The bond behind "bonded and insured," so your clients are protected and you can say so.
A business services bond is a third party fidelity bond. It reimburses your clients when an employee, or you while doing the work, steals money or property from their premises. Blanket coverage for all your clients or a bond naming one customer. No background checks. No declined applicants.
✓ Owner covered while doing the work✓ Blanket or client specific✓ No background checks✓ All 52 states and territories
The plain-English version
What a business services bond actually does
A business services bond pays your client, not you, when your employee steals from the client's home or business while performing your services. It is the inexpensive way to give clients real protection and to advertise as a bonded enterprise.
Employee theft of client property is common, and it lands on the service business twice: once as the client's loss and again as the lost account and the reputation that follows. The business services bond is the fidelity industry's answer for the "on premises" peril, the housekeeper in the home, the janitor in the office after hours, the mover in the garage, the aide with the elderly parent, the sitter with the house key.
The bond can be written blanket, covering every client you serve, which is what lets you put "bonded" on the truck and the website. It can also be written client or contract specific, naming a single customer, which is convenient when a bank, a property management company or a high net worth household requires dishonesty coverage as a condition of doing business with you.
Like every fidelity bond, it can be written on a discovery basis, covering losses discovered during the bond term, or on a loss sustained basis, covering only losses that both occur and are discovered during the term, with an extended discovery period available. And most small business services bonds carry a conviction or indictment clause, explained below, which decides when a claim is paid.
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Protecting your own money as well as your clients'?
The business services bond protects your clients. A commercial crime policy protects your own business from employee theft, forgery, computer fraud and funds transfer fraud. They are both fidelity bonds, and they are bought together more often than not.
Consultants, attorneys, IT and software firms, general contractors and other businesses working on client premises under contract use the same instrument at higher limits; use the third party fidelity bond application. Also bonded: home inspectors, real estate brokers, towing and recovery, auctioneers, public adjusters, limousine and ride share operators, carpenters and construction trades. Do not see your class? Apply anyway. We decline no applicants. All classes on SuretyOne.com →
Read this before you buy
The clauses that decide whether a claim is paid
Small business services bonds are simple instruments with three provisions worth understanding.
Trigger
Discovery vs. loss sustained
A discovery form insures losses discovered during the active term, whenever they occurred. A loss sustained form insures only losses that occur and are discovered during the term; an extended discovery period can generally be purchased to soften that limit.
Condition
Conviction or indictment clause
Common in small business services bonds. A conviction clause bars payment of a dishonesty claim unless the offending employee is criminally convicted; where allowed, an indictment clause substitutes indictment for conviction. A few jurisdictions prohibit conviction requirements. The clause deters frivolous and fraudulent claims by obligating the insured to pursue the offender, and it should be weighed before purchase.
Scope
Blanket vs. client specific
Blanket bonds cover all clients of the principal and support advertising as bonded. Client or contract specific bonds name one customer, which suits a bank, a property manager or a household that demands dishonesty coverage as a condition of the engagement.
Insured persons
Employees, and the owner at work
The bond covers theft by your employees on the client's premises. It also covers the owner when the owner is performing the duties of an employee, the sole proprietor who personally does the cleaning, the sitting or the repair. It does not cover the owner's business disputes with the client.
What it costs
Inexpensive, and quoted free
Typical annual premium
A few hundred dollars
Orientation for the common limits at typical service businesses. Premium moves with the limit, the number of employees and the class of service.
Bond amounts available
$5,000 to $100,000
Most clients and contracts ask for $10,000 to $50,000. Higher third party fidelity limits are available on the standard application.
Application review and quoting are free of charge and carry no obligation to purchase. Figures are general orientation, not a quote. Coverage is governed solely by the issued bond.
Questions we hear weekly
Business services bond FAQ
What is a business services bond?
A third party fidelity bond. It reimburses your clients when your employees, or you while performing the duties of an employee, steal money or property from the client's premises. It is what a service business means when it advertises as bonded. Limits commonly run from $5,000 to $100,000.
Does it cover the owner?
Yes, when the owner is performing the duties of an employee, for example a sole proprietor who personally cleans a client's home or sits a client's pets. It does not cover the owner's own contractual or business disputes with the client.
Is it the same as a commercial crime policy?
Both are fidelity bonds, but they protect different parties. A commercial crime policy reimburses your own business for theft of its own money and property. A business services bond reimburses your clients for theft of their property by your staff on their premises. Many service businesses carry both.
What is a conviction clause?
