What does a Fidelity Bond guarantee?

A Fidelity Bond is specifically designed to protect employers against losses that result from dishonest acts committed by employees. This can include theft, fraud, or embezzlement activities. Essentially, if an employee engages in dishonest behavior that leads to financial losses for the employer, the Fidelity Bond would compensate the business for those losses, ensuring that the employer is not left to bear the full brunt of the financial impact.

This type of bond is crucial for businesses that handle significant amounts of money or valuable assets, as it provides a layer of financial security against internal risks associated with employee actions. This is particularly important in industries where trust and integrity are foundational to business operations.

In contrast, options discussing payment for materials, completion of contractual obligations, and successful job completion pertain to different types of bonds or insurance products that deal with project completion guarantees and obligations to fulfill contracts, rather than addressing employee-related issues directly.