This review list is being supplied to you in order to inform you about the document in question and to assist you in preparing it for submission. A Fidelity Bond is a simple device that may be used for a variety of bonding applications.
- Make numerous copies of the document. Give one to each person who signs the
document.
Fidelity Bonds
A Fidelity Bond is a type of insurance bought by an employer. It is a form of insurance protection that covers policyholders for losses that they incur as a result of fraudulent acts committed by employees which are not generally covered under normal theft circumstances. The insurance may be blanket bonds which apply to all employees or bonds for each employee on an individual basis. There are a few businesses (brokers, cash carriers, and security firms) which are required by law to acquire fidelity bonds.
There are two types of fidelity bonds: the first-party fidelity bonds and the third-party fidelity bonds. The First-party fidelity bond protects the business against intentionally wrongful acts committed by employees such as theft. A Third-party fidelity bond protects businesses against intentionally wrongful acts committed by the people who are working for them on a contract basis such as Lawyers.
The person who must be bonded is anyone deemed to be “handling” property of a plan or funds and could cause a loss of property or plan funds due to an act of dishonesty or fraud. Generally, anyone who has physical contact with cash or checks, power to transfer funds or negotiate plan property, authority to sign checks, and others related.
In the general sense, a bond amount equivalent to at least 10% of the amount he or she handles and must not be less than the amount of $1,000 or more than the amount of %500,000 or $1,000,000 for plans that hold employer securities. A Fidelity Bond is a straightforward document for binding purposes and a review list is provided to assist you in preparation and inform you about the document.
Fidelity Bond
Fidelity Bond
We, ____________________, as PRINCIPAL, and ___________________________, a surety company authorized to issue these bonds, as SURETY, are held and bound to __________________________ in the sum of $ ______ (____________ & _______/100 dollars) and the legal successors of __________________________, for which we bind ourselves and our legal successors.
The condition of this bond is that PRINCIPAL is employed by __________________________ as _______________________________ and is required to be bonded.
If PRINCIPAL shall account for all money and property and other items of value coming into PRINCIPAL’s possession or control as a result of employment, then this obligation shall be void, otherwise it shall remain in full force and effect.
This bond shall remain in force until terminated or canceled on ___ days written notice by SURETY by OBLIGEE.
Dated: _____________________________
___________________________________
______________________________, PRINCIPAL
___________________________________
______________________________, SURETYFidelity Bond
Review ListThis review list is provided to inform you about this document in question and assist you in its preparation. A Fidelity Bond is a straightforward instrument for bonding purposes.
1. Make multiple copies. Give one to each signer.
Frequently Asked Questions
What is a fidelity bond?
A fidelity bond is a type of surety bond that protects an employer against financial loss caused by an employee's dishonest acts, such as theft or fraud. It involves three parties: the principal (the employee), the surety (the bonding company), and the obligee (the employer). The bond guarantees that the principal will account for all money and property coming into their possession or control as a result of employment.
Who are the parties involved in a fidelity bond?
The three parties in a fidelity bond are the principal, the surety, and the obligee. The principal is the employee who is required to be bonded. The surety is a surety company authorized to issue these bonds. The obligee is the employer or entity that is protected by the bond.
What does a fidelity bond cover?
A fidelity bond covers the principal's obligation to account for all money, property, and other items of value that come into their possession or control as a result of employment. If the principal fails to account for these items, the bond remains in full force and effect, allowing the obligee to claim against it. The bond does not cover other types of losses beyond those specified in the bond's condition.
How long does a fidelity bond remain in force?
A fidelity bond remains in force until it is terminated or canceled. The surety can cancel the bond by providing written notice to the obligee, as specified in the bond. The exact number of days' notice required for cancellation is stated in the bond document.
Can a fidelity bond be canceled?
Yes, a fidelity bond can be canceled. The surety may terminate or cancel the bond by giving written notice to the obligee. The bond specifies the number of days' notice required for cancellation.
What happens if the principal fails to account for money or property?
If the principal fails to account for all money, property, and other items of value coming into their possession or control as a result of employment, the bond's obligation remains in full force and effect. This means the surety may be liable to the obligee for the loss, up to the bond amount. The bond is void only if the principal properly accounts for such items.
Is a fidelity bond the same as insurance?
No, a fidelity bond is not insurance. It is a surety bond, which is a three-party agreement involving the principal, surety, and obligee. While it provides financial protection similar to insurance, the surety may seek reimbursement from the principal for any claims paid.
Who needs a fidelity bond?
A fidelity bond is typically required for employees who handle money, property, or other valuables as part of their job. The bond is required by the employer (obligee) to protect against potential losses. The principal is the employee who is required to be bonded.
What information is needed to complete a fidelity bond?
To complete a fidelity bond, you need the names of the principal, surety, and obligee, the bond amount in dollars, the principal's employment position, and the number of days' notice for cancellation. The bond also includes a date and signature lines for the principal and surety.
What is the purpose of a fidelity bond review list?
The fidelity bond review list is provided to inform you about the document and assist in its preparation. It helps ensure that all necessary information is correctly filled out. The review list is a tool to help you understand and complete the fidelity bond accurately.
