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Commercial Surety/Fidelity Underwriting Frequently Asked Questions
What is the difference between your Employee Dishonesty A coverage and your Employee Dishonesty B coverage? Both our Employee Dishonesty A coverage and our Employee Dishonesty B coverage are blanket position coverage and we consider both up to $100,000; however, our Employee Dishonesty A coverage was designed for professional business entities and also for non-profit or social organizations where coverage is desired on the officers of the organization. Our Employee Dishonesty B coverage was designed for businesses with more loss exposure or for businesses that go into their clients’ homes or businesses as it includes subscriber liability coverage. The Employee Dishonesty B coverage also includes a clause where a conviction is required before coverage would apply. Does either your Employee Dishonesty A coverage or your Employee Dishonesty B coverage have a deductible? No, there is no deductible for either coverage. Does your Janitorial Services coverage have a deductible? Yes, our Janitorial Services coverage has a $100 deductible per claim. Does your Notary Errors and Omissions blanket or individual policy have a deductible? No, there is no deductible for either policy. Does your Tax Preparers Professional Liability policy have a deductible? Yes, our Tax Preparers Professional Liability policy has a $250 per claim/$500 aggregate deductible . Why do you ask for the indemnity of the spouse of an applicant when the spouse has nothing to do with the business that requires the bond? In the event of a claim, we generally look to both the owner’s business assets and the owner’s personal assets for indemnification or reimbursement for the claim and expenses incurred. An owner typically owns personal assets jointly with their spouse or may transfer personal assets to their spouse; therefore, when requiring personal indemnity from the owner, we also require the indemnity of the owner’s spouse. What is the Form 30 Application used for? The Form 30 Application is used when an applicant is requesting fidelity commercial blanket or fidelity blanket position coverage, generally for limits of $100,000 or less. Some applicants may not qualify for this coverage depending on the size and type of risk involved. What is the Form 40 Application used for? The Form 40 Application is used when an applicant is a public entity and is requesting either commercial blanket or blanket position honesty and faithful performance coverage for its employees and/or officials. Note: Some officials, such as treasurers and tax collectors, are required to post individual qualifying public official bonds and cannot be covered on a blanket bond. I have received a renewal bond/policy/continuation certificate and the bond is no longer needed. What do I need to do to cancel or nonrenew the bond? Simply write ‘Cancel’ on the original bond/policy/continuation certificate and return it to CNA Surety for cancellation. I have a probate bond in force. How do I cancel this bond? Generally, probate bonds cannot be canceled by the surety or the principal. Instead, the court must provide a release or discharge of liability to the principal and the surety on a probate bond. We suggest you consult with the principal’s attorney for advice on how to obtain a release or discharge from the court for the bond. I have a fidelity bond in force. How do I cancel this bond? Generally, unless the fidelity bond has a third party additional insured, the insured can simply send in a written request to cancel their bond. This written notice should include their signature and the specific date which the bond should be canceled. Do you require CPA prepared financial statements to consider bond requests? For small commercial surety bond risks, CPA prepared financial statements, while preferred, are not required. I am an agent and I have a client that needs a bond, but I am not sure what type of bond they need. What information should I obtain from my client to determine the type of bond needed? In most cases, your client is being asked to post a bond by a third party (obligee). Obtain copies of the correspondence the obligee sent to your client requesting the bond, including copies of any bond form they provided, and submit that information to our Company so we can determine the type of you’re your client needs for you. If this information is not available, try and obtain the answers to the following three questions and contact our Company for further advice:
I submitted a bond request for a business and your Company is asking that I submit the personal financial statements of the owners of the business along with the business financial statements. If the bond request is for the business, why do I need to provide the personal financial statements of the owners? With commercial and contract surety bonds, we generally ask that the owners be willing to back up their own company in the event of a claim if their company does not qualify on its own for the risk. We also will look to the business first in the event of a claim or potential claim since the business is our principal; however, if the business cannot resolve the claim or reimburse us for claims and expenses that have been incurred, we then look to the owners to resolve the claim or reimburse us for the claim and expenses, so we need the owners personal financial statements to ensure they are financially viable to do so. I have a bond for which I have not received payment from the principal. What can I do to remove the charge from my account? If you still have the original bond or renewal bond/continuation certificate in your possession, simply write ‘Cancel’ on the bond/continuation certificate and return it to us for cancellation. If you do not have the original bond or renewal bond/continuation certificate, but the bond has a cancellation clause, submit a written request to us to cancel the bond for non-payment of premium. If you do not have the original bond or renewal bond/continuation certificate and the bond is one that does not have a cancellation clause, provide us with your written request to take this bond over for collection and provide us with the most current address you have the principal and their attorney, if applicable, and we will begin collection efforts on the bond. Please note that you forfeit any commission for any premiums collected by our Company directly from the principal. If a bond/policy has been canceled, can it be reinstated? Depending on the reason for cancellation/nonrenewal of the bond/policy in the first place, if the effective date of cancellation/nonrenewal of the bond/policy has not yet passed, you can submit a written request to our Company to reinstate the bond. We will then notify you whether your request has been accepted. If a bond/policy has been canceled for non-payment of premium, we will not consider reinstatement until we first have received payment. Even if the effective date of cancellation of the bond/policy has passed, you can still submit a written request for reinstatement to Underwriting for consideration; however, in these cases, a new bond with a current effective date may be considered instead. I have a probate bond in force and I need to lower the bond penalty. What does your Company require to do this? Neither the surety nor the principal can reduce the penalty on a probate bond. Only the probate court can reduce the penalty of a bond; therefore, we need a copy of an order from the court reducing the bond penalty. How do I make a change to a bond? If you have access to our Internet bONdLINE program, you can make changes using the Change Rider in that program. For changes that involve a change to the name or penalty of a bond, please submit a written request by mail, fax, or email to the Company for review.
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