What is a Fidelity Bond
Fidelity bond is not a bond but an insurance policy, which usually enables organisations to be safe from infidelity of their employees like theft, dishonesty etc that can harm the company with money or property loss. A fidelity bond does not cover the accounting errors and mistakes of the employees, job accidents and injuries or wrong decisions.
Fidelity bond is helpful for the persons who have a bad working record in previous companies and has been involved in some type of theft or conspiracy results to resignation from the previous job. It also helps in protecting the company from the harmful intentions of a dishonest employee who can give severe loss to the company by a dishonest act like conspiracy or theft. The coverage of fidelity bond measured on the value of the property lost by the dishonest act. This bond covers the loss of the company and has a quality of protective to the employees having a bad name because of their previous dishonesty and betrayal to their company. The bond ensure the security of the following trustees: Person who has physical contact with money, Person who has Power to transfer money or property, Person who has Power to pay out funds, signs the check or produce the various material for business, the authority of making decisions over any person.
This bond is after all savour for the persons who became helpless because of their past bad deeds. This bond gives them the chance of regenerating the trust, which has lost by them in the eye of their companies. The company insurance agent should be wise enough to determine the insurance needs of the company. If the current insurance plan does not cover the theft or dishonesty act, then it should be removed forever and a new fidelity plan should be adapted for the smooth run of the business. The process that insurance companies use to determine financial responsibility is termed as Underwriting. Various risk factors are reviewed in a part of underwriting including number of person securing money, coverage amount, control system of money handling, audits, the time of existence of the organization and general liability. It is a tool used by the companies to deal with the situation of emergency in terms of money or property. All the big major companies have insurance agents who are experts in the field of insurance. They provide the best fidelity bonds to the multinational companies who are working to create a safe and profitable atmosphere for their business and for their employees. Thus, selecting the best fidelity bond for your company is the right option for you to grow yourself in order to stand different in crowd for future prospectus.