The term of a fidelity bond is continuous. The policy contains no expiration date and remains in force until formally cancelled. Premiums for the bond are figured for one year or for three years, and the employer is required to pay further premiums on the premium anniversary of the date of the bond.
Fidelity bonds attach at 12:01 a.m. If employee dishonesty coverage is purchased on an insurance policy, the term is normally limited to one year.
Cancellation
While many surety bonds may not be cancelled, fidelity bonds may be cancelled by either the surety or the employer. If the surety wishes to cancel a fidelity bond, it usually must give at least 15 days' notice to the insured.
Coverage on any employee who is discovered to have committed a fraud terminates immediately upon discovery of the loss as discussed earlier.