When does a fidelity bond typically expire?

Fidelity bonds are designed to protect employers from losses due to fraudulent or dishonest acts committed by employees. They serve an important function in the risk management and insurance landscape. The correct answer indicates that fidelity bonds are typically continuous until cancelled.

This characteristic means that the bond remains in effect as long as the insurer does not cancel it, or the insured does not choose to cancel it themselves. This continuous nature allows for ongoing coverage without the need for renewal at specific intervals, such as annually. Such a structure is beneficial for businesses, as it provides long-term protection against potential employee misconduct without frequent interruptions or the need for continuous re-evaluation each year.

While the bond may become void or ineffective if certain conditions are met or if the insurer decides to cancel it, the default expectation is that it is continuous until specifically terminated. The other options reflect situations or terms that may apply to different types of insurance policies or agreements, but a fidelity bond's enduring nature is what distinguishes it and makes the continuous until cancelled provision correct.