If you are a business owner, two of your main goals are to protect your company and your clients. Unfortunately, employees can be a threat to both your company and your customers. Therefore, you may be considering purchasing a surety bond for protection. This is what you need to know about these types of bonds.
What Are They?
These bonds protect your company against any legal action when an employee acts dishonestly. Dishonest behavior includes theft, fraud, forgery and embezzlement. Although most bonds only protect your company from these acts, you can purchase policies that also protect your customers. In addition, the law does not require that you purchase these bonds, but they do provide an extra layer of protection.
What Is Insured?
Employee dishonesty bonds can cover a wide range of actions. For example, you can protect your company against theft on company property. You can also protect yourself in cases in which your employees steal from your clients. Computer fraud may also be covered. If money is transferred fraudulently or if your checks, credit or debit cards are forged or altered, you may want a bond to protect you. Both inside and outside of your personal or company property can be insured against theft as well. Finally, you can protect yourself against fraudulent or counterfeit money orders or currency that you receive from your clients.
How Do They Work?
These bonds are activated in the case of a dishonest act by your employees. For example, if your employee stole $10,000 via bank transfers over the course of one year, you need to gather the evidence of this theft and submit it to your surety company. The company will continue the investigation to determine its validity. If they find that the employee did steal this money, they will reimburse you. However, you may be required to press charges against the employee, and this person may need to be convicted before the dishonesty bond surety company repays it.
Your company, whether it is big or small, cannot afford dishonest employees. Either they will affect the company’s brand and reputation, or they could place it in a financial bind. Therefore, you may consider learning more about how these bonds can help you protect your company and clients.