Business services (fidelity) bonds. If you have employees working on customer’ premises, this type of bond will provide coverage for employees’ fraudulent or dishonest acts. For example, if you have a cleaning service, this bond will reimburse you if your employee steals from a customer. You can then use the proceeds to reimburse your customer.
Fidelity bonds for pension plans. If your business has a defined benefit (pension) plan, you are required by tax law to have a fidelity bond equal to at least 10% of the assets. The maximum bond required is $500,000 ($1 million if the plan holds employer securities). No deductible is allowed in the bond and it must be in the name of the plan or trust (not the employer), or the bond must specifically state that the plan or plans (by name) are covered and that the general bond deductible doesn’t apply per ERISA requirements. The bond protects against dishonesty by those handling the company’s pension plan.
Tax bonds. If the IRS has placed a tax lien on your property, you can get the lien released by posting a bond; the release is made within 30 days of IRS acceptance of the bond. This type of bond is not commonly used, however, because most businesses subject to a tax lien use funds to pay down (or off) the tax debt that triggered the lien rather than to obtain a bond.