What type of coverage does a fidelity bond provide to a business?

A fidelity bond provides coverage specifically against employee dishonesty, which is crucial for businesses looking to protect themselves from potential financial losses caused by their employees' fraudulent activities. This type of bond is designed to reimburse the employer for theft or other dishonest acts committed by employees, such as embezzlement or fraud.

Unlike liability coverage, which protects against third-party claims, or workers' compensation, which provides benefits to employees injured on the job, a fidelity bond focuses solely on the actions of employees that can result in monetary loss to the business. General property coverage addresses damages to physical property but does not encompass the risks related to employee misconduct, which is why the fidelity bond is essential for businesses that want to mitigate internal risks and safeguard their finances. This makes it a vital tool for risk management in the realm of employee-related liabilities.