Fidelity Bonds
Chapters in this video
- 0:00 What fidelity bonds cover, and the Priya vs. Riley framework
- 1:04 Employee dishonesty, forgery, and what the bond excludes
- 2:28 Calculating minimum bond coverage: the greater of 120% or $100,000
- 4:46 Per-loss coverage with no aggregate limit
- 5:31 Deductible caps and the 10% net worth trigger
- 6:50 The annual recalibration look-back rule
- 7:52 Rapid-fire exam recap
What this video covers
- What a fidelity bond actually covers: employee dishonesty, misplaced securities certificates, forgery, and computer-system fraud, and why market losses and suitability complaints are excluded
- How to calculate minimum bond coverage for firms with a net capital requirement (NCR) below $250,000, using the greater of 120% of NCR or the $100,000 floor
- Why the bond is always sized to the net capital requirement, not the firm's actual net capital, and how exam questions exploit this trap
- The per-loss coverage requirement with no aggregate limit that applies to every member's bond regardless of net capital tier, and why standard commercial policies fail this test
- The 25% hard cap on deductibles, and the 10% threshold where excess deductible amounts must be deducted from net worth in the capital computation
- The annual recalibration rule's 12-month look-back period, and why the peak net capital requirement during that window controls renewal sizing
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete Series 24 course also includes adaptive practice questions and spaced-repetition flashcards, free through the end of 2026.