Surety and Fidelity Bonds For Law Firms

A surety bond guarantees that a person or organization will fulfill a legal, financial, or professional obligation. If that obligation is not met, the surety may compensate the party protected by the bond.

A fidelity bond helps protect a business from certain losses caused by employee dishonesty, such as theft, fraud, or embezzlement.

In simple terms: a surety bond generally protects someone else from the bonded party’s failure to meet an obligation. A fidelity bond generally helps protect the business from dishonest acts by trusted employees.

Insurance generally helps protect the policyholder from covered losses, subject to the policy’s terms, conditions, and exclusions.

A bond often protects a third party, such as a court, client, government agency, or business partner, by guaranteeing that an obligation will be fulfilled.

If a surety pays a valid claim, the bonded party may be required to reimburse the surety. This is an important difference between many surety bonds and traditional insurance policies. 

Law firms may handle client funds, trust accounts, financial records, and other sensitive assets. A fidelity bond can help protect the firm from certain losses caused by employee theft, fraud, or other dishonest acts.

Even a small firm may want to consider this protection when employees have access to money, banking information, trust accounts, or other financial responsibilities.

A court bond is a type of surety bond that may be required in certain legal proceedings. It provides financial assurance that a person or organization will fulfill a court-ordered duty or obligation.

Common examples may include:

• Appeal bonds

• Estate or probate bonds

• Guardian or conservator bonds

• Fiduciary bonds

• Injunction bonds

The required bond type and amount depend on the court, jurisdiction, and circumstances of the case.

A notary bond is a surety bond that may be required before an individual can serve as a notary public.

The bond is intended to protect the public from certain financial harm caused by a notary’s failure to comply with applicable laws and duties. It does not typically protect the notary personally.

Requirements vary by state, so attorneys should confirm the rules that apply where they are commissioned. 

Before applying, gather the information needed to identify the correct bond:

• Why the bond is needed

• Who is requiring it

• The required bond amount

• The duty, obligation, or exposure the bond addresses

• Any court, client, contractual, or regulatory requirements

• The named parties and required bond form

• The deadline or effective date

• Any underwriting or supporting documentation requirements

Providing complete information at the start can help avoid delays and ensure the firm applies for the appropriate bond.