Meaning Of Fidelity Bond

A fidelity bond is a type of insurance that offers a business protection against losses caused by employees who commit fraud.

Meaning of fidelity bond. An insurance device in the form of a personal guaranty that protects against loss resulting from disreputable or disloyal employees or other individuals who possess positions of confidence. It usually insures a business for losses caused by the dishonest acts of its employees. A company s insurance protecting it against dishonest or illegal behaviour by employees.

While called bonds these obligations to protect an employer from employee dishonesty losses are really insurance policies. A special insurance policy that covers losses caused by dishonest employees.