A common provision in small business services bonds that conditions payment of a dishonesty claim on the criminal conviction of the offending employee. Where allowed it is often replaced by an indictment clause. The clause deters frivolous and fraudulent claims by obligating the insured to pursue the offender, and it should be understood before purchase.
Blanket or client specific: which should I buy?
A blanket bond covers all of your clients and lets you advertise as bonded. A client or contract specific bond names one customer, which is convenient when a bank, property manager or high net worth household requires dishonesty coverage as a condition of the engagement. Both are available.
How much does it cost?
Typically a few hundred dollars per year for common limits. Premium depends on the limit, the number of employees and the class of service. Application review and quoting are free and carry no obligation.
Do I need a background check?
No. Surety One requires no background checks for business services bonds and declines no applicants.
Get bonded today
Three minutes online, quoted free, no obligation. Or call and a Surety One underwriter will take it over the phone.
All three are fidelity bonds. Pick the one that matches whose loss you are insuring. You can switch at any time before you submit.
Not sure? A commercial crime policy insures your money; a third party or business services bond insures your clients' property. Many service businesses carry both. Call (800) 373-2804 and an underwriter will point you to the right one.
Applicant
This application is accepted for privately held commercial companies and nonprofit organizations with 250 or fewer employees, $100 million or less in assets and $100 million or less in revenues. It is not accepted for public companies, government entities or financial institutions; those risks are underwritten on the standard application, so call (800) 373-2804.
Employees, volunteers & locations
Employee count should include full time and part time employees, including leased, seasonal and temporary. Fidelity coverage insures an employer against the dishonesty of its employees, so a company of one does not qualify.
Does the applicant wish to include additional entities (affiliates, partnerships, joint ventures)? Receipt of this information does not constitute an agreement that coverage will be provided to the listed entities.
Specified property, all locations combined
Retail checks are only those checks accepted as immediate payment for retail products or services.
Financial information
Applicant's most recent fiscal year end figures. Attach the latest annual financial statement and CPA management letter for limit requests over $5,000,000.
Creditors
During the past 24 months has the applicant experienced, or during the next 12 months does the applicant anticipate, any reorganization or arrangement with creditors under federal or state law?
Internal control
Every question in this section is material to underwriting. The first three establish the separation of duties that fidelity coverage requires.
Bank account reconciliation
Does someone other than the person responsible for reconciling bank accounts make deposits? *
Does someone other than the person responsible for reconciling bank accounts make withdrawals? *
Does someone other than the person responsible for reconciling bank accounts sign checks? *
Checks
Is countersignature of checks required?
Are all incoming checks stamped "for deposit only" immediately upon receipt?
Segregation of duties
Segregation of duties: inventory management?
Segregation of duties: vendor approval?
Segregation of duties: purchase order approval and payment?
Segregation of duties: cash receipts?
Segregation of duties: oversight of blank check stock?
Segregation of duties: retail checks and credit card receipts?
Hiring process
Inventory, transfers & systems
Is a physical count of inventory conducted at least annually?
Are inventory records computerized?
Is dual authorization required for all wire transfers?
Is there a software security system in place to detect fraudulent computer usage by employees, agents and outsiders?
Are EDP systems, programs and procedures, including changes thereto, authorized, documented and tested?
Characteristics & exposures
Loss history
Losses during the last three years, whether or not insured. Attach a separate sheet for any others.
Has the applicant discovered any loss from employee dishonesty, forgery, theft, robbery, burglary, computer fraud or funds transfer fraud during the last three years?
Coverage
Basics, then the limit and retention you want for each insuring coverage. Leave blank any you do not need.
Basics
Requested crime coverage
If coverage for employee theft of client property is requested, also complete the third party fidelity bond application. Limit requests over $5,000,000 require the latest annual financial statement and CPA management letter.
Desired insuring coverageLimit of insuranceRetention
Fidelity: employee theft
Fidelity: ERISA fidelity
Fidelity: employee theft of client property
Forgery or alteration
On premises (money, securities and other property)
In transit (money, securities and other property)
Money orders and counterfeit paper currency
Computer crime and funds transfer fraud
Social engineering (fraudulent impersonation), by endorsement
Review & submit
Authorized representative and the declaration required to submit your application.
Authorized representative
Declaration
State fraud statements
Alabama: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or who knowingly presents false information in an application for insurance is guilty of a crime and may be subject to restitution fines or confinement in prison, or any combination thereof.
Arkansas, Louisiana, Rhode Island, West Virginia: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.
