Minnesota Federal Bonding Service
WHAT IS BONDING?
Fidelity Bonding is no-cost employee dishonesty insurance that protects employers against employee theft of any money or property.
The Minnesota Federal Bonding Service provides individual Fidelity Bonds to employers for new or current employees who may be denied coverage by commercial carriers because of a:
- Record of arrest, conviction or imprisonment
- History of alcohol or drug abuse
- Poor credit history
- Dishonorable discharge
- Lack of employment history
HOW DOES THE PROGRAM WORK?
Eligibility
Fidelity Bonding may be provided for any individual who:
- Has a job offer with a date set to start work.
- Is an at-risk new or current employee - someone having a background that tends to cast doubt upon the individual's credibility or honesty and creates a barrier to new or continued employment. Usually, such a person is NOT BONDABLE because he/she was denied coverage under commercial bond insurance;
And the job is:
- Full or part-time work for which wages are paid with Federal taxes automatically deducted from the paycheck. Self-employment is not covered by the Minnesota Federal Bonding Service. There are no forms to fill out, or for the employee to sign.
Application
The Fidelity Bond is issued as a policy of Travelers Property Casualty. The Minnesota Department of Employment and Economic Development is an authorized agency for the issuance of these Fidelity Bonds.
The employer can contact the Minnesota Federal Bonding Coordinator to apply for a Fidelity Bond.
The Fidelity Bond coverage for current employees is effective when the Minnesota Federal Bonding Coordinator certifies the bond.
Coverage
The Fidelity Bond has a "no deductible" amount and the amount of insurance usually issued is $5,000. The Fidelity Bond is mailed to the employer by Travelers Property Casualty.
The duration of the Fidelity Bond is six months. If the bondee demonstrates honesty during the six months, Travelers Property Casualty will make a standard commercial policy available for the employer to purchase.
HOW SUCCESSFUL IS THE PROGRAM?
- More than 40,000 bonds have been issued.
- 99 percent of bondees prove to be honest employees.
An evaluation study by Texas A & M University found that the use of bonding with other services to achieve job placements for Texas prison releasees resulted in:
- The generation of approximately $1,000 per year in State and local taxes by each employee.
- 40 percent reduction in the reincarceration rate.
- A savings of $10 million per year for Texas in potential reincarceration costs.
TO OBTAIN A BOND IN MINNESOTA, CONTACT:
Minnesota Federal Bonding Coordinator
PHONE: 651.259.7500 (Twin Cities area)
TOLL FREE: 800.345.2537
EMAIL: deed.jobbank@state.mn.us