Labor Organization Bond

Guaranteed protection against financial loss.

A Bond is a guarantee to protect Unions from financial loss arising from fraudulent dishonest acts in the handling of funds or other property by Officers and/or Employees. Local Union bonding is required by (1) the Constitution, and (2) the Labor Management Reporting and Disclosure Act (LMRDA), commonly known as the Landrum-Griffin Act. Violations of the LMRDA bonding requirement may be punishable by fines up to $10,000 and imprisonment up to one year, or both.

Under the Labor Management Reporting and Disclosure Act (LMRDA), your local union is required to carry a limit of liability no less than ten (10) percent of “funds handled”. The term “funds handled” has been interpreted to mean the total of liquid assets on hand at the end of your prior calendar (or fiscal) year, AND the income received during the year. When you add these two figures together, ten percent (10%) of the total is the minimum bonding requirement

The Labor Organization Bond covers the loss of money, securities and other property which the insured shall sustain, to an amount not exceeding in the aggregate the amount stated in the bond, resulting directly from one or more fraudulent or dishonest acts committed by an employee acting alone or in collusion with others. Please review your current limit of liability to be sure that your coverage is appropriate.