Employee Theft Bond Guide

Small business owners should consider employee bonds to protect against theft. Read on to learn more about employee theft coverage.

SuretyBonds.com is the nation’s top surety provider. We offer the best service, fastest delivery and most affordable employee theft bond prices in the industry. 

What Is an Employee Theft Bond?

The unfortunate reality is that employees may act dishonestly and take advantage of company assets or customers. An employee theft bond will reimburse a business for any losses, thereby reducing the risk of failure due to theft.  

How Much Does an Employee Theft Bond Cost?

As an employer, you can expect to pay 1-3% of the total bond amount for your employee theft bond. For example, a $10,000 employee theft bond would cost just $100 for a highly qualified applicant. However, this percentage may vary depending on your specific circumstances, including:

• Specific bond type
• Business size and type
• Number of employees covered 
• Personal financials
• Business financials

What Are the Benefits of Employee Dishonesty Bonds?

Employee dishonesty bonds provide the following key benefits:

• Establish trust for your business
• Make customers feel safe with employees in their homes 
• Reduce the risk of bankruptcy due to theft
• Protect your intellectual property 

Although there are different ways you can prevent company loss (setting up strict job guidelines, checklists and cross-verification), a bond offers an additional layer of security. 

Types of Employee Theft Bonds  

There are three primary types of employee theft bonds:

1) Name Schedule Fidelity Bond

• This bond covers a designated list (schedule) of employees. Whenever you add or change employees, you simply notify the surety company. Collecting a claim on this bond requires absolute proof that an employee stole from the business.

2) Blanket Position Bond

• This bond provides blanket protection over certain positions rather than a list of employees. All employees who work in the designated position(s) are covered, and new employees are added automatically. This type of bond does not require absolute proof.

3) Primary Commercial Blanket Bond

• This bond covers every employee in your company. Whether one or multiple employees committed theft, you can claim a loss for the same amount.

Which Types of High-Risk Employees Should Be Bonded?

Any employee with access to valuable company assets could be a potential theft risk. This includes access to automobiles, intellectual property, expensive equipment and cash. 

Some high-risk positions include, but are not limited to: 

• Accounting: The Sarbanes-Oxley legislation protects shareholders from fraudulent accounting practices but not from the risk of theft through accounting departments. Experienced accountants have been known to embezzle funds through skimming, larceny and fraud.
• R&D: Employees with access to intellectual property are also considered high-risk. There are many cases of research and development employees selling company secrets.
• Door-to-Door: Plumbers, electricians and even general contractors who work at client homes or offices should be bonded due to inherent risk.

When Should an Employee Be Bonded?

Although it is not a requirement, bonding employees immediately upon hiring is a good way to find trustworthy workers and filter out any candidates with a history of fraudulent activities.

What Are Employee Theft Bonds vs. Fidelity Bonds?

Fidelity bonds protect businesses from dishonest employee actions. Employee theft bonds, or employee dishonesty bonds, are a specific type of fidelity bond to protect against theft of company assets by employees.