Colorado: It is unlawful to knowingly provide false, incomplete, or misleading facts or information to an insurance company for the purpose of defrauding or attempting to defraud the company. Penalties may include imprisonment, fines, denial of insurance, and civil damages. Any insurance company or agent of an insurance company who knowingly provides false, incomplete, or misleading facts or information to a policyholder or claimant for the purpose of defrauding or attempting to defraud the policyholder or claimant with regard to a settlement or award payable from insurance proceeds shall be reported to the Colorado division of insurance within the department of regulatory agencies.
District of Columbia: WARNING: It is a crime to provide false or misleading information to an insurer for the purpose of defrauding the insurer or any other person. Penalties include imprisonment and/or fines. In addition, an insurer may deny insurance benefits, if false information materially related to a claim was provided by the applicant.
Florida: Any person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim or an application containing any false, incomplete, or misleading information is guilty of a felony of the third degree.
Hawaii: For your protection, Hawaii law requires you to be informed that presenting a fraudulent claim for payment of a loss or benefit is a crime punishable by fines or imprisonment, or both.
Kentucky: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance containing any materially false information or conceals, for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime.
Maine, Tennessee, Virginia, Washington: It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding the company. Penalties may include imprisonment, fines or denial of insurance benefits.
Maryland: Any person who knowingly or willfully presents a false or fraudulent claim for payment of a loss or benefit or who knowingly or willfully presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.
New Jersey: Any person who includes any false or misleading information on an application for an insurance policy is subject to criminal and civil penalties.
New Mexico: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to civil fines and criminal penalties.
New York: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information, or conceals for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent insurance act, which is a crime and shall also be subject to a civil penalty not to exceed five thousand dollars and the stated value of the claim for each such violation.
Ohio: Any person who, with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or files a claim containing a false or deceptive statement is guilty of insurance fraud.
Oklahoma: WARNING: Any person who knowingly, and with intent to injure, defraud or deceive any insurer, makes any claim for the proceeds of an insurance policy containing any false, incomplete or misleading information is guilty of a felony.
Pennsylvania: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties.
Puerto Rico: Any person who knowingly, and with the intention of defrauding, presents false information in an insurance application, or presents, helps, or causes the presentation of a fraudulent claim for the payment of a loss or any other benefit, or presents more than one claim for the same damage or loss, shall incur a felony and, upon conviction, shall be sanctioned for each violation by a fine of not less than five thousand dollars ($5,000) and not more than ten thousand dollars ($10,000), or a fixed term of imprisonment for three (3) years, or both penalties. Should aggravating circumstances be present, the penalty thus established may be increased to a maximum of five (5) years. If extenuating circumstances are present, it may be reduced to a minimum of two (2) years.
Attachments (you can send these to underwriting after submitting): the latest annual financial statement and CPA management letter for limit requests over $5,000,000; a separate page or organization chart for each additional entity; and a separate sheet detailing any other losses during the last three years.
Applicant
The business, or individual, applying for the bond.
Hiring and employment
How you screen the people who will work inside your clients' premises.
Does the applicant perform background checks?
Does the applicant contact personal references?
Does the applicant contact past employment references?
Does the applicant review criminal records?
Does the applicant conduct drug testing?
Employee and client relationship
Access, supervision and what your people can reach on the client's premises.
Will the applicant and/or the applicant's employees:
Have restricted access (keycards or similar devices) to locked areas of the client's physical premises?
Be supervised or monitored while performing services on the client's premises?
Be required to wear or carry identification (an ID badge) that identifies them as non employees of the client?
Perform services only during normal business hours (9am to 5pm)?
Access and scope
Will the applicant and/or the applicant's employees have access to money, securities, banking systems, wire transfer systems, or sensitive computer data belonging to the client(s)?
Will the applicant and/or the applicant's employees perform any off premises services for the client(s)?
Prior knowledge and losses
Does the applicant have any knowledge of an employee stealing from a client that has given rise, or may give rise, to a claim in the previous five years?
In the past five years, has any contracted client sustained a loss caused by your dishonest employee, whether or not you were reimbursed by insurance?
Third party crime coverage
Attach a copy of each client contract for which coverage is requested when you send your submission.
Contract specific coverage
Are any services performed for the contracted client off the client's premises?
Are you presently bidding on this contract?
Is this contract presently in effect?
Blanket coverage
Are any services performed for contracted clients off the clients' premises?
Policy
The bond you are requesting and any preceding policy.
Review & submit
Applicant representative and the declarations required to submit.
