Your group works hard all year raising funds, but are you prepared if the unthinkable occurs and something happens to those hard-earned funds? Because money is often kept in private homes overnight and can be in the custody of various officers, it is exposed to loss by embezzlement, robbery, and theft. Bonding Plus is designed to protect your group’s money against these types of mishaps. Without this coverage, recovery from a financial loss can take years, erasing all the hard work put in by leadership of the past, present, and future.
What is Insured?
Bonding Plus protects your group against exposure to financial losses due to employee dishonesty, forgery, alteration, theft, disappearance or destruction. This policy has three coverages, each with a separate, per loss limit. An employee is classified as any elected officer, committee chairperson (whether elected or appointed), or any member of the organization acting as a volunteer. A brief description of the coverage follows:
Provides protection for the loss of money, securities and other property resulting directly from one or more fraudulent or dishonest acts committed by an employee (as defined above) acting alone or in collusion with others.
Provides protection for loss resulting from forgery or alteration of outgoing checks, drafts, promissory notes and similar instruments drawn against the Insured’s accounts.
Provides protection for loss resulting from theft, disappearance or destruction. This coverage is divided into two parts, each with its own separate per loss limit.
Part A Loss Inside The Premises
Provides protection for the loss of money and securities by the actual destruction, disappearance or wrongful abstraction thereof, within the premises. The definition of premises has been enhanced to include the interior of that portion of any building which is used by the insured while conducting business.
Part B Loss Outside The Premises
Provides protection for the loss of money and securities by the actual destruction, disappearance or wrongful abstraction thereof, outside the premises while being conveyed by a messenger, or while within the living quarters in the home of any messenger. The definition of messenger has been enhanced to include the Insured or any employee (as previously defined) who is duly authorized by the Insured to have the care and custody of the insured property outside the premises.
Bonding Plus is available to PTAs, PTOs, Booster Clubs, and various nonprofit chapters or clubs.
The territory of this policy is the USA, its territories and possessions, Puerto Rico and Canada.
The policy period is one calendar year. You may choose the effective date of your policy as it will expire the same day the following year. There is also a discovery period which extends beyond the expiration date of the policy. This discovery period is one year from the end of the policy period with the provision that the loss, or the occurrence or act that gave rise to the loss, occurred during the policy period.
- Keep checks in a safe and secure area
- Never pre-sign blank checks
- Have 2 signatures on all checks
- Look for missing or out-of-sequence checks
- Do not make checks out to cash
- Track all bills paid by keeping copies of invoices and matching receipts
- Review all bank statements and check records each month; review should be by someone who is not the treasurer
- Have an annual audit of records completed and an audit completed every time officers who handle money take office, particularly the treasurer
- Verify wire transfers
- Verify cash logs and always provide receipts along with bank deposit slips
- Make bank deposits the same day or next business day
- Have at least 2 people present when counting money and utilize a “Funds Received” form
- Maintain timely and complete financial information at all times
- Review the accounts payable, vendor, and donation lists to check for suspicious names or businesses
- Copies of tax forms filed should be included in the Treasurer’s, Secretary’s and President’s records
- Purchase Bonding Plus Insurance coverage for your group
Don’t be afraid to ask questions or assume you are the only one who does not understand a transaction. As a member or an officer, you have a responsibility to keep the organization healthy and your funds safe!
While you will find our Bonding coverage to be one of the broadest in the country, there are some specific exclusions usual to this form of crime insurance. The following is only a summary and is not all inclusive, nor does it alter or waive any of the actual policy language.
There is NO coverage, or coverage is excluded for:
- Losses, the proof of which is dependent upon an inventory or profit and loss computation.
- Losses due to accounting or arithmetical errors or omissions.
- Moneys in coin-operated vending machines or amusement devices.
- Losses resulting from the use or sale of supermarket or other type of scrip.
- Cancellation Of Coverage For A Specific Employee(s). The employee dishonesty coverage contains a condition that immediately cancels any future coverage for any employee (as previously defined) upon discovery by the Insured, or an officer or director, of any dishonest act committed by that employee, either before or after becoming an employee of the insured organization. This condition is common to this type of coverage. Coverage is also excluded for any employee for whom similar prior insurance has been canceled.