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Home > Blog > Reason why business owners should carry Fidelity Bond Coverage
MONDAY, MARCH 24, 2014

Reason why business owners should carry Fidelity Bond Coverage

Business owners have employees that have worked for them for many years and are completely trustworthy.  However, they may still need a fidelity bond.  There is an old saying in the bond field, “only honest people steal”.

  • Embezzlements occur often but are rarely reported, and in only a few cases are publicized.  Few people realize how common embezzling really is.
  • In most cases the embezzler is very well liked and respected in the community and in the company.  It is not uncommon for the business owner to hesitate to report the loss and talk in whispers about the incident.
  • While most businesses are not reluctant to report a fire or a storm loss, most are very reluctant to report or publicize a fidelity loss because they feel it will reflect poorly on their management ability.
  • It is important to report an embezzler to the police and bonding company. Failure to do so in a timely manner could jeopardize their right to recover due to failure to report in a timely manner as required.  Especially if later discovery reveals that the loss is much higher than originally thought.
  • A large embezzlement can cause the company to become financially impaired and the recovery of the loss is necessary to keep the company solvent and let the managers and board of directors know that the manager made a correct decision in carrying a fidelity bond.
  • It has been proven that embezzlers go on to the next job and begin embezzling there.  Reporting the incident will allow future employers to be aware of this when attempting to hire a new employee.
  • It has been proven that if a prospective employee is required to fill out a bond application they will simply leave and not pursue the job if they have been involved in an embezzlement at a prior company.

It is important to understand Fidelity Bonds and embezzlements.  Let Ed Weeren Insurance Agency, Inc. assist you in understanding all of these factors. Just fill out our bond request form, and we'll get back to you as soon as possible.

Posted 2:51 PM

Tags: insurance, bonds, fidelity bond coverage, business owners, austin, texas, business insurance, commercial insurance
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