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Guide to Employee Theft Bonds
Ideally, we want our employees to always perform ethically and with serious integrity. However, this is not the reality of many workplaces. There will be employees who may break company trust, act unethically and take advantage of company assets or customers in secret.
Business owners should bond their employees to help protect from possible bankruptcy due to employee theft. To find out more about how employee theft bonds work and the type of employee theft bond you need, keep reading.
Employee Theft Bonds Benefit Your Business
Employee theft bonds, also known as fidelity bonds, yield a number of benefits for a company. These bonds are a great marketing tool for attracting customers, especially if employees work in customer homes. Customers feel more comfortable hiring a business guaranteeing to protect their money and property while on the job.
Recent start-ups can benefit even more from employee theft bonds. A newly founded business typically does not have accumulated wealth, so it would be likely to fail if an employee steals a significant amount of money or assets. An employee theft bond will reimburse the business for their losses, thereby reducing the risk of a business failing due to employee theft.
Employee Theft Bond Types
There are three primary types of employee theft bonds:
Name Schedule Fidelity Bond
This bond covers a designated list (schedule) of employees you provide to the insurance company. Whenever you add or change employees, you simply notify the insurance company. Collecting a claim on this type of employee theft bond requires absolute proof a specific employee on the schedule stole from the business.
Blanket Position Bond
This bond provides blanket protection over certain positions rather than a list of employees. All employees who work in the designated position(s) are covered, and new employees are added automatically. This type of fidelity bond does not require absolute proof that a specific individual committed theft.
Primary Commercial Blanket Bond
This type of employee theft bond covers every employee in your company. Whether one or multiple employees committed theft, you are able to claim a loss for the same amount.
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Although there are different ways you can prevent company loss, (setting up strict job guidelines, checklists and cross verification) an employee theft bond is added security against employees who find ways to cheat the system. Get a free quote for your employee theft bond today.
Bond from the Beginning
Bonding employees the moment they are hired is a good way to find trustworthy workers and filter out candidates that cannot be bonded due to past fraudulent activities.
Although employees do not need to know they are bonded, it is a good idea to let potential candidates know they might be. Employee theft bonds will protect your company from loss due to any employee theft or collusion among employees in high risk job positions.
What are High-Risk Job Positions?
Any employee who has access to valuable company assets could be a potential theft risk. This includes access to automobiles, expensive equipment and of course, cash.
- Accounting: The Sarbanes-Oxley legislation helps protect shareholders from fraudulent accounting practices, but it does not guarantee freedom from the risk of theft through accounting departments. The most experienced accounting workers have been known to cheat the system and embezzle funds through skimming, larceny and even fraud, making accounting jobs high risk.
- R & D: Employees that have access to highly valuable intellectual property also have a high risk job. There are many cases of corporate theft in research and development departments where immoral employees give company secrets to competitors to make a profit.
- Door-to-Door: Plumbers, electricians and even general contractors who work at a client’s residence or office should be bonded to protect from theft and provide clients with peace of mind.