E&O: Errors & Omissions

Fidelity and Crime

Many organizations require fidelity bonds to protect against the dishonesty of a firm's employees. The pricing, limits and coverages vary significantly based on the type of organization.

Investment Related Classes

Investment related fidelity bonds is one area in which Mercator Risk Services specializes. Click here to see our Investment Advisors and Other Investment Related Organizations page and click here to see our Private Equity and Hedge Fund page. Fidelity protection is available from specialty markets for computer theft, forgery or alteration of checks and other instruments that are drawn by an investment or fund manager, and theft, disappearance and destruction of money and securities along with other specialized coverages for this class.

Note that a fidelity bond is different from an ERISA bond. An EIRSA bond is structured to meet the specific ERISA guidelines and is required of any entity involved with ERISA plans, including investment advisors managing ERISA funds (such as assets in a 401k plans, for example). Under Section 412(a) of the Employee Retirement Income Security Act of 1974 (ERISA) an ERISA Bond is required of every fiduciary. The amount of the bond must be equal 10% of the amount of the funds handled by the fiduciary for each plan up to a maximum of $500,000 per plan. See our ERISA bond page for more information.

Exposure

Although not well publicized, employee dishonesty claims do occur. The frequency and severity of claims vary significantly by class of business, so coverage is important.

Limits and deductibles vary with the size and type of insured. Standard limits for most small to medium sized organizations start at $250,000, but range up significantly, particularly for investment-related organizations. Policy forms can vary as well. Pricing is reasonable relative to other insurance coverages, but is not free!

Mercator Risk Services provides fidelity coverage for a wide range of professional organizations. Please let us know your client's needs and we will provide you with information and assistance with your particular situation or account, and professional liability coverage.

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