What Is Fidelity Bonding?
- Insurance to protect employer against employee dishonesty
- Covers any type of stealing: theft, forgery, larceny, and embezzlement
- In effect, a guarantee of worker job honesty
- An incentive to the employer to hire an at-risk job applicant
- A unique tool for marketing applicants to employers
- DOES NOT cover ‘liability” due to poor workmanship, job injuries, work accidents, etc.
- Is NOT a bail bond or court bond needed in adjudication
- Is NOT a bond needed for self-employment (contract bond, license bond or performance bond)
Why Is Fidelity Bonding Needed for Job Placement?
- Employers view ex-offenders and other at-risk job seekers as potentially untrustworthy workers, thereby, denying them job-hire
- Insurance companies will not cover risky job applicants under commercial Fidelity Bonds purchased by employers to protect themselves against employee dishonesty
- Anyone who has ever “committed a fraudulent or dishonest act” is deemed NOT BONDABLE by insurance companies, a situation leading to routine denial of employment opportunities for such persons
- Being NOT BONDABLE is a significant barrier to employment possessed by the hardest-to-place job applicants; this barrier can be eliminated only by The Federal Bonding Program
- Job bonding enables the employer to “obtain worker skills without taking risk”
- Persons who are NOT BONDABLE can ultimately become commercially BONDABLE by demonstrating job honesty during the 6 months of bond coverage under the Federal Bonding Program (such commercial bonding will be made available by the Travelers Casualty and Surety Company of America; referred to hereafter as TRAVELERS)
Who Is Eligible for Bonding Services?
- Any at-risk job applicant is eligible for bonding services, including: justice-involved individuals, recovering substance abusers (alcohol or drugs), welfare recipients and other persons having poor financial credit, economically disadvantaged youth and adults who lack a work history, individuals dishonorably discharged from the military, and others
- Anyone who cannot secure employment without bonding
- All persons bonded must meet the legal working age set by the State in which the job exists
- Self-employed persons are NOT ELIGIBLE for bonding services (bondee must be an employee who earns wages with Federal taxes automatically deducted from paycheck)
- Bonds can be issued to cover already employed workers who need bonding in order to (a) prevent being laid off, or (b) secure a transfer or promotion to a new job at the company
- Bonding coverage can apply to any job at any employer in any State
How Can Bonds Be Accessed Under the Federal Bonding Program?
- Any organization is now eligible to deliver bonding services under The Federal Bonding Program; for many years bonding services were almost exclusively delivered by the State Employment Service
- All organizations issuing Fidelity Bonds must be “certified” to do so by The Federal Bonding Program
- The Fidelity Bonds issued to employers covering at-risk applicants are made available exclusively to The Federal Bonding Program by Travelers which is not duplicated by any other U.S. program
- Bonds are issued instantly to be in effect the day that the applicant is scheduled to start work; the bonds are self-terminating (no termination paperwork needed), and the employer does not sign any papers in order to receive the bond free-of-charge
- The bond insurance issued ranges from $5,000 to $25,000 coverage for a 6-month period with no deductible amount (employer gets 100% insurance coverage); when this bond coverage expires, continued bond coverage can be purchased from TRAVELERS by the employer if the worker demonstrated job honesty under coverage provided by The Federal Bonding Program
- Bond can be issued to the employer as soon as the applicant has a job offer with a date scheduled to start work
- Purchased bonds expire upon 24 months of the issue date. Use them or lose them!