What Is a Fidelity Bond?

Fidelity Bonds refer to a category of bonds providing coverage to employers and customers in cases of loss caused by employee fraud. Similar to insurance, fidelity bonds protect the holder of the bond from financial losses incurred due to dishonest employee actions such as: embezzlement, theft, forgery, larceny, etc. Although not always a contract requirement, employers may choose to secure a fidelity bond for their businesses’ protection.

Types of Fidelity Bonds

There are various types of fidelity bonds that will reimburse in cases of employee dishonesty, but each type has a unique role. Jet is happy to guide businesses to obtaining the correct coverage. Take a look at the list below to see which fidelity bonds are offered through Jet:


The cost for a fidelity bond will vary based on bond amount, type of business, and size of business.

Business services bonds, employee dishonesty bonds, janitorial bonds, and financial institution bonds are all based on the factors above. For example, a business with four employees that requires a $10,000 bond would pay between $115 and $126 for a one-year bond.

ERISA bonds are typically purchased for 3-year terms, and can cost anywhere from $100 for a lower bond limit to $450 for the largest bond limit of $500,000. The bond must maintain the 10% minimum as plan assets grow.

Who Should Purchase a Fidelity Bond?

Employers purchase this coverage to be financially reimbursed in cases of employee theft, embezzlement, or other fraud. Many industries are a good fit for a fidelity bond, but below is a The range varies list of businesses that would benefit most from a fidelity bond:

ERISA bonds are mandatory for all businesses offering employee benefit plans. The bond is to the benefit of the plan participants as it will protect them in cases of financial loss due to an employee’s fraudulent actions.

How to File a Claim on a Bond?

The claims process can vary depending on the type of fidelity bond, however if an employee acts in a dishonest way, the employer is able to pursue action on the bond. Any claim that is filed must be evaluated.

If a claim is being filed on an employee dishonesty, business services, or janitorial bond, the claim will only be proved valid and paid out if the employee is tried and convicted of the crime. In which case the convicted employee would be responsible to pay back the claim amount to the surety company.

For ERISA bonds, the claim can be filed for any fraudulent action of an employee named on the bond. If the claim is proved valid by the surety, they would pay out for up to the full bond limit, then holding the dishonest employee responsible for paying that amount back to the surety along with any legal fees.