Texas General Lines — Property and CasualtySurety and BondsHard
A small independent moving company applies for a bond to guarantee that its employees will handle customers' property honestly and without theft. The surety company decides to issue a 'Name Schedule Bond' rather than a 'Blanket Bond'. What is the primary implication of this choice for the moving company?
- AOnly specific, named employees are covered for acts of dishonesty.
- BAll employees, regardless of position, are covered up to a single limit.
- CThe bond's penal sum is significantly higher than a blanket bond.
- DCoverage limits vary based on the employee's position.
Show answer & explanationAnswer & explanation
Correct answer: A. Only specific, named employees are covered for acts of dishonesty.
A Name Schedule Bond covers only those specific employees whose names are listed on the bond. In contrast, a Blanket Bond would cover all employees or all employees within a specified class without individually naming them.
Why the other options are wrong
- B. This describes a Blanket Bond, which covers all employees or a class of employees.
- C. The penal sum is independent of whether it's a name schedule or blanket bond; it's the maximum payout.
- D. This describes a Position Schedule Bond, where coverage is tied to the job role, not individual names.
Name Schedule Bond
A type of fidelity bond that covers specific individuals whose names are listed on the bond, for acts of dishonesty.
- Coverage is tied to named employees only.
- Requires updating if named employees leave or new ones are hired.
- Contrast with Blanket Bonds (all employees) and Position Schedule Bonds (specific positions).
Memory trick: Fidelity: Name, Position, or Blanket?