In 1974, the Employee Retirement Income Security ACT (ERISA) was enacted to regulate most types of employee benefit plans. This Act requires a fidelity bond covering a fiduciary and a person who handles funds or other property of such a plan.
What is Covered
The coverage is intended to protect plans from dishonesty and fraud committed by individuals who are associated with them. A fidelity bond is insurance coverage which reimburses an employer for losses resulting from dishonest acts of employees. Fidelity bonds may be written to cover specific employees or all employees, using either a schedule or blanket basis or by scheduling positions versus named persons.