Glossary

Fidelity bond

A two-party bond that works like insurance, reimbursing an employer or its clients for theft and other dishonest acts by employees.

Also called: fidelity insurance, employee dishonesty bond, blanket fidelity bond, business services bond

A fidelity bond reimburses a business for loss caused by the dishonest acts of its employees. The name misleads. Unlike a surety bond, which has three parties and guarantees performance to someone else, a fidelity bond has two, the insurer and the business, and pays the business for its own loss.

Forms vary. A blanket bond covers every employee under one limit; a scheduled or position bond names individuals or job titles. A business services bond, the "bonded and insured" a cleaning or staffing firm advertises, protects the firm's clients from theft by its workers. Today most small businesses get this protection as the employee theft insuring agreement in a commercial crime policy, such as ISO form CR 00 20, rather than a stand-alone bond. See employee dishonesty.

One fidelity bond is mandatory. ERISA section 412 requires those who handle retirement plan funds to be bonded for 10% of the funds handled, with a $1,000 minimum and a $500,000 maximum per plan official ($1 million for plans holding employer securities), according to Department of Labor guidance. That ERISA bond protects the plan, not the employer. The guide on employee theft coverage and fidelity bonds: what they cover and who needs one sorts out which one you need.

Last reviewed October 10, 2026

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Related terms

Employee dishonesty Crime coverage for money, securities or other property lost through dishonest acts by your own employees, intended to harm you and benefit them. ERISA bond A fidelity bond ERISA requires for people who handle benefit plan funds, protecting the plan from theft or fraud and set at 10% of the funds handled. Surety bond A three-party guarantee in which a surety promises an obligee that a principal will perform or pay, with the principal bound to repay the surety for any loss. Forgery and alteration A crime coverage that pays when a check, draft or promissory note you issued is forged or altered, plus the cost of defending a suit over it. Computer fraud A crime-policy coverage for money, securities or property lost when someone uses a computer to fraudulently move it out of your premises or accounts.

Related guides

Commercial crime insurance: what it covers and what it excludes Crime insurance reimburses a business for employee theft, forgery, burglary and fraudulent transfers. How the insuring agreements, triggers and exclusions work. Employee theft coverage and fidelity bonds: what they cover and who needs one A fidelity bond or employee theft coverage pays when staff steal. How first-party, client and ERISA bonds differ, who counts as an employee, and ERISA's rules. ERISA fidelity bonds vs fiduciary liability insurance An ERISA bond is required and covers theft by people who handle plan money. Fiduciary liability insurance is optional and covers breach claims. How each works. Surety bonds explained: how they differ from insurance A surety bond is a three-party guarantee you must repay if the surety pays. How bonds differ from insurance, the parties, the main types and how claims work.

Related insurers

Beazley Lloyd's specialty insurer known for cyber, D&O and E&S property, acquired by Zurich on Oct. 1, 2026; sells through brokers on admitted, E&S and Lloyd's paper. Great American Insurance Group Cincinnati specialty insurer owned by American Financial Group (NYSE: AFG), running 30-plus niche units in comp, trucking, construction, crime and marine. TruStage (CUMIS) The credit union movement's own insurer, formerly CUNA Mutual Group; CUMIS writes bonds, D&O, cyber and property for credit unions plus specialty programs.

Related industries

Cleaning business insurance Janitorial, office and residential cleaning insurance: the care, custody and control gap, comp class codes, janitorial bonds, and what building owners require. Condo and HOA insurance What condo and homeowners associations need: master policy, D&O, crime and fidelity, liability, plus lender rules and Florida reserve and inspection laws. Financial advisor insurance What RIAs, planners and broker-dealer reps need: advisory E&O, FINRA fidelity bonds, ERISA bonds, cyber under Regulation S-P, crime for client funds and a BOP. Property manager insurance What property managers need: E&O, general liability, crime and fidelity cover for owner funds, hired auto, and how to be named on owners' policies. Self-storage facility insurance What self-storage owners need: property, liability, customer-goods and crime cover, how tenant protection plans differ from insurance, and the lien-sale rules.