Investors are looking for potential opportunities where they can minimize their risks. An investor’s worst nightmare is to recommend a fraudulent product.
Fidelity and public relations provide protection against fraudulent conduct. These bonds can be statutory to complete a contract, or you can add them as protection in an emergency. Here’s a look at how bonds add to a stock of collateral.
- Government official bonds
Public service bonds are required by law as a guarantee that a public official will perform his duties with honesty and integrity. Government official bonds are created based on an agreement between the official, the government and the guarantor who writes the bond. While the exact requirements vary depending on the statutes, public service bonds are required for people who want a public assignment. Government official bonds are required for mayors, judges, officials, tax collectors, sheriffs and supervisors. Government official bonds require individuals to replace the government if they do not perform their duties while on duty. They are also required to pay a fixed amount. Several government entities require these types of bonds, including local authorities, courts, universities and school districts.
- Loyalty bonds
Loyalty bonds are a form of insurance that protects companies from losses that arise due to fraudulent or corrupt actions by employees. Fidelity bonds play a similar role as insurance. These bonds are not marketable and do not incur interest in the way that investment bonds do. Loyalty bonds cover various fraudulent acts by employees, such as counterfeiting, embezzlement and theft. Fidelity bonds are an asset for people in a company who have access to funds. Owners can buy felt protection, which protects a large number of employees. Loyalty bonds can give your company extra protection in areas where you are vulnerable to the behavior of fraudulent employees.
There are several types of fidelity bonds. First-party fidelity bonds protect companies against wrongdoing by their employees. Third-party fidelity bonds protect companies from harmful acts performed by independent contractors and consultants. ERISA bonds cover 401K and pension account managers against fraudulent documents. Companies that store their customers’ property can also buy fidelity bonds.
Keep in mind that some bonds are easy to obtain, while others may require a review of your credit history or assets. If you have any questions regarding fidelity bonds, please contact our team at Abbate Insurance Associates Inc. and we can assist you.