Your employees are great and you have every reason to believe that they will always do the right thing. Trust in business is important. Security is just as important and is a reason to justify getting an employee dishonesty bond, also known as a fidelity bond. So, if an employee unexpectedly commits an act of fraud, your business is covered for the losses that can occur.
What is a Fidelity Bond?
Various insurances are necessary to protect your business as you compete in an open market with external threats. A fidelity bond is crucial for internal threats. Although this is not insurance, it does protect your business from certain losses that can occur if an employee commits a dishonest act.
Coverage under this bond guarantees the insurance company will pay for monetary or other property losses because of the dishonest act.
Protection Against Negligence
Trust in your employees does not mean they may never unwittingly do something that is negligent enough to damage the company. The result can still cause financial harm.
For instance, there is always the potential for making a mistake if your business is handling large financial transactions or large amounts of cash. If so, this could have a severe impact on your company’s finances. Purchasing a bond against liability can protect your company against charges of negligence.
Protection from Misrepresentation
An intentional unethical act of misrepresentation is another business concern that a fidelity bond covers. The employee chosen to represent you in the business world could enter into a financial transaction that does not correctly or ethically represent your interests. Losing to this type of act could be covered with the right bond.
Protection Against Fraud
Although your HR department makes every effort to hire good employees, there are times when a breach of trust occurs. Some employees might make a personal decision to engage in fraudulent transactions while representing your company.
Think about the employees in your company that has access to assets and large financial transactions. These are the employees who should be a priority for coverage under a bond. Typically, your options are to cover every employee or just the few people who have specific roles.
Building a culture of trust is key to your company’s success. Having something in place that insures this continues despite potential mishaps is good for long-term protection.
Continue to work with employees by reinforcing good ethical standards. At the same time, make sure your business is covered.