What is commercial blanket Bond
Commercial blanket bonds are one of the types of liability insurance for employers that want to protect themselves against losses resulting from dishonest employees. Commercial blanket bonds provide total coverage for all employees of the employer. These bonds, issued with a maximum dollar amount that can cover for any one loss, regardless of the number of available staff. Commercial blanket bonds, also known as the aggregate penalty bonds and fidelity bonds.
Breaking a commercial blanket Bond
In contrast to the position bond, commercial blanket bond may provide coverage for the actions of many employees. Position bonds cover only the activities of the employee in the position. A blanket bond covers all officers and employees of the company for a specified amount of damage or loss. They can provide wide coverage without worrying about schedules cover the damage. Most importantly, all new employees and employees receive an automatic bonding on the day of recruitment. If a newly hired employee commits a dishonest act that leads to financial loss to company or customer, the employer does not have to prove that a particular employee has caused loss to collect on the insurance.
Most commercial lines insurance policies typically cover only losses from external events such as fire, theft and damage of property. This type of a financial instrument may take various forms, such as housekeeping bond or blanket position bond, which automatically extends to new employees. Blanket bonds provide coverage for companies doing business with the General public.
When the insured receives payment on the fraudulent deed, the covered bonds does not decrease for subsequent fraudulent acts of others. Also the coating is applied, if the number of guilty employees cannot be determined.
Example of a commercial blanket Bond
Commercial blanket bonds can vary depending on the industry. Financial institution bonds can provide coverage for commercial and savings banks and to provide coverage in case the employee accepts counterfeit currency in good faith. Policies can also cover losses from extortion, kidnapping employee and demands a ransom. Employees of the state organizations that are responsible for public funds or property may include amounts that reflect the financial responsibility of each employee.
Situations where a blanket bond is to protect the company include, but are not limited to, commercial fraud, embezzlement, material and intellectual theft, and forgery. For example, five to identify the employees in the team steal at$ 50,000. The blanket position bond 10,000 $to cover the damage in full. Commercial blanket Deposit of $ 50,000 will have to pay the insurance business of the same losses.