Overview
An employee dishonesty bond reimburses a business for losses caused by theft, embezzlement, or fraud committed by its own employees. It is the core of commercial crime and fidelity coverage, and it is often required by clients, lenders, or contracts before a company is trusted with cash, inventory, or sensitive accounts.
Coverage can be written on a blanket basis (all employees) or scheduled (named individuals or positions). Underwriting weighs the coverage limit, headcount, and the strength of the company's internal controls, such as separation of duties and account reconciliation.
This is first-party fidelity coverage: it pays the employer, not a third party. It does not cover dishonesty by owners or losses you cannot tie to an identified employee act, and it is separate from general liability insurance.
Who needs this bond
Retailers, restaurants, professional services firms, and nonprofits handling cash, payroll, or client funds in any meaningful volume.
Typical amount and term
Bond amount commonly 25,000 to 500,000 dollars. Premium typically 200 to 1,500 dollars per year depending on class and employee count.
What this bond costs
Your premium is a small percentage of the bond amount, set by underwriting. The biggest drivers:
- The coverage limit selected
- The number of employees and their access to funds
- The quality of internal financial controls
- Any history of prior losses
| Scenario | Bond amount | Estimated premium |
|---|---|---|
| Small office, $25,000 limit | $25,000 | around $150 to $400 per year |
| Retail or services firm, $100,000 limit | $100,000 | around $500 to $1,000 per year |
| Cash-intensive business, higher limit | $250,000 | priced per $1,000 of coverage with controls credit |
Figures are illustrative premium ranges, not quotes or statutory amounts. Your rate depends on the bond amount your obligee requires and your underwriting profile.
What you will need
- Employee count and approximate cash exposure
- Internal controls description (dual signatures, reconciliation cadence)
- Owner credit authorization
How to apply
- Submit the short fidelity application
- Receive a quote in one business day
- Bond issued, named insured matches your business legal name
How a surety bond differs from insurance
An employee dishonesty bond is first-party crime coverage: it reimburses your business for theft by your staff. It is not a surety bond (which guarantees your performance to an outside party) and it is not liability insurance (which pays for accidents you cause). Many businesses carry it alongside both.
Frequently asked questions
What does an employee dishonesty bond cover?
It covers losses your business suffers from theft, embezzlement, or fraud by your employees, up to the coverage limit.
Can I cover all employees at once?
Yes. A blanket form covers your whole workforce, including new hires, while a scheduled form lists specific people or positions.
Why might a client require it?
Clients, lenders, and contracts often require it before trusting a vendor with cash handling, account access, or valuable inventory.
What is not covered?
Typically dishonesty by the owners, and losses that cannot be tied to an identified employee act. Read the bond form for exact exclusions.
More fidelity bonds
Reviewed by the Cornerstone Surety bond team. Last reviewed 2026-06-17.