A fidelity bond protects you against theft or dishonesty by people you hire

A fidelity bond is insurance that reimburses you if someone you've hired — a contractor, handyman, house cleaner, or employee — steals from you or commits fraud. It covers losses from theft of your property, money taken directly from you, or dishonest acts like forging checks or deliberately damaging your home to inflate repair bills. The bond pays you the covered amount if the loss happens and you report it within the time limit set by the policy.

Fidelity bonds are different from liability insurance, which covers injuries or damage the worker causes by accident. A fidelity bond covers intentional dishonesty or theft. If a contractor accidentally breaks your window, liability covers it. If the contractor steals your laptop or your spouse's jewelry, fidelity covers it.

Most homeowners don't carry fidelity bonds themselves. Instead, they rely on the contractor or service provider to carry one. A reputable contractor often carries a fidelity bond as part of their business insurance, which protects both them and their customers. When you hire someone, asking whether they carry a fidelity bond is one way to check whether they take their business seriously.

Key Takeaways

  • A fidelity bond reimburses you if someone you hire steals from you or commits fraud, but does not cover accidental damage.
  • Most contractors and service providers carry fidelity bonds as part of their business insurance, not something you buy separately.
  • Asking a contractor whether they carry a fidelity bond is a practical way to gauge their professionalism and reduce your risk.
  • Fidelity bonds have coverage limits and time limits for reporting losses, so you need to act quickly if you discover theft or fraud.

How a fidelity bond claim works

If you discover that someone you hired has stolen from you or committed fraud, you report the loss to the bonding company — not to the contractor. You'll need to provide proof of the loss: a police report, receipts showing what was taken, bank statements showing unauthorized charges, or documentation of the fraudulent act. The bonding company investigates and, if the claim is valid, pays you up to the bond's coverage limit.

The catch is timing. Most fidelity bonds require you to report the loss within a set window — often 30 to 90 days from when you discovered it. If you wait too long, the claim may be denied. That's why it matters to stay alert during and after any work in your home, and to check your accounts and property soon after the job is done.

The contractor or service provider pays the premium for their fidelity bond, not you. But if they make a claim, their premium usually goes up, just like a car insurance claim. That's one reason reputable contractors are careful about who they hire and how they supervise them.

When fidelity bonds matter most for homeowners

Fidelity bonds are most relevant when you hire someone to work inside your home unsupervised or to handle money or valuables. A house cleaner, nanny, or home health aide who has access to your bedroom and bathroom is a common reason to ask about fidelity coverage. A contractor managing a large renovation budget, or a handyman who regularly enters your home, is another.

If you're hiring someone through an established company — a national cleaning service, a licensed plumbing firm, a bonded general contractor — they almost certainly carry fidelity insurance as part of their business license or industry standard. If you're hiring an independent worker or someone referred by a friend, it's worth asking directly whether they carry a bond and asking to see proof.

For smaller jobs or one-time work, the risk is lower, but it's still reasonable to ask. A straightforward answer — "Yes, my business is bonded" or "No, but I've been doing this for 15 years with no issues" — tells you something about how they operate.

The difference between fidelity bonds and other types of contractor insurance

Contractors typically carry three types of insurance: general liability, workers' compensation, and fidelity bonding. General liability covers damage the contractor causes to your home or injury to you during the work — a dropped tool, a spilled paint can, a tripped guest. Workers' compensation covers medical bills if the contractor's employee is injured on your property. Fidelity covers theft or fraud by the contractor or their employees.

A contractor might have excellent liability coverage but no fidelity bond, or vice versa. When you hire someone, it's worth asking about all three, especially if they'll be in your home regularly or handling money. A contractor who carries all three is taking their business seriously and protecting both themselves and you.

Some homeowners also carry their own fidelity coverage as a rider on their homeowners insurance, though this is less common. If you employ a nanny, house cleaner, or other household worker regularly, your insurance agent can tell you whether adding fidelity coverage makes sense for your situation.

What fidelity bonds do not cover

A fidelity bond does not cover poor workmanship, missed deadlines, or incomplete jobs. If a contractor does sloppy work or abandons a project halfway through, that's a contract dispute, not theft or fraud. You'd need to pursue it through small claims court or a dispute resolution process, not through the fidelity bond.

Fidelity bonds also don't cover accidents or negligence. If a contractor accidentally breaks your window, spills paint on your carpet, or injures themselves, that's covered by liability insurance, not fidelity. The distinction matters because it tells you what kind of protection you actually have.

Coverage limits vary widely. A small fidelity bond might cover $5,000; a larger one might cover $50,000 or more. If you're hiring someone to manage a large renovation budget or you have high-value items in your home, ask what the coverage limit is. If it's too low for your situation, you may want to explore other protections or hire through a larger, more established firm.

How to ask about fidelity bonds when hiring

When you're getting estimates or interviewing contractors, add this to your list of questions: "Are you bonded and insured?" A simple yes or no tells you whether they carry fidelity coverage. If they say yes, ask to see a copy of the bond or a certificate of insurance. This is standard practice and any legitimate contractor will have it available.

If they say no, ask why. Some independent workers or very small operations don't carry bonds because the cost isn't worth it for their business model. That doesn't automatically disqualify them, but it does mean you're taking on more risk. You might ask for references, check online reviews, or ask whether they'd be willing to work under closer supervision or with a payment schedule that ties payment to completion rather than upfront.

For ongoing workers like house cleaners or nannies, fidelity coverage is more important because they have regular access to your home. For one-time jobs or work you'll supervise closely, the risk is lower. Use your judgment based on the job, the amount of money involved, and how much access the worker has to your home and valuables.

Frequently Asked Questions

Do I need to buy a fidelity bond myself as a homeowner?

No. Contractors and service providers carry fidelity bonds as part of their business insurance. You can ask whether they have one when you hire them, but you don't purchase it. Some homeowners add fidelity coverage to their homeowners insurance if they employ household workers regularly, but this is optional and depends on your situation.

What should I do if I think someone I hired stole from me?

Report it to the bonding company immediately — don't wait. You'll need proof: a police report, receipts, bank statements, or photos. Most bonds have a 30- to 90-day reporting window, so acting quickly is critical. Get the contractor's insurance information from your contract or ask them directly for the bonding company's contact details.

Is a fidelity bond the same as a performance bond?

No. A performance bond guarantees the contractor will finish the job as promised; if they don't, the bond covers your losses. A fidelity bond covers theft or dishonesty. A contractor might carry one, both, or neither. Ask specifically what type of bond they carry if you want to know what's protected.

Can a contractor with a fidelity bond still steal from me?

Yes. The bond doesn't prevent theft; it reimburses you if theft happens. The bond is insurance, not a may provide of honesty. That's why it's still worth checking references, reading reviews, and supervising work when possible — the bond is a safety net, not a substitute for due diligence.

Does asking about a fidelity bond offend contractors?

No. Professional contractors expect this question and have the answer ready. It's a normal part of hiring. If a contractor gets defensive or evasive about insurance, that's a red flag worth paying attention to.