If one of your employees commits a crime against a client, your consulting firm could be held responsible. A fidelity bond, which falls under commercial crime insurance, provides compensation when an employee steals from your business or from a client. Unlike insurance, you will be required to reimburse your insurer for any claims paid.
Your clients might request that your consulting firm secure this coverage before they'll hire you. It may also give prospective customers peace of mind to know they're protected.
This policy provides coverage related to:
There are two kinds of fidelity bonds: first-party and third-party. You might also see fidelity bonds called employee dishonesty coverage.
First-party fidelity bonds protect your business property and assets from dishonest employees. They can cover expenses related to:
Third-party fidelity bonds protect your clients from dishonest employees. They can reimburse your client for the following crimes:
Consultants often need third-party fidelity bonds to satisfy the requirements of a client contract, especially when they work with clients in the financial services industry. When this bond protects clients against employees who enter their property, it's called a business service bond.
Fidelity bonds protect against employee dishonesty, but they don't provide financial protection for bodily injuries, property damage, and other common risks. Other recommended policies for consultants include:
General liability insurance: This policy can cover expenses related to common accidents, including third-party injuries, client property damage, and advertising injuries.
Professional liability insurance: Also called errors and omissions insurance (E&O), this policy covers legal costs related to business mistakes or decisions that resulted in revenue loss and legal action by a client.
Workers' compensation insurance: Workers' comp covers medical costs if a consultant suffers a work-related injury, such as tripping over a power cable and breaking a wrist.
Business owner’s policy: A BOP bundles general liability insurance with commercial property insurance, typically at a lower rate than if the policies were purchased separately.
Cyber liability insurance: This policy is crucial for consultants who handle sensitive data. It helps consulting firms recover from data breaches and cyberattacks.
Are you ready to protect your consulting company with a fidelity bond or another type of coverage? Complete Insureon’s easy online application today. Once you find a policy that fits your needs, coverage can begin in less than 24 hours.