At Jurisco, we know that hiring can be complicated. Hiring can also create a large amount of stress for employers who are concerned about their products and the ramifications if valuable trade secrets find their way to competitors. Specifically, they are concerned that these secrets are going to walk out the front door in the pockets of their employees. There is a surety product, however, that can offset some of that worry. Named an Employee Fidelity Bond, this protective agreement allows employers to rest easier knowing that is an extra layer of protections surrounding their products and design secrets. This year on Bloomberg.com, author Karen Gullo reports on a trade secrets case with billions of dollars in ramifications (see full article here: http://www.bloomberg.com/news/2014-03-05/california-man-guilty-of-stealing-dupont-trade-secrets.html). This is a worst case scenario for many employers in California; but the appropriate application of the employee fidelity bond could stave off isolated cases of employee trade secret theft from becoming an epidemic.
Investopedia defines a fidelity bond as:A form of business insurance that offers an employer protection against losses - either monetary or physical - caused by its employees' fraudulent or dishonest actions. Fidelity bonds are often held by insurance companies and brokerage firms, which are specifically required to carry protection proportional to their net capital. Among the possible forms of loss a fidelity bond covers include fraudulent trading, theft and forgery. (Link)
When applying for a Employee Fidelity Bond (a.k.a. employee dishonesty insurance in Australia) it is important to remember a couple of points: First the bond can be either a ‘blanket bond’ that applies to all employees or it can be specific to an individual and their specific responsibilities. Second, the bond only covers the certain guidelines established in the original agreement. When job functions change, the bond will need to be renewed to reflect the changes.
If you have any more questions regarding Employee Fidelity Bonds please contact the surety bond experts at Jurisco and one of their helpful staff will be happy to answer any questions regarding rates, applications or more information.