WHY DO ORGANIZATIONS NEED FIDELITY BONDS?
Certain government funding sources require that recipients of grants and contracts obtain a fidelity bond. If you offer your employees a 403(B) retirement plan, you are legally required to have ERISA insurance that covers a percent of the plan’s assets. ERISA insurance is an automatic endorsement to the Maryland Nonprofits Fidelity Bond. Some companies that offer 403(B) plans provide the required insurance coverage, others do not. You should check with your 403(B) provider to determine if you need this coverage. In addition, many people believe it is prudent management to have a fidelity bond. A couple hundred dollars per year is easier to budget than to be faced with the potential, however unlikely, of a large loss from employee theft. Contributors may not be pleased if they learn that their donations are going to pay for a deficit caused by a dishonest employee.
