Every business owner needs to be concerned about the possibility of their employees committing dishonest acts that may harm the business financially. An employee dishonesty bond is a type of fidelity bond that protects business owners against the financial consequences of an employee forging checks, stealing cash or goods, embezzling from the business, committing fraud or any other financial crime against their employer.
An employee dishonesty bond does not protect against financial loss from dishonest acts committed by employees while working on a customer’s premises. For that you would need a business services bond, such as a janitorial bond that the owner of a cleaning business might purchase.
While employee dishonesty bonds provide important financial protection for business owners, they are not the typical surety bond. In fact, they function more like insurance. Typically, a surety bond provides protection for the party requiring the bond, referred to as the “obligee.” In the case of employee dishonesty bonds, however, there is no obligee, as business owners purchase them voluntarily for their own protection.