Implementing Commercial Crime Policy Bond Coverage

Elizabeth Powell

November 19, 2019

Share this article

How it is Different From a Labor Bond, How it Protects the Assets of Your Local

(This article first appeared in the November/December 2019 issue of the American Postal Worker magazine) 

Local union bonding is required by (1) the Constitution, and (2) the Labor Management Reporting and Disclosure Act (LMRDA). Under the LMRDA, local unions are required to have a bond limit liability of no less than ten percent (10%) of the local’s liquid assets. It is strongly advised that locals obtain bond coverage for 100 percent of their liquid assets for any officer responsible for handling union funds. This has been interpreted to mean the total of liquid assets on hand at the end of your prior calendar (or fiscal) year, and the gross income received during the year.

The Labor Organization Bond was specifically written for labor unions to satisfy the requirements of the LMRDA whereas Crime Policy can be used for several types of entities. A bond is a guarantee to protect unions from financial loss arising from fraudulent or dishonest acts in the handling of funds or other property by officers and/ or employees. Violations of the LMRDA bonding requirement may be punishable by fines up to $10,000 and imprisonment for up to one year. National APWU provides $5,000 of bond coverage for each local.

As cyber technology becomes more and more sophisticated at an alarming rate, it is important to be proactive in protecting local assets from these types of losses. Implementing Commercial Crime Policy coverage would provide coverage for forgery or alteration, computer theft, and funds transfer fraud for the International and the Locals/Affiliates listed on the Labor Organization Bond.

Forgery or Alteration: Coverage is provided for losses resulting directly from “forgery” or alteration (coverage not applicable to employees of the named insured) of checks, drafts, promissory notes, or similar written promises, orders or directions to pay a sum certain in “money” that are: (1) Made or drawn by or drawn upon you; or (2) Made or drawn by one acting as your agent; or that are purported to have been so made or drawn.

Computer Theft: Covers loss of or damage to “money,” “securities” and “other property” resulting directly from the use of any computer to fraudulently cause a transfer of that property from inside the “premises” or “banking premises” to a person (other than a “messenger”) outside those “premises;” or “banking premises:” (a) To a person (other than a “messenger”) outside those “premises;” or (b) To a place outside those “premises.”

Funds Transfer Fraud: Will pay for loss of “funds” resulting directly from a “fraudulent instruction” directing a financial institution to transfer, pay or deliver “funds” from your “transfer account.”

Local affiliates will now have Labor Organization Bond and a Crime Policy coverage if these unforeseen circumstances arise to protect local assets. Please contact the Secretary-Treasurer’s Department if you need assistance with determining the amount of bond coverage your local will need or if your local needs to decrease the amount of current coverage.

The Secretary-Treasurer’s Department is moving forward with the important task of preparing for the 2020 National Convention. Information will be forthcoming as preparations are finalized and will be posted in the APWU magazine and on

Webinars Available

The Secretary-Treasurer’s Department provides training webinars in the areas of Fiduciary Responsibilities of Union Officers, Trustee Training, Local Elections, Recording Secretary Training, and various other topics for local and state officers.

Contact the Secretary-Treasurer’s Department today to learn more details and sign up, 202-842-4215!

Stay in touch with your union

Subscribe to receive important information from your union.