Fidelity Bond vs Employee Dishonesty Bond?

An employee dishonesty bond is a specific type of fidelity bond. A fidelity surety bond is a category of surety bonds.

Fidelity bonds are a category of surety bonds that protect against dishonesty or financial misconduct by employees.

An employee dishonesty bond is one of the only surety bonds that is purchased by a business for it's own protection from an employee who might:

• Steal or misappropriate money
• Commit financial forgery
• Execute cybercrimes against the company
• Steal valuable property

In the event of an employee committing one these or similar actions, the business can press charges. If the employee is convicted, the surety will pay the company.

Employee dishonesty bonds or coverage are typically purchased when a company hiring:

• Temporary employees
• Employees with a prior conviction
• Seasonal laborers
• Contract based employees
• Volunteers
• Board members and trustees

Other Types Of Fidelity Bonds

There are two other primary types of fidelity bonds:

• Business service bonds
• ERISA bonds

A business service bond is purchased by a company that has employees working in or on the private property of a customer.

If an employee steals or purposefully damages the private property of the customer, the customer can make a claim against the bond for financial damages.

And an ERISA bond, also known as an Employee Retirement Income Security Act bond is purchased by an individual who manages a private 401k retirement plan or private health plan.

This bond will protect the individuals in the plan from a manager who steals from contributions or purposefully mismanages funds.

So an employee dishonesty bond is a type of fidelity bond and that is the difference.