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Definition of 'Blanket Honesty Bond'
A kind of fidelity bond that covers an employer for all of the losses that are incurred through the dishonest acts of its employees. No matter how many employees are involved, the maximum amount of the coverage will be applied to any one loss. The employer is indemnified even if the the guilty employee(s) cannot be identified. Also known as commercial blanket bond.
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Investopedia explains 'Blanket Honesty Bond'
Even though a blanket honesty bond and other kinds of fidelity bonds are called "bonds," as you can see they are really a form of insurance. The dishonest acts of employees covered include theft, embezzlement, forgery, disappearance and destruction and other types of wrongdoing. The process of buying a fidelity bond helps employers weed out staff who are likely to commit crimes, because commercially purchased fidelity bonds will not cover employees with histories of dishonest acts.
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