Who Needs Theft Guard Standard?

Theft Guard Standard is a fidelity bond designed to cover the employer from dishonest acts, such as theft, by employees. It also provides coverage if an employee steals from a customer or subscriber of the business service. In the event the employee performs a dishonest act, the subscriber may make a claim against the business and the business can then make a claim against the bond.

It was created for businesses with more exposure (like convenience stores, businesses with salespeople, non-profit businesses with employees covered).

Are Business Owners Covered?

No, business owners are not typically covered by Theft Guard Standard. In the case of a single owner, that person cannot steal from himself/herself. If there are multiple owners, this bond does not protect them from each other. If the owner(s) of the business are the only employees of the business, Merchants Bonding Company can consider a rider which allows the subscriber to make a claim directly against the bond.

Is the Employer Covered if the Employee Steals from the Employer of the Subscriber?

Yes, Theft Guard Standard covers theft from the employer and theft from subscribers.

Who Needs Theft Guard Standard?

  • Barber Shops
  • Bowling Alleys & Pool Parlors
  • Business & Professional Associations
  • Charitable, Religious, or Non-Profit Membership Organizations
  • Condominium Owners’ Associations, Planned Unit
  • Contractors
  • Department & Clothing Stores
  • Detective Agencies
  • Drug Stores
  • Florists
  • Fraternal Orders & Social Clubs
  • Gas Stations
  • Health Clubs & Gymnasiums
  • Home Health Care
  • Hotels & Motels
  • Insurance Adjusters
  • Laundries
  • Mortgage Agents
  • Motor Vehicle Dealers & Automotive Parts Dealers
  • Parking Garages
  • Pawn Brokers
  • Pet Sitters
  • Property Management Companies
  • Sports Arenas & Casinos
  • Sports Promoters
  • Supermarkets & Bakeries
  • Theaters
  • Veterans Associations, Boy Scouts/Girl Scouts, etc.

Does the Employee have to be Convicted of the Dishonest Act?

Yes, the employee has to be convicted in a court of proper jurisdiction for coverage to apply. This conviction clause prevents the blame from being placed on the employee inappropriately.

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.

How is Premium Calculated?

Premium is 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 does Merchants underwrite Theft Guard Standard?

There is little underwriting for Theft Guard Standard. If there have been prior dishonest acts resulting in losses, Merchants underwriters must be satisfied with loss
prevention steps taken since that incident before they will approve the bond. There are some business types Merchants will not consider under this bond. We will ask about the type of business to determine if the class of business is covered by Theft Guard Standard.

What Happens in the Event of a Claim?

The insured should notify their agent and Merchants in writing, immediately upon discovery of the loss. Merchants’ claims personnel will review the claim and follow up with the insured.

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.