What is a Blanket Honesty Bond?

A blanket honest bond is a type of fidelity bond that protects employers from major losses due to dishonest acts of employees. Also known as a commercial blanket bond, this kind of coverage is needed in order to protect against risks like employee fraud and theft, something the financial industry is no stranger to.

While some cases of fraud are due to unwitting employees who have been hacked through phishing emails and other cybersecurity issues, sometimes there are theft cases that are face value. Blanket honest bonds are a type of bank crime insurance that cover a variety of risks. Having this kind of coverage is essential to a bank’s everyday operations, especially with already having to worry about theft from outside sources.

How They Work

An honesty bond is posted by a company or professional to make sure the integrity of the bond issuer and its employees are intact. Also known as a fidelity bond, a blanket honesty bond can also protect a purchaser’s clients, like customers of a bank or corporate clients.

A bankers blanket bond insurance program can cover forged checks, property damage, fraudulent trading, counterfeit currency, and more. Losses from these acts are covered even if the employees who are responsible cannot be identified individually.

These bonds are exclusively for business operations and function like insurance coverage. For employees who work with customers onsite, like in a bank setting, honesty bonds provide their employer with coverage for fraudulent acts. If a bank employee makes out a fraudulent check from a customer’s account, the protection would pay back the customer and make sure they have their money returned.

There are other types of bonds, such as pension bonds, that are tailored for specific employees in an organization, like those who issue out pension plans. The maximum bond required is $500,000 or $1 million if the plan holds any securities from the employer. Cost can vary for this type of coverage based on a number of factors including clientele, size of company, and various risks.

About Financial Guaranty Insurance Brokers

Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.