Definition
A Position Schedule Bond is a specific type of fidelity bond that offers protection to an employer against losses arising from dishonest or fraudulent acts committed by designated employees. This bond enumerates the positions covered rather than the individuals, ensuring that the roles, irrespective of who occupies them, are secured against acts of dishonesty.
Examples
Example 1: Financial Institution
A financial institution uses a Position Schedule Bond to cover positions such as tellers, loan officers, and cashiers. This bond ensures that, no matter who holds these positions, the institution is protected against potential embezzlement or theft.
Example 2: Retail Business
A retail chain employs a Position Schedule Bond to secure managerial roles. If any manager commits acts of inventory theft or financial fraud, the bond provides coverage for the resultant losses to the business.
Frequently Asked Questions
What is the main difference between a Position Schedule Bond and a Blanket Fidelity Bond?
A Position Schedule Bond specifically lists the positions covered, while a Blanket Fidelity Bond covers all employees without specifying roles.
How is the coverage limit determined for a Position Schedule Bond?
The coverage limit is often set based on company policies or industry standards for the value of assets typically handled by the covered positions.
Can a Position Schedule Bond be adjusted?
Yes, businesses can adjust the positions covered by adding or removing specific roles as needed, ensuring the bond is always aligned with current organizational structures.
Who typically requires a Position Schedule Bond?
Institutions like banks, retail stores, and businesses handling significant cash or assets often require these bonds to mitigate risk and ensure financial protection against employee misconduct.
Is the Position Schedule Bond and Fidelity Bond synonymous?
No, a Position Schedule Bond is a type of Fidelity Bond. Fidelity Bonds come in various forms, and Position Schedule Bond is just one specific kind focusing on positions rather than individuals.
Related Terms
Fidelity Bond
A Fidelity Bond is a form of insurance that covers policyholders for losses incurred due to fraudulent acts by specified individuals.
Surety Bond
A Surety Bond is a contract among at least three parties—the principal, the obligee, and the surety—ensuring that the principal fulfills their obligations.
Blanket Bond
A Blanket Bond provides coverage against employee dishonesty without listing individual employees or positions, covering all employees collectively.
Online References
Suggested Books for Further Studies
- The Complete Guide to Bonds, Warrants, & Other Derivatives by Steven V. Mann
- Surety Bonds for Construction Contracts by Richard C. Leissner
- Handbook of Business Insurance by Solomon S. Huebner
Fundamentals of Position Schedule Bond: Business Insurance Basics Quiz
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