In bond policies, which option states that the limit applies separately to each employee involved in a loss?

The option that states the limit applies separately to each employee involved in a loss is indeed the Blanket Position Basis. This type of bond provides coverage for all employees in certain positions or roles, allowing for a separate limit of coverage for each employee who commits a dishonest act resulting in a loss.

This means if multiple employees are implicated in a fraudulent situation, each one can potentially trigger their own limit, thereby potentially increasing the overall amount that can be claimed when multiple losses occur. This is particularly beneficial for organizations, as it provides a broader safety net, allowing protection against multiple incidents involving various employees rather than capping the total coverage under a single limit that applies to all employees collectively.

In contrast, other bond types such as Name Schedule Basis and Commercial Blanket Basis may not provide this separate application of limits per employee. The Name Schedule Basis typically covers only specifically named individuals for fidelity losses, resulting in a more limited scope of coverage. The Aggregate Limit Basis, on the other hand, focuses on a total cap for all losses combined rather than providing separate limits per employee.

Thus, the Blanket Position Basis is key in allowing the coverage to extend individually per employee, supporting the overall risk management strategy of an organization.