Bonds
Fidelity Bonds
What is a Fidelity Bond and What Is It For?
A fidelity bond is a financial guarantee that protects a company’s assets against damages caused by dishonest acts of its employees. It provides compensation in cases of theft, fraud, embezzlement, or breach of trust when the financial loss is attributable to company staff.
When Is It Required and Who Is It For?
This type of bond is essential for companies seeking to minimize internal risks and safeguard their assets. It is especially recommended for:
- Companies that handle cash or securities.
- Businesses with highvalue inventories.
- Financial and government institutions.
- Companies with staff in sensitive positions such as cashiers, accountants, or managers.
- Organizations that require high levels of employee trust.
Fidelity bonds can be contracted as:
- Individual: For a single employee.
- Collective: For a group of employees by name or position.
- Global: For the entire workforce.
Requirements for Issuance
To issue a fidelity bond, the surety company typically requests:
- Company Information: Articles of incorporation, powers of attorney, Tax ID (RFC), and proof of address.
- Internal Control Evaluation: Assessment of internal systems through questionnaires.
- Employee Data: Identification, position, and seniority of the employees to be bonded.
- HighValue Cases: Additional collateral or detailed information on the bonded employee.
