Understanding Fidelity Bonds and Crime Policies

Businesses must employ insurance to protect themselves against all types of potential losses and liabilities. Fidelity bonds & crime policies are complementary types of insurance that offer diverse protection against criminal activities against, and in some cases by entities within, your business.

What Is a Fidelity Bond?

A fidelity bond is a type of business insurance in which the employer is protected against losses caused by fraudulent or criminal actions of an employee or employees. Examples of acts covered by fidelity bonds include:

  • Embezzlement
  • Larceny
  • Theft
  • Misappropriation
  • Wrongful conversion
  • Willful misapplication

What Are Crime Policies?

Crime policies should cover financial losses related to forgery, robbery, electronic crimes or employee theft. It also covers non-employee-related crimes, including:

  • Receiving counterfeit money
  • Fraudulent electronic transfers
  • Theft or destruction of money, property or securities
  • Computer hacking resulting in loss of funds to an outside account

How Do Fidelity Bonds & Crime Policies Relate?

Both types of policies protect against crimes committed against a company. While fidelity bonds aim to hold employees accountable for fraud, theft or another crime, crime insurance reimburses the company’s financial losses created by the crime, so long as it is covered by the company’s policy.

Businesses must protect themselves against criminal elements. Sometimes these elements come from within. Fidelity bonds and crime policies aim to cover all angles of fiduciary crime.