Fidelity Bond (Crime)
Your Parent-Teacher group should run like a business. You have a budget to work within, deadlines to meet, and events to plan.
The main concern in any business is finances. You may have many different officers with check-signing capabilities or trust one of your volunteers to deposit fundraising money.
Although there may be various safeguards set up to protect your funds, there is still a large risk of someone embezzling your money. The Bond (or Commercial Crime) policy is set up to protect your money, scrip, securities, and other cash equivalents against embezzlement, robbery, and theft.
Embezzlement, Robbery and Theft
With the Bond coverage, your funds are covered from embezzlement by anyone that you entrust with your Organization’s money.
Some of the people your Organization might trust with your funds include:
- Officers
- Volunteers
- Members
Position Bond vs. Blanket Bond
There are two types of bonds: Position Bonds (single person) and Blanket Bonds (Organization). Position Bonds usually cover only one person or one position within your Organization.
While this option may seem less expensive than a Blanket Bond, it only protects your Organization if that particular person embezzles the money. For example, if your Organization only bonds the Treasurer, you will find yourself in a difficult position if the President is the guilty party.
The policy that AIM offers is a Blanket Bond. Under a Blanket Bond, it is not necessary to name everyone covered by the bond or the position they hold within your Organization.
Requirements and Conditions
For Bond coverage to apply to your Organization, you must comply with the following requirements:
- Your Organization must conduct an annual audit/review of the books by an audit/review committee (2 or more people organized for the purpose of audit) or qualified accountant.
- The monthly bank reconciliation must be reviewed and signed by someone who does not have the authorization to sign checks. Financial software does not qualify under this requirement.
Coverage may be voided if the above requirements and conditions are not followed.
Safeguarding Your Funds
While the Bond policy is available to protect your funds should they become embezzled or stolen, it is much easier to avoid the situation altogether. With the right safety practices, you can keep your hard-earned funds safe and avoid a disaster altogether.
Exclusions
The Bond policy does not cover funds which disappear by mysterious or unexplained loss. Additionally, if the conditions of the bond policy are not followed, then your claim has the potential of being denied.
Policy Limits
AIM offers three standard coverage amounts:
- $10,000
- $25,000
- $50,000
These are the standard amounts offered, but we offer limits up to $250,000. Please call AIM for pricing.
Police Reports Are Required
Whether you are talking about embezzlement, robbery or theft, these are all very serious illegal crimes. To process a claim, you must notify the authorities in your area and furnish us with a police report naming the individual you suspect embezzled the funds.
This may be the hardest part of any embezzlement claim, as the individual whom you suspect of the crime is probably someone very close to you and other members of the board.
Bond Deductible
There is a $250 deductible for a claim filed under this policy.
Need Coverage?
Understand what you need to insure your organization.
Download our Group Insurance Buyers Guide
Includes:
• Descriptions of coverage
• 10 things you should know
Perfect for reviewing at your
next meeting!
For additional details, download our complete insurance guide.