Applicant representative
Declarations
State fraud statements
Alabama: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or who knowingly presents false information in an application for insurance is guilty of a crime and may be subject to restitution fines or confinement in prison, or any combination thereof.
Arkansas, Louisiana, Rhode Island, West Virginia: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.
Colorado: It is unlawful to knowingly provide false, incomplete, or misleading facts or information to an insurance company for the purpose of defrauding or attempting to defraud the company. Penalties may include imprisonment, fines, denial of insurance, and civil damages. Any insurance company or agent of an insurance company who knowingly provides false, incomplete, or misleading facts or information to a policyholder or claimant for the purpose of defrauding or attempting to defraud the policyholder or claimant with regard to a settlement or award payable from insurance proceeds shall be reported to the Colorado division of insurance within the department of regulatory agencies.
District of Columbia: WARNING: It is a crime to provide false or misleading information to an insurer for the purpose of defrauding the insurer or any other person. Penalties include imprisonment and/or fines. In addition, an insurer may deny insurance benefits, if false information materially related to a claim was provided by the applicant.
Florida: Any person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim or an application containing any false, incomplete, or misleading information is guilty of a felony of the third degree.
Hawaii: For your protection, Hawaii law requires you to be informed that presenting a fraudulent claim for payment of a loss or benefit is a crime punishable by fines or imprisonment, or both.
Kentucky: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance containing any materially false information or conceals, for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime.
Maine, Tennessee, Virginia, Washington: It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding the company. Penalties may include imprisonment, fines or denial of insurance benefits.
Maryland: Any person who knowingly or willfully presents a false or fraudulent claim for payment of a loss or benefit or who knowingly or willfully presents false information in an application for insurance is guilty of a crime and may be subject to fines and confinement in prison.
New Jersey: Any person who includes any false or misleading information on an application for an insurance policy is subject to criminal and civil penalties.
New Mexico: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance is guilty of a crime and may be subject to civil fines and criminal penalties.
New York: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information, or conceals for the purpose of misleading, information concerning any fact material thereto, commits a fraudulent insurance act, which is a crime and shall also be subject to a civil penalty not to exceed five thousand dollars and the stated value of the claim for each such violation.
Ohio: Any person who, with intent to defraud or knowing that he is facilitating a fraud against an insurer, submits an application or files a claim containing a false or deceptive statement is guilty of insurance fraud.
Oklahoma: WARNING: Any person who knowingly, and with intent to injure, defraud or deceive any insurer, makes any claim for the proceeds of an insurance policy containing any false, incomplete or misleading information is guilty of a felony.
Pennsylvania: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties.
Puerto Rico: Any person who knowingly, and with the intention of defrauding, presents false information in an insurance application, or presents, helps, or causes the presentation of a fraudulent claim for the payment of a loss or any other benefit, or presents more than one claim for the same damage or loss, shall incur a felony and, upon conviction, shall be sanctioned for each violation by a fine of not less than five thousand dollars ($5,000) and not more than ten thousand dollars ($10,000), or a fixed term of imprisonment for three (3) years, or both penalties. Should aggravating circumstances be present, the penalty thus established may be increased to a maximum of five (5) years. If extenuating circumstances are present, it may be reduced to a minimum of two (2) years.
Attachments: a copy of each client contract for which third party crime coverage is requested. Send them to Underwriting@SuretyOne.com after submitting.
Applicant
Credit and background checks are not required. Employees should include the owner when the owner performs the services.
Do you verify the employment background of prospective employees?
Does the owner personally perform services on clients' premises?
Bond
The bond you need. If one client or contract is asking for it, complete the contracted client section as well.
History
Have you sustained any employee dishonesty losses in the last six years, including those sustained by contracted clients and those reimbursed by insurance?
Has any request for a fidelity bond been declined in the last six years?
Contracted client (if the bond is for a specific client or contract)
Are you presently bidding on this contract?
Is this contract presently in effect?
Review & submit
Principal and the affirmation required to submit.
Principal
Affirmation
Conviction requirement clause. Most small business services bonds condition payment of a dishonesty claim on the criminal conviction of the offending employee (or, where permitted, indictment). You must be willing to pursue the offender. On premises. The bond covers theft of a client's money or property by your employee while performing your services at the client's premises; it does not cover your own business's money, disputes over the quality of your work, or loss away from the client's premises unless endorsed.
✓
Your application has been submitted
Preparing your application…
Keep the PDF for your records. If you have attachments (financial statements, expiring declarations, loss runs, client contracts), reply to the confirmation or email them to Underwriting@SuretyOne.com.