Fidelity Insurance Indemnifies Employers Against Loss Of Money As A Result Of

Fidelity Insurance Indemnifies Employers Against Loss Of Money As A Result Of: Understanding the Basics

Fidelity insurance, also known as fidelity bond, is a type of insurance that protects employers from loss of money or property resulting from fraudulent or dishonest acts of their employees. This coverage is specifically designed to protect companies against financial losses due to employee theft, embezzlement, forgery, or other related crimes.

The main purpose of fidelity insurance is to provide financial protection to employers against employee theft, which is a serious concern for many businesses. According to the Association of Certified Fraud Examiners, employee theft accounts for more than 40% of all corporate fraud cases, resulting in billions of dollars in losses for businesses every year.

Fidelity insurance can be purchased as a standalone policy or as part of a comprehensive insurance package. It is typically offered to businesses of all sizes, from small, family-owned companies to large corporations. Policy limits vary depending on the size and type of business, as well as the level of risk involved.

How Does Fidelity Insurance Work?

Fidelity insurance policies are designed to indemnify employers against financial losses resulting from employee dishonesty or fraud. The policy typically covers losses that occur during the policy period, which is usually one year. Some policies may provide coverage for losses that occurred before the policy was purchased, but this is usually limited to a specific period of time.

To file a claim under a fidelity insurance policy, the employer must provide evidence of the theft or fraudulent act committed by the employee. This may include police reports, financial statements, and other documentation that proves the loss occurred. The insurance company will then investigate the claim and determine the amount of the loss covered under the policy. The employer may be required to pay a deductible before the policy coverage kicks in.

Fidelity insurance policies may also provide coverage for legal fees and other expenses associated with investigating and prosecuting the employee. This can be beneficial for employers who want to pursue legal action against the employee to recover their losses.

Types of Fidelity Insurance Coverage

There are several types of fidelity insurance coverage available, each offering different levels of protection for employers. Some of the most common types of fidelity insurance coverage include:

1. Employee Dishonesty Coverage – This type of coverage protects against losses resulting from employee theft or embezzlement. It is typically the most basic type of fidelity insurance coverage.

2. ERISA Bond Coverage – This coverage is specifically designed to protect employers who sponsor employee benefit plans, such as 401(k) plans and pension plans. It is required by law for most employee benefit plans.

3. Financial Institution Bond Coverage – This coverage is designed for banks and other financial institutions to protect against losses resulting from employee theft or fraud.

4. Public Official Bond Coverage – This coverage is designed for public officials, such as elected officials or government employees, to protect against losses resulting from dishonest or fraudulent acts.

5. Cyber Liability Coverage – This coverage protects against losses resulting from cyber attacks or data breaches caused by employees or third-party vendors.

Benefits of Fidelity Insurance Coverage

Fidelity insurance coverage offers several benefits to employers, including:

1. Financial protection – Fidelity insurance coverage provides financial protection to employers against losses resulting from employee dishonesty or fraud.

2. Peace of mind – Knowing that there is a policy in place to protect against employee theft can provide peace of mind to employers.

3. Legal protection – Fidelity insurance coverage may provide legal protection to employers who want to pursue legal action against the employee to recover their losses.

4. Compliance – Some types of fidelity insurance coverage, such as ERISA bond coverage, are required by law for certain types of employee benefit plans.

Conclusion

Fidelity insurance is an essential type of insurance coverage for employers who want to protect themselves against losses resulting from employee theft or fraud. It provides financial protection, peace of mind, and legal protection to businesses of all sizes. While it is not a guarantee against employee theft, it can help mitigate the financial impact of such losses. If you are interested in purchasing fidelity insurance coverage for your business, it is important to work with an experienced insurance agent who can help you determine the right type and level of coverage for your needs.