WHAT ARE Janitorial Services Bonds?
For Businesses that provide janitorial services to other business? You know how vulnerable their employees are to employee dishonesty. After all, their employees have access to customers' assets, equipment, supplies and personal belongings.
These employees are easy targets for blame. Any customer who finds something missing is likely to suspect those who do the cleaning. The fact is dishonest employees can significantly damage their employer's business.
This bond is specifically designed to provide protection for your client's customers. They may have good luck and never have problems with a dishonest employee; but they will rest easier knowing they are covered.
WHAT ARE DISHONESTY (Fidelity) BONDS?
The Surety Company Dishonesty Bond is employee fidelity coverage to protect the employer against a dishonest act by an employee. For the employer, the Dishonesty/Fidelity Bond provides protection for a very reasonable premium. For the agency, the bond can be an excellent door opening tool, leading to additional business. The Dishonesty/Fidelity Bond is easy to write, without all the complicated rate modifications and employee classifications other companies require.
WHAT IS THE DIFFERENCE BETWEEN THE SURETY COMPANY'S FORM A AND FORM B COVERAGE?
1. Form A - The Form A bond is standard fidelity coverage. It is designed to cover professional and business offices such as accountants, physicians, dentists, attorneys, architects and realtors. The Form A coverage can also be used to cover the officers only of nonprofit organizations. This is a blanket position bond covering each employee to the penalty amount. * The Form A bond provides coverage exclusively to the employer, to protect against a dishonest act by an employee. A dishonest act by the employer would not be covered.
2. Form B - The Surety Company developed the Form B bond to provide employee fidelity coverage for businesses with more exposure. This form is used for businesses such as cafes, restaurants and retail operations. The Form B coverage is also used to cover nonprofit organizations when the employees of the organization are to be covered, along with the officers. To protect against unjustifiable allegations or charges, the employee must be convicted of the dishonest act before coverage would apply .* * This is also blanket position coverage.
The Form B bond provides coverage to the employer to protect- against a dishonest act by an employee, plus another feature known as subscriber liability. Under the Form B bond, the subscribers to a service are also protected against a dishonest act by an employee; however, it is important to note that a subscriber to a service does not have a direct right of recovery under Form B coverage. The Company only agrees to indemnify the insured for any loss of money or other property which it sustains or for which it becomes liable to any customer or subscriber through any fraudulent or dishonest act committed by its employees.
* In Texas , Form A is commercial blanket coverage. All employees are covered for an aggregate amount up to the bond penalty.
** The conviction clause does not apply in North Carolina but an indictment is required. The state of Nebraska requires either a conviction or a guilty plea.
WHAT INFORMATION IS NEEDED TO UNDERWRITE A DISHONESTY /Fidelity BOND?
Underwriting is limited to five basic questions:
1. Name and address of the applicant . - This is self-explanatory.
2. Penalty amount . - We offer limits up to $100,000 for Form A and B Dishonesty Bonds and Janitorial Services Bonds.
3. Description of the business. - The description will determine whether Form A or Form B is used. Final discretion in classification is reserved by the underwriter.
4. Total number of employees .- Keep in mind That all employees, and owners / officers if they are to be included in coverage, are included in this count. A person does not have to work a full 40-hour work week to be considered an employee. Be particularly careful when a large organization (i.e. department store or construction company ) lists only a small number of employees. Since these are blanket bonds, they cover all employees.
5. Information regarding prior losses . - When the business has suffered a previous dishonesty loss, it is important to obtain a detailed explanation of how the loss occurred and what steps were taken to prevent the loss from occurring again. It is also important to know whether the defaulting employee was terminated. A prior loss does not mean the bond cannot be issued, but more underwriting is needed.