Employee dishonesty, third party bond, money and securities
Contractor shall obtain, at Contractor’s expense, and keep in effect
during the term of the Contract, Employee Dishonesty or Fidelity Bond coverages
for state-owned property in the care, custody, or control of the
Contractor. Coverage limits shall not be less than $ _______.
When do they apply?
- Use when the Contractor is handling your money, or has access to your
negotiable securities, other valuable property (such as computers or other
personal property), or data.
- Particularly important when the contractor has unsupervised access to
state property, including access during non-business hours
- Covers loss to money, securities, and property (other than money) caused
directly by Contractor´s employees’ dishonest acts. Property subject to loss by
crime includes all kinds of real and personal property - with money, securities
and jewels especially susceptible to loss. Policy must include a Third Party
Fidelity Bond, Inside/Outside Money and Securities Coverage.
- If the Employee Dishonesty Coverage is not specifically endorsed to
include a Third Party Fidelity/Crime Bond, in most cases, it will not be
comprehensive enough to provide coverage for a claim for theft by your
Contractor or their employees that results in a loss for your agency.
- Require Inside Money and Securities Coverage when the funds will be
located "inside" of the premises.
- Require Outside Money and Securities Coverage when the funds will be
located "outside" of the premises in the care or custody of a
messenger or armored car company.
- Use the Risk Assessment tool to help determine coverage limits.
- Evaluate exposure to dishonesty as basis for coverage limits. Limits
should equal or exceed the maximum amount of cash or negotiable securities or
vulnerable property at risk at any time. Note: Limits should be requested
separately for each type of coverage.
- Require larger limits if a Contractor´s dishonest employee would have
multiple opportunities to steal before your loss would be discovered.
- Require smaller limits if the Contractor will have limited access to
cash or negotiable securities, and when any contact the Contractor has
with cash or negotiable securities is supervised by the state at all times.