Blanket Bond Law and Legal Definition

A blanket bond refers to a bond covering several persons, projects, articles or properties that require performance bonds. It is an alternate term for fidelity bond. Fidelity bond is one that indemnifies an employer or business from loss due to embezzlement, larceny, or gross negligence by an employee or other person holding a position of trust. Banker’s blanket bond refers to a fidelity bond purchased from an insurance broker that protects a bank against losses from a variety of criminal acts like employee fraud, robbery, burglary, and forgery. Some states require blanket bond coverage as a condition for operating a bank. It also refers to a broad insurance coverage against losses due to theft or employee dishonesty, carried by brokerages and other financial institutions.