Fidelity Bonds in Ottumwa, IA

When making business arrangements and agreeing to provide services to your clients, it may often be necessary for you to provide financial reassurance regarding potential wrongdoing by your employees. Regardless of how thoroughly you vet your workers, dishonesty and criminal behavior should be risks you account for. With this in mind, fidelity bonds can provide crucial financial security. 

How Does a Fidelity Bond Work? 

Fidelity bonds are financial instruments often sold by insurance carriers that can help protect your organization from the fiscal ramifications of dishonest or fraudulent acts committed by employees, including contracted workers. In response to various incidents, such as theft, forgery, property damage or burglary, fidelity bonds can reimburse affected parties and insulate your business from out-of-pocket losses. 

What Are the Different Types of Fidelity Bonds? 

Also known as honesty bonds, fidelity bonds may come in several forms, such as the following: 

• Business services bonds can financially protect your business and clients when your employees physically enter their worksites.
• Employee dishonesty bonds may render financial aid if your workers commit wrongdoing involving customers’ private or financial data, such as Social Security numbers and credit card information.
• ERISA bonds can compensate affected parties if the trustees of pension plans or 401(k)s commit theft or otherwise violate the Employee Retirement Income Security Act (ERISA) of 1974. 

What Is the Difference Between Surety and Fidelity Bonds? 

Surety bonds are another common type of bond that U.S. businesses may be required to purchase by clients and customers. However, while fidelity bonds are typically used to protect other parties from dishonest or criminal acts committed by your employees, surety bonds are generally intended to secure clients’ financial interests should you fail to deliver promised services. For example, if a contractor fails to complete a project up to agreed-upon standards or by specific deadlines, surety bonds can help project owners or developers recoup their losses. 

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With a history of service dating back to 1960, McCune and Reed Insurance is ready and able to help your company understand and address its bond-related needs. Contact us today to learn more.