Dishonesty bonds are a type of bond that can protect your business from employee theft or other types of dishonest acts. This type of bond can be beneficial for businesses in several different industries. Here are some of the main benefits of these bonds.
Protect Against Bankruptcy
The main benefit of this type of bond is to protect a business from going bankrupt due to employee dishonesty. These acts can include various employee acts, such as theft, forgery, embezzlement, and destruction of property or assets. This type of insurance applies to small businesses in any industry.
Prevent Market Failure
Additionally, in industries with low-paid employees who have access to customers’ valuables, such as cleaning services where insurance is not always an option, these can help prevent market failure. With these bonds, employees are prevented from going on a stealing spree that will force businesses to shut down if the perpetrator is not brought to justice. Without these bonds, industries with these characteristics would be deemed too risky for customers, and the result would be a total market failure.
Improve Risk Management
Meanwhile, larger firms can benefit from these bonds because they can help improve their risk management strategy. Since most large companies have the capital necessary to purchase insurance against employee theft, this may seem like a strange option. However, market risk tends to be the primary focus of large businesses, and employee theft is often not incorporated into their management strategy. To remedy this problem, they can purchase bonds that protect against employee theft and dishonesty to ensure a solid strategy.
A dishonesty bond can be the way to go for a variety of businesses. They offer protection from acts of employee theft or dishonesty. Aside from this, they offer these other crucial benefits that make investing in them worthwhile.
