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Businesses trust their employees to responsibly handle funds and assets, but sometimes a little extra assurance is needed. Fidelity bonds may give Vermont businesses the added assurance that they need.
Fidelity bonds are special insurance products that help protect against employee theft or misconduct that results in significant financial loss. The bonds might protect financial or other assets.
ERISA generally requires businesses with pension plans to have fidelity bonds, and Vermont legislation may require bonds when hiring fiduciaries. Bonds can be purchased even if not required.
Businesses that have pension plans, employ fiduciaries or have significant assets can get guidance by talking with an agent who specializes in bonds. A knowledgeable agent will be able to review a business’s situation and make any appropriate bond recommendations.
Fidelity and surety bonds are often grouped together when discussing these products, but they provide distinct protections:
Businesses can purchase several different types of fidelity insurance bonds, each of which is designed for particular risks and situations. Three of the more common types of fidelity bonds are:
Most dishonest bonds provide either blanket coverage or scheduled coverage. Blanket coverage usually covers all employees for the same amount and is often used by large businesses and businesses with high employee turnover. Scheduled coverage usually covers specific employees for different amounts, and is often used when employees have varying levels of responsibility.
An insurance agent who specializes in bonds can help businesses find ERISA, business service and dishonesty bonds that provide the terms needed for a situation.
Businesses most often purchase fidelity insurance bonds, but they are frequently also available to fiduciary and other employees. Employees might want to purchase their own bonds so that they’re well protected. This is something that an experienced agent can assist with.
Professionals who work as independent contractors typically can’t purchase fidelity insurance bonds, even if they take on fiduciary responsibilities.
Because fidelity insurance bonds offer fairly specialized protection, premiums for these are typically quite affordable for the amount of protection they provide. The amount of protection purchased, deductibles chosen and number of employees normally influence premiums.
An independent agent who assists with bonds can help businesses compare what rates different insurance companies will offer.
For help purchasing a fidelity insurance bond, contact the independent insurance agents at Paige & Campbell Insurance. Our agents have assisted many Vermont businesses with fidelity bonds, and we’re ready to help you too.