The client came home and claimed a $500 bottle of vintage Cabernet was missing from the cellar. I didn’t touch it. I didn’t even go in the cellar. But it’s my word against theirs, and they are demanding I pay up or they’ll file a police report for theft. My Liability Insurance agent said, “We don’t cover theft by you.”
Key Takeaways
- Liability vs. Bond: General Liability covers damage you do accidentally (breaking a vase). A Surety Bond (Dishonesty Bond) covers theft you allegedly commit.
- The “Conviction” Clause: Most bonds only pay out if you are convicted of the theft in court. They don’t just pay because the client accused you.
- Defense Protection: The real value of the Bond is that the bonding company investigates. They act as a buffer between you and the crazy client.
- Third-Party Theft: If you left the door unlocked and a stranger stole the wine, that is a Liability claim (Negligence). If you are accused of stealing it, that is a Bond claim.
The “Why” (The Trap): The “Dishonest Acts” Exclusion
Every General Liability policy has this exclusion:
“We do not cover ‘property damage’ or ‘personal property’ loss arising out of dishonest, fraudulent, criminal, or malicious acts committed by you.”
If you don’t have a Dishonesty Bond, you have zero protection against false accusations of theft. You are on your own to hire a defense lawyer.
[IMAGE: Graphic illustration: “Insurance” Umbrella vs “Bond” Shield – explaining the difference]
The Investigation: I Called Them
I asked, “I’m accused of stealing. What happens?”
1. Travelers (Surety Bond Dept)
- The Process: They open an investigation. They ask for police reports. If the client refuses to file a police report (because they are lying), the claim usually dies there.
- The Verdict: The bond calls the client’s bluff.
2. PCI
- The Policy: They offer a “Dishonesty Bond” add-on for about $50/year.
- The Limit: usually $5,000 or $10,000.
3. Rover/Wag
- The Guarantee: They strictly exclude theft by the sitter. They will ban you from the platform immediately upon accusation, often before any proof is shown.
Comparison Table
| Feature | General Liability | Surety Bond |
| Accidental Damage | Covered | Not Covered |
| Accusation of Theft | Excluded | Covered |
| Requirements to Pay | Negligence proven | Conviction/Proof of Theft |
| Cost | ~$200/yr | ~ 50−50− 100/yr |
Step-by-Step Action Plan
- Buy a Bond: If you don’t have one, get one today. It’s cheap credibility.
- Demand a Police Report: If a client accuses you, say: “Please file a police report so my Bonding Company can investigate.” Liars hate filing police reports (it’s a crime).
- Do Not Pay: If you pay “just to make it go away,” you are admitting guilt.
- Body Cam/GPS: Show your timeline. “I was never in the cellar. Here is my GPS trace.”
FAQ
Does the bond cover my employees?
Yes, a “Business Services Bond” covers theft by your employees. This is vital. If your walker steals, the bond pays the client, then the bond company sues the walker.
What if I drink the wine but don’t steal the bottle?
That is “Theft of Content.” Still a bond issue. Also, unprofessional.
Is a background check the same as a bond?
No. A background check looks at the past. A bond pays for the future.