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Business owners have to protect their property, employees, customers, and themselves against damages. Business insurance policies provide general liability coverage, professional liability coverage, workers compensation, and commercial auto coverage. Another important type of protection for some businesses is a Third Party Fidelity Crime Bond. It provides specific protections against willful wrongful acts carried out by your employees. It’s especially pertinent if you regularly deal with expensive equipment or large sums of money.

What Does a Third Party Fidelity Bond Cover?

A Third-Party Fidelity Bond, which is also referred to as an Employee Dishonesty Bond or a Commercial Dishonesty Bond, is designed to protect your business from harm caused by an employee or contractors actions. While you try to do your best to hire trustworthy people and honest contractors, you can’t be 100% sure. A Third Party Fidelity Bond will protect you in the event that any of the following happens:

  • An employee or contractor steals from a client.
  • An employee or contractor illegally transfers funds by remotely accessing a client’s secure system.
  • An employee or contractor commits fraud against a client.
  • An employee or contractor’s forgery affects a client negatively.

Since you’re the employer, or the company that hired the contractor, you’re directly responsible for their actions while they’re working on your behalf. That means you’ll have to compensate your client for the losses they incur in one of the above instances. A Third Party Fidelity Bond will provide you with the funds to cover your client’s losses without disrupting your own finances.

Standard Insurance vs Fidelity Bonds

Your company’s insurance policies are all meant to cover specific areas of your business. For example, your general liability policy protects you against injury and property damage claims and Worker’s Compensation provides your employees with protection if they get hurt. Fidelity Bonds are the only type of business insurance policy that’s created to explicitly cover intentional wrongful acts by employees or contractors. It’s not a replacement for any other insurance coverage, it’s an additional layer of security for your business.

Do I Need a Third-Party Fidelity Bond?

For the most part, a Fidelity Bond is an optional coverage, however, there are instances where it’s essential. For example, if you’re an IT consultant that works in the financial industry, a Fidelity Bond may be a requirement by many of your clients. In fact, having a Third-Party Fidelity Bond in place may well put your business ahead of a competitor. Generally speaking, anytime you and your team will have access to a client’s expensive equipment, facilities, large amounts of money, or other valuable items, you’ll need a Fidelity Bond.

Additional Fidelity Bond Coverage to Consider

If you’re just realizing that you need a Fidelity Bond, you may already have some liability issues that you’re working through. Perhaps you have concerns of past fraudulent or otherwise illegal actions by an employee or contractor. If you’re buying a Fidelity Bond for the first time, you may also want to consider adding a Discovery Bond to your insurance coverage mix. This type of bond protects you against any undiscovered losses that you incurred before the Fidelity Bond was issued.

How Do I Buy a Third Party Fidelity Bond?

The easiest and fastest way to find the business insurance coverage that you need is to request a free, no-obligation quote contact us at Or, if you prefer, you can call us at 888-242-4675 to talk to one of our insurance specialists. We’ll help you find the right coverage for all of your business needs including General Liability Insurance, Worker’s Compensation, Professional Liability, and of course, Third Party Fidelity Bonds.