Financial Institution Bonds

Blanket bond protection against employee dishonesty

Employee dishonesty is an ongoing threat for firms that manage investments for both individuals and corporations. Travelers has your solution. The Travelers Financial Institution Bond, Form14 includes an investment company blanket bond that is the premier choice for protecting brokers, advisors and funds from employee dishonesty. The bond provides a wide range of coverage for financial losses including larceny and embezzlement by employees, as well as certain other exposures.

Mandatory protection for investors and financial institutions

Securities commissions across Canada require the purchase of blanket bond coverage in order to be licensed to operate as a stockbroker, securities dealer, exempt market dealer and other financial advisor roles. This coverage protects the public from embezzlement of their funds while protecting financial institutions against employee theft and third-party fraud.

Travelers Canada’s Financial Institution Bond, Form14 provides broad coverage and options to meet clients’ unique risks, including:

  • Employee dishonesty against the firm and its clients
  • Coverage for destruction and theft of money and securities inside and outside the firm’s premises, as well as at its banking premises
  • Coverage for forged firm cheques, and acceptance of forged security documents and counterfeit currency
  • Computer fraud and funds-transfer fraud by third parties hacking into the firm's system
  • Worldwide territory
  • The option of a “per loss” form with a limit of liability that is fully reinstated after a loss, so the limit will not erode as it would under an aggregate form
  • Availability of audit expense coverage, which provides coverage for audits or examinations required for proof of loss from dishonesty, fraud, larceny or embezzlement committed by an employee
  • Coverage for additional Canadian offices established by the firm
  • Broad definition of “employee,” including 60 days coverage from the date of termination of employment for former employees
  • Mail coverage for securities sent to other locations

Limit of liability

  • $25,000,000 limit of liability

The kinds of crimes that would be covered by Travelers Canada’s Financial Institution Bond, Form14:

  • A broker transfers funds from a client's account into his/her own account and fabricates monthly statements to cover up the theft
  • A mutual fund agent has his clients make cheques payable to his own company and misappropriates the funds
  • A financial institution employee fraudulently transfers money into her personal account
  • Ponzi schemes

For more information about Financial Institution Bond, Form14 or any of our other products for financial institutions, please contact your insurance broker or locate a Travelers Canada broker near you.