Fidelity Bonds

A nonprofit organization's first line of defense against employee theft and fraud should be a good system of internal controls. But no system is perfect, and a fidelity bond can be a relatively inexpensive safety net.

Fidelity bonds indemnify the employer against any loss of money or other property that is sustained through any fraudulent or dishonest acts committed by any of its employees, whether they were acting alone or in collusion with others, up to the amount of coverage stated in the bond. How much can be recovered depends on the limits of the bond that is purchased.

The Maryland Nonprofits Fidelity Bond Program is a Blanket Bond rather than a Name Schedule or Individual Bond. It bonds all employees and the premium is based upon the number of employees who actually have access to money or property of the insured employers. With a blanket bond you do not have to notify the company every time you replace or hire an employee., And it bonds all of your employees, not just those you think might steal from you.

This program features insurance provided by Travelers Property and Casualty, and is being sold through Gorges & Company, Incorporated in Baltimore. Coverage is only available to qualified nonprofit members of Maryland Nonprofits.

Standard Coverage: The Maryland Nonprofits Fidelity Bond Insurance Program provides a minimum of $25,000 of coverage with a $250 deductible. There is standard pricing for limits of $50,000; $100,000; and $250,000. Pricing at each level is determined by the number of "ratable" employees. (A ratable employee is one that handles checks, cash, or securities.) A schedule of premiums by amount of coverage, type of organization, and ratable employees is listed on the last page of this bulletin.

Endorsements: Most fidelity bonds only cover employees.  The Maryland Nonprofit Fidelity Bond Program has as a standard feature an endorsement that covers dishonest acts by volunteers.

In addition, for those organizations that indicate on the application that they have an employee benefit plan, an ERISA endorsement will be automatically added at no additional cost.

Travelers Property and Casualty is licensed to sell insurance in Maryland:  Travelers Property and Casualty has applied for and been issued a Certificate of Authority to sell insurance in Maryland. As an authorized insurance company, it is subject to an extensive set of regulatory requirements. This is especially important for, if the company were to become insolvent, Maryland's Property and Casualty Guarantee Corporation would be available to help assure claims were paid or unearned premiums returned. Many other Fidelity Bond are written by "non-licensed companies," or by "risk retention groups," and are not subject to the same level of regulatory scrutiny as apply to a licensed insurance company. Policies issued by unauthorized companies or risk retention groups are not protected by the Property and Casualty Guarantee Corporation.

ALL COVERAGE IS SUBJECT TO POLICY TERMS AND CONDITIONS.

Download the Maryland Nonprofits Fidelity Bond Application.

If you have more questions, please refer to our Frequently Asked Questions About Fidelity Bond Insurance Coverage.

For more information, please contact Nancy Hall at Maryland Nonprofits.

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