Risk management

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.

Setting limits

  • 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.