Many charter schools need fidelity insurance to protect your school from potential financial risks.   Many of these insurance policies are written in the form of a bond.   This post will explain the different types of bonds available and provide insight into whether your charter school should consider purchasing one.

What Is a Fidelity Bond?

Fidelity insurance is a type of business insurance that protects from monetary or property theft or other employee misconduct that can result in a financial loss. In many cases, these bonds are optional and can provide peace of mind if you are concerned about employees with access to school assets. In other situations, such as when you have a trustee of a pension plan on staff, a fidelity bond may be required.

Types of Fidelity Bond Insurance

  • ERISA bonds: If your charter school has a pension plan, the Employee Retirement Income Security Act requires that you purchase a bond equal to at least 10% of the total plan assets.   This bond protects you from instances like an employee embezzling retirement funds. The bond has no deductible and is listed under the plan’s name.
  • Dishonesty bonds: This type of bond protects your schools from monetary or property theft. There are two types of dishonesty bonds:
    • Blanket coverage: With this policy, all employees are covered for the same amount unless excluded explicitly by request.
    • Scheduled coverage: This type of bond will only cover certain employees who can be bonded for different amounts depending on the risk you face. This type of bond is not common for a charter school.

How Much Does a Fidelity Bond Cost?

The price of fidelity bond insurance depends on many factors, including total assets, number of employees, and prior claims history. However, that being said, an annual policy will usually start at $1,000.

Making a Fidelity Bond Insurance Claim

Employee theft does happen, unfortunately. When money or property goes missing, you must report the theft to your agent and insurance company as soon as possible, even if you do not have proof that an employee was responsible. Many surety companies have stringent deadlines for providing information on a loss.

If you think your charter school may need fidelity insurance, please don’t hesitate to contact our office. We can provide you with multiple options from a variety of insurance companies.