If your job requires working with a lot of cash or valuables, your employer may ask that you be bonded. Bonding is a type of insurance for the employer. It protects business owners from employee theft and also compensates the employer in cases of property loss caused by an employee.
Bonding is a type of insurance for the employer. It protects business owners from employee theft and also compensates the employer in cases of property loss caused by an employee. Bonding and insurance companies offer bonds, usually called fidelity or surety bonds, that will cover damage or theft by a person, business or subcontractor.
Bonding an Employee
Bonding and insurance companies offer bonds, usually called fidelity or surety bonds, that will cover damage or theft by a person, business or subcontractor. If an employee commits theft, the employer files a claim and an investigation follows. If the employee is found to be at fault, the bonding company pays the employer. It's a good idea for business owners to bond their employees if they work with expensive equipment or cash in order to protect the company from possible bankruptcy due to employee theft. Smaller businesses and startups are particularly at risk, since a loss can hit them harder than it would a large company with more resources.
Fidelity bonds can be a great marketing tool if your employees work in customers' homes. If clients know that your employees are bonded, they feel more comfortable hiring your business because they know there is recourse in the event of a theft.
Different Ways to Bond Your Employees
One way to bond employees is to provide a list of covered employees to the insurance company. This is called a Schedule Fidelity Bond, and whenever you hire someone new or an employee leaves, be sure you update this list. If you accuse an employee of theft and want reimbursement, his or her name must be on that list.
A Blanket Position Bond is another type of bond that might work better for your company, particularly if there is high turnover or if you're frequently adding people to the organization. This type of bond provides protection for certain positions in the company rather than specifically named employees.
A Primary Commercial Blanket Bond covers every employee in the company. If several employees steal at the same time, they are all covered under this type of bond.
If an employee is known to have been involved in past fraudulent activities, he or she will be rejected by a bonding or insurance company. If you find out about criminal behavior during the hiring process, it can help you weed out untrustworthy candidates.
What Types of Positions Should Be Bonded?
Accountants and financial managers should generally be bonded because they work with large sums of money. Employees involved in research and development that have access to valuable intellectual property should also be bonded. Finally, any employee who works in people's homes, such as housecleaners, plumbers, electricians and the like, should be bonded.