Unfortunately, we don’t live in a perfect world. Employees steal, businesses suffer, and money is lost. Luckily, there is a way to protect your business from unethical employees. Dishonesty and business service bonds help protect your business when you encounter employee theft.
It’s useful to think of the two bonds as providing internal and external protection. Dishonesty bonds are protection for when employees steal from you, while business service bonds are a form of insurance if employees steal from clients. Let’s dive deeper into what these two bonds actually do and how they differ.
Employee Dishonesty Bonds
A dishonesty bond, also known as an employee theft bond, protects against employees stealing company assets. Assets can range from physical or intellectual property to company funds. This bond will reimburse the company if theft occurs, which helps decrease the risk of theft being the cause for a business failure.
Employee theft bonds add an extra layer of assurance for the company. There are three types of employee dishonesty bonds, so you can get one that fits your specific needs.
Types of Dishonesty Bonds for Businesses
Name Schedule Fidelity Bond
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- Coverage: This bond covers a specific list of employees. You can add or remove the employees that it covers as your needs change.
- Claims Process: You must provide absolute proof, typically via a court decision, that a theft occurred to collect a bond claim.
Blanket Position Bond
- Coverage: This bond protects specific positions rather than individual employees. New employees in these high-risk positions are added automatically upon hiring.
- Claims Process: You do not need absolute proof to collect on this bond. The surety will investigate and validate claims.
Primary Commercial Blanket Bond
- Coverage: This bond covers all employees of the company.
- Claims Process: Under this bond, you can claim the same amount regardless if one or multiple employees committed theft.
Your bond amount and premium rate will vary depending on your business size, bond type, and coverage needs.
Dishonesty Bond Types
Business Service Bond
While a dishonesty bond protects your business from internal theft, a business service bond protects your clients if an employee steals or damages property while at their personal residence or business location. The business service bond is typically recommended for service-based companies and may be a contractual requirement for larger projects.
These bonds are quite affordable and can be purchased online in minutes. If your employees frequently work in clients’ homes or businesses, a business service bond is a good idea to protect both you and your clients.
Common small businesses that use this bond include caterers, painters, lawn care providers, housekeepers, and security guards.
Business Service Bond Coverage Amounts
Business service employee dishonesty bonds also have various amounts depending on the work you do. A good rule of thumb is that the larger the residence you work in, the larger your bond amount. For example, a $10,000 bond is typically recommended for residential work. However, if you work in large offices, banks, or hospitals, you may need a $25,000 to $50,000 bond.
Business Service Bond Recommendations
Don’t worry! You’ll only pay a small percentage of the overall bond amount. For instance, the $10,000 bond costs $125, and the $50,000 bond costs a flat rate of $250.
Buying Your Dishonesty or Business Service Bond
Purchasing either or both of these bonds protects your company from losses due to employee theft. It also assures your customers that you are taking the proper precautions in case of employee misconduct.
You can purchase your dishonesty bond or business service bond at SuretyBonds.com.
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