Fidelity bonds are important for businesses

Many companies will bond their employees. A fidelity bond in California is a safeguard against a significant financial loss that can be proven was the result of certain actions taken by employees. The fidelity bond is something that the employer can arrange with his insurance company or an agency involved in issuing bonds of all sorts. If the company suffers a monetary loss and it can be verified that a bonded employee is at fault and the terms of the bond cover the circumstances of the loss the company can claim against the fidelity bond, using the proceeds to offset the loss incurred.

A fidelity bond in California is seen by the business owner as an important form of insurance, the terms can be designed to cover a number of possible scenarios. One of the most common events that can happen is that core employees who have access to the company’s financial records devise a scheme to embezzle funds. The fidelity bond also provides compensation in the event an employee steals company property and provides protection in the event the actions of an employee causes harm of some sort to a fellow employee.

Although there may be a number of scenarios where a fidelity bond can help, the primary purpose is to protect the employer from losses should a covered employee create or be involved in an action that will result in financial harm to the company. There are limits placed by the insurance or bonding company on just how much loss will be covered, the cost of the bond is based on the covered amount per employee.

When an employee’s actions have caused financial loss, it must be proven. It does not matter if the theft was cash from the till or an exotic scheme with duplicate ledgers that make it appear that theft is not happening. Most fidelity bonds will not compensate the business owner for the loss unless the errant employee is charged with the crime in the court. In this way, it is a jury that decides whether the internal theft was legitimate or not. If the employee is found guilty the surety company will know exactly what the financial loss to the company was.

A Fidelity Bond in California is taken out on key employees who have the ability to harm the finances of the company. If you need this form of insurance you are invited to contact.

Be the first to like.