fidelity bond

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Fidelity bond

Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Blanket Fidelity Bond

A bond or insurance policy covering a company in the event it loses money as the result of employee theft or fraud. It is important to note that blanket fidelity bonds generally only cover situations in which an employee commits fraud for personal gain; it does not cover situations in which the employee, without support or knowledge of management, falsifies trading so that it makes the company appear healthier than it is. The Federal Bonding Program, run by the Department of Labor, insures or guarantees the insurance of ex-offenders whose employment adds significant risk of theft or fraud. The SEC requires brokerages to be covered by a blanket fidelity bond. See also: Bonding, Operational Risk.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

fidelity bond

Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

fidelity bond

A special insurance policy that covers losses caused by dishonest employees. Property management companies and others with employees who handle money belonging to clients should generally obtain fidelity bonds.Also called a surety bond.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
Brian Smith, Segal Select Insurance Services Inc's COO, said, 'As the premiere fiduciary insurance and fidelity bond broker in the Taft-Hartley market, this acquisition expands our core clientele and further increases Segal Select's West Coast presence.
A fellow insurance-coverage nerd questioned my recommendation that the ERISA-required fidelity bond coverage for employee benefit plans be combined with the firm's employee dishonesty or employee theft coverage.
One reason that fidelity bonds have such low premium-to-payout ratios is that the bond policies are complicated and somewhat ambiguous.
Meanwhile, only 42 percent of companies responding to the E&Y survey reported taking out fidelity bonds in 2000, up from 36 percent two years earlier.
This raises insurability questions, particularly in the area of fidelity bonds."
The court observed that the term "dishonest" in relation to fidelity bonds has been interpreted to mean acts that are manifestly unfair to the employer and that subject the employer to potential loss.
And finally, we review some specific shortcomings found in many of the fidelity bonds available.
Furthermore, an employer can protect themselves with insurance and fidelity bonds, which would ameliorate the losses.
Fidelity bonds. Most new business owners are unaware that, on the average, thefts by employees far surpass business losses from burglary, robbery, and shoplifting.
Fidelity bonds provide coverage for employee dishonesty therefore protecting both the contractor and the owner.
* Require clients to post fidelity bonds for client employees who have access to company funds.

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