Fidelity Bonds and Commercial Crime Insurance Quiz

Which of the following is NOT typically covered by a Commercial Crime Policy?

• Natural Disaster

• Forgery or Alteration

• Computer Fraud

• Employee Theft

Answer explanation

A Commercial Crime Policy typically covers risks like forgery, computer fraud, and employee theft. However, it does not cover natural disasters, which are addressed by other types of insurance.

Which of the following is NOT a type of Fidelity Bond?

• Individual Bond

• Position Schedule Bond

• Surety Bond

• Blanket Bond

Answer explanation

A Surety Bond is not a type of Fidelity Bond. Fidelity Bonds protect against employee dishonesty, while Surety Bonds guarantee obligations to third parties. The other options are all types of Fidelity Bonds.

Which type of bond is required by federal law for pension plan fiduciaries?

• Name Schedule Bond

• ERISA Bond

• Public Official Bond

• Business Service Bond

Answer explanation

The ERISA Bond is required by federal law for pension plan fiduciaries to protect against losses due to fraud or dishonesty. This bond ensures that fiduciaries act in the best interest of plan participants.

What is the main difference between suretyship and insurance?

• Suretyship covers natural disasters, insurance does not

• Insurance is more expensive than suretyship

• Suretyship involves three parties, while insurance involves two

• Insurance is only for individuals, not businesses

Answer explanation

The main difference is that suretyship involves three parties: the obligee, the principal, and the surety, while insurance typically involves two parties: the insurer and the insured.

What is the main difference between a Commercial Blanket Bond and a Blanket Position Bond?

• Commercial Blanket Bond covers specific employees, Blanket Position Bond does not

• Blanket Position Bond provides a limit per employee, Commercial Blanket Bond does not

• Commercial Blanket Bond is for public officials, Blanket Position Bond is not

• Blanket Position Bond covers natural disasters, Commercial Blanket Bond does not

Answer explanation

The correct choice highlights that a Blanket Position Bond sets a limit per employee, while a Commercial Blanket Bond does not impose such limits, making them distinct in coverage and liability.

Which type of Fidelity Bond provides a limit per employee involved in a loss?

• Blanket Position Bond

• Individual Bond

• Name Schedule Bond

• Commercial Blanket Bond

Answer explanation

A Blanket Position Bond provides coverage for all employees involved in a loss, with a limit applied per employee. This distinguishes it from other bonds that may not have this specific per-employee limit.

What is a key feature of an ERISA Bond?

• It covers natural disasters

• It is required for public officials

• It guarantees pension plan fiduciaries won't steal funds

• It provides health benefits to employees

Answer explanation

An ERISA Bond is specifically designed to protect pension plans by ensuring that fiduciaries do not misappropriate funds. This makes the correct choice "It guarantees pension plan fiduciaries won't steal funds."

Which of the following is a common feature of modern crime policies?

• Coverage for natural disasters

• Employee Theft coverage

• Health benefits for employees

• Public liability insurance

Answer explanation

Employee Theft coverage is a common feature of modern crime policies, as it protects businesses from losses due to dishonest acts by employees, which is a significant concern for many organizations.

Which type of Fidelity Bond covers all employees with one limit per loss?

• Position Schedule Bond

• Individual Bond

• Name Schedule Bond

• Commercial Blanket Bond

Answer explanation

The Commercial Blanket Bond covers all employees under one limit per loss, providing broad protection against employee dishonesty, unlike other bonds that may cover individuals or specific positions.

Which of the following is a variant of a Fidelity Bond specifically for banks?

• ERISA Bond

• Public Official Bond

• Financial Institution Bond

• Business Service Bond

Answer explanation

The Financial Institution Bond is specifically designed for banks, providing coverage against losses due to employee dishonesty and other risks. The other options do not specifically cater to banks.