What does "fidelity bonding" protect against?

Fidelity bonding is a type of insurance that specifically protects businesses against the risk of employee dishonesty or fraud. This coverage is designed to safeguard the employer from financial losses that may occur due to dishonest acts committed by employees, such as theft of money, securities, or property.

Having a fidelity bond is crucial for businesses as it not only mitigates the financial risks associated with employee malfeasance but also helps build trust with clients and stakeholders, who may be more confident knowing that there are protections in place against potential dishonest behavior. This makes fidelity bonding an important aspect of risk management for employers in various industries.

In contrast, the other options relate to different types of insurance needs, such as liability coverage for third-party injuries, personal property coverage for theft, and property insurance for damages to company assets, but they do not pertain to the protection specifically provided by fidelity bonding.