Financial Institution Bond

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A financial institution bond is a fidelity bond, or special commercial crime policy designed for the specific risks associated with the covered's financial activity. Previous to the standardization of coverage forms by the Surety & Fidelity Association of America (SFAA), bond forms were manuscripted on a bespoke basis to fit a specific institution's exposures. From the 1950s forward, a series of form standardizations took place. Many surety and fidelity companies now follow those SFAA templates which are numbered by class.

Financial Institution Bond Standard Form No. 14

This fidelity bond is designed to offer appropriate coverages for stockbrokers or business houses engaged principally in the management of or dealing in securities listed on recognized stock exchanges, stock exchanges, the Securities Investors Protection Corporation, investment bankers and Investment trusts (with the exception of REITs), mutual funds, foundations and endowment funds, and commodity brokers who are members of a recognized Stock Exchange. This bond is also known as a Broker Dealer Fidelity Bond required by FINRA Rule 4360.

Financial Institution Bond Standard Form No. 15

This fidelity bond is designed to offer appropriate coverages for finance companies deal in financing paper for and through dealers, investment or finance companies licensed under the Small Business Administration Act, small loan companies, mortgage bankers and dealers in Mortgages, dealers in commercial paper and note brokers, title insurance companies principally engaged in the mortgage business (see Financial Institution Bond Forms 24 and 25 for insurance companies) holding companies that do not operate the business under their control but act as managers of the stocks and securities in their custody, and REITs. This fidelity bond is also known as a Mortgage Banker Bond.

Credit Union Blanket Bond - Financial Institution Standard Fidelity Form No. 23

This fidelity bond is designed to offer appropriate coverages for credit unions, mutual benefit associations and remedial loan associations in Connecticut that do NOT offer accident, health, death or burial benefits to their members, and the National Credit Union Share Insurance Fund.

Financial Institution Bond Standard Form No. 24

This fidelity bond is designed to offer appropriate coverages for national commercial banks (N.A.s), state commercial banks and trust companies, the American agencies of foreign banks, the Cooperative Credit Associations of Nebraska, industrial banks and Morris Plan banks, title insurance companies that act specifically as trust companies or that accept deposits for savings or checking accounts, and federal financial institutions such as the Federal Reserve Banks, Federal Deposit Insurance Corporation, joint stock land banks, federal home loan and land banks. Savings banks, S&L associations, building and loan associations, cooperative banks in Massachusetts and homestead associations in Louisiana can be offered this fidelity bond coverage by special rider.

Financial Institution Bond Standard Form No. 25

This fidelity bond is designed to offer appropriate coverages for insurance and reinsurance companies of all kinds including title insurance companies doing principally a title insurance business (no those covered under Financial Institution Bonds 15 and 24), self-insurance and risk retention groups (RRGs).

Financial Institution Bond Standard Form No. 28 - Excess Bank Employee Dishonesty Bond

This fidelity bond is designed to offer and excess layer of insurance above the primary layer provided under the banker's blanket fidelity bond (Form 24). The bond covers losses resulting directly from the dishonest or fraudulent acts of an employee with the manifest intent to cause the institution a loss and to obtain a financial benefit for him/herself or another person or entity.

All of the preceding financial institution bonds regardless of their monikers are commercial crime policies (fidelity bonds). While special riders and endorsements can and are often added to the bonds, most basic forms provide the same general coverage parts which include:

  • Employee theft
  • Depositors forgery or alteration
  • Theft, disappearance and/or destruction of money and securities
  • Robbery and safe burglary
  • Computer Crime (theft, funds transfer fraud, etc.)
  • Counterfeit currency/money orders

These basic coverage parts are enhanced by riders or industry-specific coverage forms. For example, financial institution bond form 14 (broker dealer bond) may be endorsed with registered representatives (FINRA) coverage. Financial institution bond form 25 addresses the exposures of insurers and is broadened with the addition of Coverage Agreement "G" , fraudulent mortgages. Most financial institution bond applicants also add protection for the perils associated with modern internet business activity. Policy forms for cyber intrusion and social engineering are now regularly added to the basic financial institution coverage suites. Visit for more.

National surety leader, Surety One, Inc. is a specialist in the bonding needs of financial institutions We offer both surety and fidelity bonds needed by financial sector professionals in ALL fifty states, Puerto Rico and the U.S. Virgin Islands. Questions about financial institution bonds? Call us at (800) 373-2804, email us at or click here for live chat.

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