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, so a Fidelity Bond can be a relatively inexpensive safety net.

A Fidelity Bond will indemnify the employer against loss of money or other property that is sustained through any fraudulent or dishonest acts committed by any of its eligible 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 upon the limits of the bond that is purchased.

The Maryland Nonprofits Fidelity Bond Program is a blanket bond, rather than a name-schedule individual bond. The premium is based upon the number of eligible employees who 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 on their proprietary Wrap + Fidelity & Crime Policy. Insuring agreements include: employee dishonesty, forgery or alteration, on-premises, in-transit, money orders and counterfeit paper currency, and computer fraud and funds transfer fraud. Coverage is only available to qualify nonprofit members of Maryland Nonprofits.

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 as well. 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.

Also included is access to Risk Management PLUS+ Online at no additional cost. Delivered via a dynamic, web-based platform, it is your one-stop resource providing a comprehensive set of tools that will help protect your organization from costly litigation. It includes strategies to help your company address the risks associated with employee dishonesty and takes steps to identify theft and prevent it altogether.