Financial Institution Bond

The Financial Institution Bond provides fidelity coverage as required by regulators for financial institutions. These coverages are provided through an enhanced version of the Surety Association Form 24, Revised to January 2004. Four Insuring Agreements comprise “basic” coverage:

Insuring Agreement A - Fidelity
As employee dishonesty represents the greatest threat to a financial institution, Agreement A is the most important part of a financial institution’s Bond coverage. Agreement A covers dishonest or fraudulent acts committed by employees acting alone or in collusion with others. Note that the employee must have intended to cause a loss to the financial institution and to obtain an improper financial benefit for the employee or another. If some or all of the loss results from loans, the employee must also have been in collusion with a party to the transaction and received an improper financial benefit.

Insuring Agreement B - On Premises
Agreement B covers losses resulting from burglary, robbery, misplacement, or mysterious unexplainable disappearance of property (except while in transit). Losses resulting from theft, false pretenses, and larceny are also covered if committed by a person while on the premises of the bank. Damage to the insured’s furniture or fixtures resulting from the above-listed acts is also covered under this Insuring Agreement (unless caused by fire).

Insuring Agreement C - In Transit
Agreement C covers losses of certain defined property, including money, while in transit. Losses must be a direct result of robbery, larceny, theft, misplacement, mysterious unexplainable disappearance, damage or destruction to the property. If the property is being carried by a transportation company but not in an armored vehicle, only records, certificated securities in registered form and not endorsed (or with restrictive endorsements), and negotiable instruments not payable to the bearer and not endorsed (or with restrictive endorsements), are covered.

Insuring Agreement F - Counterfeit Money
Agreement F, as expanded by rider, covers losses resulting from the financial institution having received in good faith counterfeit currency of any country.


In addition to coverage afforded by the Bond form, the following enhancements and additional coverages are offered:
  • Elimination of the Aggregate Limit of Liability.
  • Counterfeit check coverage is included within the Forgery or Alteration Insuring Agreement and covers losses due to counterfeiting of checks and other negotiable instruments, whether or not they are forged.
  • Audit Expense coverage reimburses expenses incurred for audits or examinations required by state or federal authorities to establish an employee dishonesty loss.
  • Claims Expense coverage reimburses expenses incurred and paid by the bank in preparing a covered claim for an employee dishonesty loss.
  • Reward Payment Coverage reimburses the bank for paying a reward for information leading to the capture of a robber or burglar.

Applications for banks <$150
All States except NY  
NY version  

Applications for banks >$150
All States except NY
NY version

Notwithstanding any language to the contrary, nothing contained herein constitutes nor is intended to constitute an offer, inducement, promise, or contract of any kind. All coverage descriptions and claims examples are provided for informational and educational purposes only and are not a representation as to coverage for any particular claim and are not represented to be error free. Coverage for any claim is determined upon the specific facts of the claim, the terms and conditions of the policy and applicable law. For details on the coverage provided by your specific contract of insurance, please refer to your policy. Coverage is subject to underwriting guidelines and may not be available in all states. Limits may be capped for underwriting reasons. Any links to any sites which are not originated by ABA Insurance Services Inc. (ABAIS) are provided only as a courtesy and are not intended to nor do they constitute an endorsement by ABAIS of the linked materials.