Before you get into all of the benefits associated with this type of bond, you should take the time to learn exactly what it is! A Fiduciary bond is actually a type of insurance, which can protect your business from all different types of problems, including fraud and embezzlement. The bond helps to ensure that the person you put in charge to act on behalf of your business’s interest will fulfill their duties and will remain honest and faithful. In some cases, these bonds are used as a way to ensure that taxes or debts are paid in full.
You should also realize that you’re not the only party involved in this equation. There are three parties involved and they are all responsible for upholding their end of the deal. For your consideration, these three parties will be explored in more depth below.
By obtaining this type of bond, as the obligee, you will be able to keep the principal honest, at all times.
The majority of construction contractors will use a third party accountant or advisor to manage their finances. This is usually safe, but a fiduciary bond can help to keep them on the straight and narrow. If you discover that the accountant, or principal, has behaved illegal and has committed fraud, you will be able to file a claim against them! The bond’s backing can be used to help you recover the damages and losses incurred. This will encourage the principal to remain truthful and trustworthy, during their time with your business.
Everyone relies on individuals that are employed in a bank, probate, or other financial institution. In order to ensure you that the employees will carry out their job duties professionally and responsibility, a fiduciary bond is enacted. These bonds not only ensure you as an employer that the employee will act accordingly, but it will also protect your clients from financial loss.
Individuals that are facing bankruptcy, divorce, or a probate hearing can request a fiduciary bond. There are some instances where this type of bond is required and must be initiated by the client or customer. A bond company will complete a full background and credit history check on the trust advisor involved in your specific case.
When it comes down to it, almost any business can benefit tremendously from a fiduciary bond! This is especially true, when it comes to construction contractors. If you want to protect your business from fraud and embezzlement, you’ll want to purchase a fiduciary bond from us immediately!