Title 29

SECTION 2580.412-10

2580.412-10 Individual or schedule or blanket form of bonds.

§ 2580.412-10 Individual or schedule or blanket form of bonds.

Section 13 provides that “any bond shall be in a form or of a type approved by the Secretary, including individual bonds or schedule or blanket forms of bonds which cover a group or class”. Any form of bond which may be described as individual, schedule or blanket in form or any combination of such forms of bonds shall be acceptable to meet the requirements of section 13, provided that in each case, the form of the bond, in its particular clauses and application, is not inconsistent with meeting the substantive requirements of the statute for the persons and plan involved and with meeting the specific requirements of the regulations in this part. Basic types of bonds in general usage are:

(a) Individual bond. Covers a named individual in a stated penalty.

(b) Name schedule bond. Covers a number of named individuals in the respective amounts set opposite their names.

(c) Position schedule bond. Covers each of the occupants of positions listed in the schedule in the respective amounts set opposite such positions.

(d) Blanket bonds. Cover all the insured's officers and employees with no schedule or list of those covered being necessary and with all new officers and employees bonded automatically, in a blanket penalty which takes two forms - an aggregate penalty bond and a multiple penalty bond which are described below:

(1) The aggregate penalty blanket bond such as the Commercial Blanket Bond; the amount of the bond is available for dishonesty losses caused by persons covered thereunder or losses in which such person is concerned or implicated. Payment of loss on account of any such person does not reduce the amount of coverage available for losses other than those caused by such person or in which he was concerned or implicated.

(2) The multiple penalty bond such as the Blanket Position Bond giving separate coverage on each person for a uniform amount - the net effect being the same as though a separate bond were issued on each person covered thereunder and all of such bonds being for a uniform amount.

Note:

For the purpose of section 13, blanket bonds which are either aggregate penalty or multiple penalty in form shall be permissible if they otherwise meet the requirements of the Act and the regulations in this part.

Bonding, to the extent required, of persons indirectly employed, or otherwise delegated, to perform functions for the plan which are normally performed by “administrators, officers, or employees” as described in § 2580.412-3(d) may be accomplished either by including them under individual or schedule bonds or other forms of bonds meeting the requirements of the Act, or naming them in what is known under general trade usage as an “Agents Rider” attached to a Blanket Bond.

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