Impact on a Credit Union’s Financial Position

There are several ways that fidelity bond coverage can impact a credit union’s financial position:

• The cost of obtaining bond coverage (the premium) is an expense that reduces earnings and, potentially, net worth
• If the bond coverage is inadequate, any expenses that are not covered by the bond (for example, legal or audit expenses) will reduce earnings and may reduce net worth
• Any claims denied by the bond company will result in expenses or losses that reduce earnings and, potentially, net worth

Last Updated on October 09, 2020