Fidelity Bond Insurance
for IT Businesses, Consultants & Subcontractors

Fidelity Bonds insure small IT businesses in the event that one of their employees acts dishonestly and steals property from the business or the business's client.

As an IT contractor, you often have access to a client's data or administrative privileges to their network. In some industries (namely financial ones), it's common for businesses to require their IT contractor to buy an insurance policy that covers them in case an IT employee uses their inside access to…

  • Commit theft or fraud.
  • Electronically transfer funds from the company.
  • Unlawfully access data.

You might have heard that insurance doesn't pay for criminal acts. That's generally true. Though they cover other damages your business causes, General Liability and Errors and Omissions Insurance won't cover criminal damages. But Fidelity Bonds are the exception. These policies protect your business's liability when an employee commits certain crimes.

When Do I Need a Fidelity Bond to Cover My IT Business?

When Do I Need a Fidelity Bond to Cover My IT Business?

If a client contract requires you to have a Fidelity Bond (also called Employee Dishonesty Bond or Commercial Crime Insurance), you need to purchase fidelity bond insurance before you can begin working. This comes up most often for IT consultants who work with clients in the financial services industry.

Banks, investment firms, credit unions, and other companies with access to electronic funds and their customers' financial data generally require IT contractors to have employee dishonesty coverage. Financial companies are under greater scrutiny because state and federal laws have higher standards for these businesses.

What Type of Fidelity Bond Does an IT Contractor Need?

What Type of Fidelity Bond Does an IT Contractor Need?

There are two kinds of Fidelity Bond Insurance:

  • First-party coverage, which covers your business property.
  • Third-party coverage, which covers your clients' property.

IT contractors usually only need third-party coverage and can purchase this policy to meet the requirements outlined in a service agreement or contract they are about to sign with a client.

How Do I Get Fidelity Bond Coverage for an IT Contract?

How Do I Get Fidelity Bond Coverage for an IT Contract?

Here's the situation: you're about to sign a contract with a new client, when you notice a clause that states you'll need $1,000,000 in Commercial Crime Insurance (aka a Fidelity Bond). Before you can sign your name on the dotted line, you need to contact your insurance company.

At insureon, we specialize in IT insurance and can help you get Fidelity Bond Insurance ASAP. You submit an online insurance application, and our IT insurance agents handle your application, sending you a variety of free Fidelity Bond quotes.

After you choose a policy that fits your business, you can download a Certificate of Liability Insurance, which acts as a proof of coverage. You need to show this insurance certificate when you sign the contract. Your client might need to keep a copy of it for their records.

If you hire any subcontractors to work on an IT project, you must make sure their Fidelity Bond coverage meets the client's requirements. If subcontractors can't get their own Fidelity Bond, you may be able to add them to your policy. Their name will appear as an "additional insured" on your insurance certificate.

Grab-n-Go Information

IT Contracts eBook
Get It in Writing: The IT Professional's Guide to Essential Contracts
Browse eBook
Sample certificates
See a sample Certificate of Liability Insurance, the proof of coverage you need for most contracts.
View Sample
Sample Quotes & Cost Estimates
See what insurance really costs: actual quotes by policy & specialty.
Get Estimates
Ask A Question
Submit your questions about construction insurance and get answers from our experts.
Read Answers