Michigan Fidelity Bonds
Surety Bond Professionals is a family-owned and operated agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all your Michigan fidelity bond needs.
What Are They?
Michigan fidelity bonds function more like insurance policies than surety bonds. The two most common types of fidelity bonds are employee dishonesty bonds and business services bonds. Both protect employers against the financial repercussions of dishonest acts committed by their employees:
- Employee dishonesty bonds compensate employers for their own financial losses incurred as a result of employee theft, embezzlement, fraud, or other crimes committed against the employer.
- Business services bonds protect employees against liability for losses incurred by customers as a result of theft, vandalism, or other dishonest acts committed on a customer’s premises. They not only provide financial protection but also give employers who purchase them a competitive advantage over non-bonded companies. In fact, some consumers will do business only with service companies that are covered by a business services bond.
Who Needs Them?
Employers purchase Michigan fidelity bonds voluntarily. There is no government agency or other “obligee” requiring them.
Business services bonds are typically purchased by employers who send employees to work at a customer’s residence or place of business—for example, by janitorial or cleaning services, landscapers, construction contractors, and similar professions.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
A Michigan fidelity bond is a legally binding contract between the employer (known as the “principal”) and the surety bond or insurance company (the “surety” for short.) The principal has the right to file a claim against an employee dishonesty bond to recover financial damages resulting from the unlawful act of an employee or against a business services bond to secure the funds needed to compensate a customer. Typically, a claim is only considered valid if the employee responsible for the financial loss has been convicted of a crime.
What Do They Cost?
How much an employer will pay for a Michigan fidelity bond depends on the type of bond, type of business, number of employees covered, and other business-related factors.
Some employee dishonesty bonds provide “blanket” coverage for all employees in the same amount. Others cover only certain employees, usually the ones with access to cash and bookkeeping systems or who have the authority to pay bills, handle banking tasks, and make financial decisions. This “scheduled” coverage can be in different amounts for different employees, depending on the risk of loss.
Typically, the premium for a Michigan fidelity bond will be 1-2% or less of the coverage amount.
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Our surety bond professionals will get you the Michigan fidelity bond you need at a competitive rate.