Honesty Bond

AAA

DEFINITION of 'Honesty Bond'

A bond posted by an organization or professional insuring the honesty and integrity of the bond issuer and/or its employees. An honesty bond insures the policy holder against theft, fraud and other dishonest acts by employees.

Also known as a "fidelity bond" or a "commercial blanket bond".

INVESTOPEDIA EXPLAINS 'Honesty Bond'

Most financial professionals are "bonded", which means there is protection against dishonest or illegal acts by employees. This bond, in turn, can be used to cover losses to the business or to consumers caused by dishonesty on the part of those employees. When used properly, honesty bonds can build trust with customers and invoke fiduciary responsibility among all employees.

RELATED TERMS
  1. Banker's Blanket Bond

    A fidelity bond purchased from an insurance broker that protects ...
  2. Blanket Bond

    Insurance coverage carried by brokerages, investment bankers, ...
  3. Ponzi Scheme

    A fraudulent investing scam promising high rates of return with ...
  4. Wire Fraud

    A situation where a person concocts a scheme to defraud or obtain ...
  5. Embezzlement

    A form of white-collar crime where a person misappropriates the ...
  6. Errors And Omissions Insurance ...

    A professional liability insurance that protects companies and ...
Related Articles
  1. Online Investment Scams Tutorial
    Economics

    Online Investment Scams Tutorial

  2. Biggest Stock Scams
    Personal Finance

    Biggest Stock Scams

  3. Are My Investments Insured Against Loss?
    Home & Auto

    Are My Investments Insured Against Loss?

  4. 4 Dishonest Broker Tactics And How To ...
    Personal Finance

    4 Dishonest Broker Tactics And How To ...

Hot Definitions
  1. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  2. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  3. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  4. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
Trading Center