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Chapter 4.5. Division of Workers' Compensation
Subchapter 1. Administrative Director--Administrative Rules
Article 4. Certification Standards for Health Care Organizations
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§9771.74 Fidelity Bond.

(a) Each organization shall at all times maintain a fidelity bond covering each officer, director, trustee, partner and employee of the organization, whether or not they are compensated. The fidelity bond may be either a primary commercial blanket bond or a blanket position bond written by an insurer licensed by the California Insurance Commissioner, and it shall provide for 30 days' notice to the Administrative Director prior to cancellation. The fidelity bond shall provide at least the minimum coverage for the organization determined by the following schedule:

Annual Minimum

Gross Income Coverage

Up to $ 100,000 $ 10,000

100,000 to 300,000 20,000

300,000 to 500,000 30,000

500,000 to 750,000 50,000

750,000 to 1,000,000 75,000

1,000,000 to 2,000,000 100,000

2,000,000 to 4,000,000 200,000

4,000,000 to 6,000,000 400,000

6,000,000 to 10,000,000 600,000

10,000,000 to 20,000,000 1,000,000

20,000,000 and over 2,000,000

(b) The fidelity bond required pursuant to subsection (a) may contain a provision for a deductible amount from any loss which, except for such deductible provision, would be recoverable from the insurer. A deductible provision shall not be in excess of 10 percent of the required minimum bond coverage, but in no event shall the deductible amount be in excess of $100,000.


Authority cited: Stats. 1997, Ch. 346, Section 5. Reference: Sections 4600.3, 4500.5 and 4600.6, Labor Code.


1. New section filed 4-15-98; operative 4-15-98. Submitted to OAL for printing only pursuant to Stats. 1997, Ch. 346, Section 5 (Register 98, No. 16).

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