This coverage protects the church against thefts of money by employees. This type of loss normally occurs in small amounts over a period of time, but it can accumulate to a substantial amount before discovery. A rule of thumb for determining your coverage needs for fidelity should be 10% of the average monies on deposit in a month, times 12 months. This is considered the average amount that can disappear, and the length of time over which it can disappear before discovery. A limit of $10,000 of fidelity coverage will usually fulfill this need for small & medium sized churches. Larger churches may need considerably more coverage. The bond form is written in two different formats: Scheduled position and Blanket. A scheduled position bond covers only the designated positions, such as treasurer and assistant treasurer. If a secretary were to steal funds, then coverage would not extend. The most desirable method of writing this coverage is on a blanket format. This provides protection against any employee or officer that might take funds from the church. In order to help the church protect itself from these losses, a counter signature requirement should be in force so that no one person can write a check.
(Please note that in order for a claim to be processed, the guilty party must be turned into law enforcement officials as theft is considered a crime.)
Loss of Monies
This includes theft and robbery of monies or securities from the church premises or off-premises while being taken for deposit. The amount you need to carry is determined by the highest amount of negotiable cash that may be available for theft at any given time. Keep in mind that checks can be replaced if you have a record of who wrote them.
Forgery protects the church against someone forging checks. It is normally written in the same incremental limit as fidelity.