Fidelity Bonds: Theft Guard Protects from Employee Dishonesty

Employee Dishonesty Is A Widespread Problem

According to the Association of Certified Fraud Examiners’ 2022 Report to the Nations, the typical fraud case lasts 12 months before detection and causes a median loss of $117,000.

At Merchants Bonding Company, we help mitigate this risk through our fidelity bond options. With three easy Theft Guard options to choose from, Merchants has a simple application process that offers protection for businesses and business owners from loss incurred by dishonest acts of employees.

Theft Guard Standard

Theft Guard Standard is for businesses with more exposure (like convenience stores, businesses with salespeople, non-profit businesses with employees covered). It provides coverage if an employee steals from a customer or subscriber of the business service. Theft Guard Standard contains a conviction clause.

Theft Guard Pro

Theft Guard Pro is for professional businesses (like accountants, architects, physicians, dentists, insurance agents and attorneys). Coverage applies when an employee steals from the professional business; not if the employee steals from a customer or subscriber. There is no conviction clause for Theft Guard Pro policies.

Theft Guard Janitorial

Theft Guard Janitorial is specifically created for a janitorial service that has exposure to employee dishonesty from the employee entering a customer's premises. It provides coverage to the employer for an employee who steals from a subscriber or customer of the business. Theft Guard Janitorial contains conviction clause.

What is a Conviction Clause?

This clause in the bond language requires a conviction for the dishonest act before payment on the bond. Georgia is the only state with an exception to the conviction clause. Contact your underwriter for details.

Is there a Deductible?

There is no deductible for the Theft Guard Standard bond.

How is Premium Calculated?

Premiums are based on the amount of the bond and number of employees covered. Periodically, Merchants will require an update on the number of employees covered and calculate the renewal premium accordingly.

How Do I Get a Surety Bond?

Surety bonds are issued by Merchants Bonding Company (Mutual) through insurance agents. Contact your local insurance agent or use our Find an Agent tool. They will guide you through the process, informing you of what documents and information are needed by the surety (Merchants Bonding Company (Mutual)) to underwrite your bond.

What is a Surety Bond?

A surety bond is a three-party agreement that ensures the fulfillment of a commitment or contract. For instance, the surety (Merchants Bonding Company (Mutual)) may provide a surety bond to a construction company (the principal) which is required by the state (the obligee), ensuring the construction company will perform the duties as outlined in the contract. In bonding the construction company, Merchants assumes the risk should the company default or not fulfill their contract. A surety bond is different from traditional insurance in that the principal is obligated to pay back the surety company on any claims paid out.

All information provided is subject to change.