Fidelity Bond Definition

A Fidelity Bond is a type of insurance that protects employers from financial losses caused by dishonest acts of their employees. Also known as employee dishonesty insurance, these bonds typically cover losses resulting from theft, fraud, embezzlement, or other dishonest acts committed by employees. Fidelity bonds are often required for businesses handling large sums of money or managing sensitive financial transactions.

For example, a fidelity bond may protect a company if an employee embezzles funds or steals property, ensuring the employer can recover financial losses caused by such acts. These bonds help businesses maintain financial security and protect against potential risks associated with employee misconduct. They provide reassurance to employers and stakeholders by demonstrating a commitment to safeguarding assets and maintaining integrity in business operations.