Blanket Position Bond

Example

“The bank's blanket position bond covers all tellers and loan officers up to $100,000 per position, automatically including new employees in these roles without additional paperwork.”

Memory Tip

Remember 'Position, not Person' - this bond covers the job role, so anyone filling that position is automatically covered.

Why It Matters

This coverage provides seamless protection for businesses with high employee turnover in sensitive positions, eliminating gaps in coverage when employees leave or are hired. It's particularly crucial for financial institutions, retailers, and any business where employees handle cash or have access to valuable assets.

Common Misconception

Employers often think they need to notify their insurer every time someone is hired or leaves a covered position, but blanket position bonds automatically adjust coverage based on who currently fills the bonded positions. However, significant changes in position responsibilities or the number of positions may require policy updates.

In Practice

A credit union has a blanket position bond covering all teller positions for $75,000 each. When three tellers quit and four new tellers are hired within a month, coverage automatically transfers to the new employees without any action required. If one new teller steals $45,000 from customer accounts, the bond pays the claim even though that specific individual was never individually underwritten or named in the policy.

Etymology

This term evolved from traditional individual fidelity bonds, with 'position' referring to job roles rather than specific persons, allowing for more flexible employee coverage as staff changes occur.

Common Misspellings

Related Terms

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Other insurance terms you should know

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