searching for bonds in this competitive market is challenging, but finding the right agent or broker is the key to obtaining good advice.
- Difficulty:
- Challenging
Instructions
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Determine the amount of coverage needed by defining your objectives, number of individuals with control of money and losses to the company within the last 5 years. Note the risks, as premium costs are determined by the amount of risks.
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Do independent research. This is a good choice before deciding on a carrier to underwrite the bond. Research fidelity bonds that are rated high--four or five stars. Use a rating agency that offers critical reviews and specific information on bond issuers.
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Use a general liability insurance carrier, a major casualty carrier or specialized bonds company to obtain information on fidelity bonds. You can find agents and independent in the yellow pages or on the Internet.
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Research the carrier's performance record. Examine their strengths and weaknesses and their financial ability.
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Make sure the coverage is equal to or greater than the amount of the bond. Note the length of the contract and make sure the policy adapts to the needs of your business.
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Tips & Warnings
Popular sites to research bond ratings are Morningstar, Fitch, Standard & Poor's (S&P) and Moody's.
