What is the primary purpose of a fidelity bond?

The primary purpose of a fidelity bond is to guarantee the honesty of employees. These bonds are specifically designed to protect an employer from losses caused by dishonest acts, such as theft or fraud, committed by their employees. When a fidelity bond is in place, it provides a financial safety net for businesses, ensuring that they can recover losses incurred due to the dishonest actions of an employee. This type of bond is essential for businesses that handle money or valuable assets, as it helps build trust and credibility with clients and stakeholders by showing that the business is taking steps to safeguard against employee dishonesty.

In contrast, the other options do not align with the primary function of a fidelity bond. For instance, protecting against natural disasters pertains to different types of insurance, such as property insurance or disaster bonds. Similarly, liability protection is typically covered under general liability insurance or professional liability insurance, not a fidelity bond. Lastly, while fidelity bonds do involve financial loss recovery, they do not cover property damage, which is the domain of property insurance. Thus, option B accurately captures the essence of what a fidelity bond is intended to achieve.