Bonding Insurance: What is it & how can it encourage employers to hire me?

Some employers require their employees to be covered under fidelity bonding insurance, which is a special type of insurance that protects the employer from money or property loss caused by employee dishonesty. If your employer requires fidelity bonding insurance, there are two options: (1) private fidelity bonding insurance, and (2) the Federal Bonding Program.

(1) Private Bonding Insurance—Many private insurance companies sell fidelity bonding insurance that employers can buy. The insurance will reimburse employers for losses due to things like forgery, theft of money or valuables, or fraud by a company employee. An employer can buy insurance coverage for ALL employees, or for only a few, specific employees.[1853] However, if you already have a criminal conviction record, your employer may not be able to get private bonding insurance for you.[1854] In this case, the employer may be able to get bonding insurance through a special federal government program (see immediately below).

(2) Federal Bonding Program—If you already have a criminal conviction record, your employer may not be able to get private bonding insurance for you. If you are applying for a job with an employer who requires employees to be covered by fidelity bonding insurance, the federal government has a special program to provide FREE fidelity bonding insurance for 6 months to cover individuals who are eligible for the program.[1855] In California, the California Employment Development Department (EDD)—the same state agency that runs America’s Job Centers of California—runs the Federal Bonding Program. For more information and instructions on how to apply for the Federal Bonding Program, see Appendix E, PG. 624.

Am I eligible for the Federal Bonding Program?

If you meet the following requirements, you may be eligible for the Federal Bonding Program:

    You have a firm job offer (or are already employed) at a job that is likely to be long-term or permanent.
    The job requires you to be bonded, and you cannot get private bonding insurance due to your arrest or conviction record, history of drug or alcohol abuse, poor credit or employment history, dishonorable discharge from the military, or other “risk” factors.
    The employer is ready to hire you (or keep you on the job) once you have insurance, so the only thing stopping you from working there is the lack of insurance.
    You are 18 or older and legally eligible to work in the U.S.

For a complete list of eligibility requirements, see Appendix E, PG. 624.

IMPORTANT: Your employer can only get free insurance coverage for the first 6 months that you work there; after that they will have to purchase insurance directly. If you switch to another job that also requires bonding, you will have to reapply to the EDD, and they will decide on a case-by-case basis whether you can get new insurance coverage at the new employer. If you left your previous job on good terms, you will have a better chance of getting bonding insurance for your next job, but it is not guaranteed.[1856] For this reason, it’s recommended that you only use the bonding program for jobs that are likely to be long-term or permanent—NOT for temporary positions.[1857]

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  1. 1853

    Here are some insurance companies that offer private fidelity bonding insurance for employers:

    Cal-Nevada Insurance Agency—http://www.cal-nevada.com/business-insurance/fidelity-bonds/

    State Farm Insurance—https://www.statefarm.com/small-business-solutions/insurance/surety-fidelity-bonds

    Nationwide Insurance—http://www.nationwide.com/crime-insurance.jsp.

  2. 1854

    See U.S. Dep’t of Labor, The Federal Bonding Program: Program Background, http://www.bonds4jobs.com/program-background.html.

  3. 1855

    See U.S. Dep’t of Labor, The Federal Bonding Program: Program Background, http://www.bonds4jobs.com/program-background.html.

  4. 1856

    Telephone call with Gil Barkley, State Bonding Coordinator, California Employment Development Department (Feb. 17, 2015). The EDD will also want to make sure that the employer is not simply exploiting you for free insurance coverage and then getting rid of you after the first 6 months of free coverage is over.

  5. 1857

    Telephone call with Maria Alexander and Mary Weaver, Friends Outside in Los Angeles County (Jan. 21, 2015).