- Fidelity bonds
- Fidelity bonds provide reimbursement if one of your employees commits fraud, theft, or forgery against a client or your business. They are often required by client contracts.
Fidelity bonds protect against dishonest employees
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
What coverage do fidelity bonds provide?
There are two kinds of fidelity bonds: first-party and third-party.
First-party fidelity bonds
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
Third-party fidelity 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.
Other important policies for technology professionals
General liability insurance: This policy covers expenses related to client injuries and property damage, along with advertising injuries like slander. Technology businesses can often bundle it with property insurance for savings in a business owner’s policy.
Technology errors and omissions insurance: 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 liability insurance: While technology E&O covers third-party cyber liability, you may want to invest in first-party cyber liability insurance to protect your own company’s stored data, such as clients’ credit card numbers.
Workers’ compensation insurance: Most states require technology businesses with employees to purchase workers’ compensation. This policy covers medical bills and partial lost wages from work-related injuries and illnesses.
Commercial auto insurance: This policy is required for business-owned vehicles. It can cover property damage and medical bills in an accident involving your IT company vehicle, along with theft, vandalism, and weather damage.