What is a common requirement for all employees covered under a fidelity bond?

A common requirement for all employees covered under a fidelity bond is that they are subject to specific bonding amounts. Fidelity bonds are designed to protect an employer against losses caused by dishonest acts committed by employees. Each bond specifies a certain dollar amount, which represents the maximum liability the bond issuer will cover for losses resulting from employee dishonesty.

Establishing specific bonding amounts is essential as it helps in determining the financial risk that an employer is willing to cover against potential employee theft or fraud. This requirement ensures that both the employer and the bonding company understand the financial limits of protection that the bond provides, creating clarity and structure around the coverage.

While background checks, written contracts, and verbal agreements can play a role in the hiring and management of employees, they are not universally mandated as a prerequisite for fidelity bond coverage. The crucial aspect of fidelity bonds is their focus on the financial guarantees tied to the bonded employees, which is encapsulated in the specific bonding amounts established for each individual or position.