Fidelity bonds for technology businesses and IT professionals

If an employee engages in unlawful activity, your technology business could be held liable for damages. Fidelity bonds protect technology businesses from employees who illegally access sensitive information or steal from you or a client.

This policy provides liability coverage related to:

• Theft or fraud
• Electronic funds transfer
• Unlawful data access

This coverage is also called commercial crime insurance or employee dishonesty coverage.

There are two kinds of fidelity bonds: first-party and third-party.

First-party fidelity bonds protect your business property and assets from dishonest employees. They can cover expenses related to:

• An employee who steals or embezzles from your company
• An employee who commits fraud against your company
• Employee forgery that affects your company

Third-party fidelity bonds, sometimes called business service bonds, protect your clients’ property from dishonest employees. They can cover expenses related to:

• An employee who steals from a client
• An employee who commits fraud against a client
• Employee forgery that affects a client

IT professionals, especially IT consultants who work with clients in the financial services industry, often need third-party fidelity bonds to satisfy the requirements of a client contract.

Fidelity bonds protect against employee fraud, but your tech company faces many other risks. IT professionals should also consider:

General liability insurance: This policy covers expenses related to client injuries and property damage, such as a slip-and-fall injury in a data analyst's office. Technology businesses can often bundle it with commercial property insurance for savings in a business owner’s policy (BOP).

Errors and omissions insurance (E&O): This policy is critical for IT consultants and many other tech professionals. Also called professional liability insurance, it covers lawsuits related to work mistakes, such as an error that causes a client’s server to crash.

Cyber insurance: You may want to invest in cyber liability insurance to protect your own company’s stored data, such as clients’ credit card numbers, or to protect against lawsuits related to a data breach at a client's business.

Workers’ compensation insurance: This policy covers medical bills and disability benefits from work-related injuries and illnesses. Most states require technology businesses with employees to purchase workers’ compensation.

Commercial auto insurance: This policy is required in most states for business-owned vehicles. It can cover property damage and medical bills in an accident involving your IT company's vehicle, along with theft, vandalism, and weather damage.

Are you ready to protect your IT enterprise with insurance or a fidelity bond? Complete Insureon’s easy online application today to compare quotes for business insurance. Once you find a policy that fits your needs, you can consult a licensed insurance agent to add options such as bonds and endorsements. For most small business owners, coverage can begin in less than 24 hours.