The Federal Bonding Program issues fidelity bonds, which are business insurance policies that protect employers in case of theft, forgery, larceny, or embezzlement of money or property by an employee who is covered by the bond. The bond coverage is usually $5,000 with no deductible amount of liability for the employer. Higher amounts of coverage, up to $25,000, may be allowed if justified. The bond does not cover liability due to poor workmanship, job injuries, or work accidents.
Bond packages are issued by the Department of Labor to a purchasing organization such as a job placement agency or employer. The purchasing organization can be public or private, nonprofit or for profit. Then, the job placement organization or employer is able to bond individuals who other bonding agencies usually will not, such as individuals with criminal records.
The bond is put into effect instantly on the first day of employment. The employer simply makes the applicant a job offer and sets a date for the individual to start working. There are no forms or other papers for the employer to sign, and no processing to delay matters.