Fidelity insurance, Fidelity insurance explained known as crime insurance or fidelity bonds, is a commercial insurance plan that protects businesses against financial losses caused by employee dishonesty. The plan is designed to provide a financial safety net in case employees commit crimes such as embezzlement, forgery or computer fraud. It also covers property damage and defence costs resulting from these incidents. Fidelity insurance can be obtained by businesses that are at greater risk of theft by their employees, such as banks, credit unions and other financial institutions.

While it is common for businesses to seek out fidelity insurance, it is important that they also consider other commercial insurance plans, such as general liability and workers’ compensation. These plans are essential in safeguarding business’s financial interests and promoting trust within the company.

What is the Difference between Fidelity Insurance and Bonds?

While a fidelity policy is like a specialized soldier, fighting against threats that come from inside the business (like dishonest acts by employees), a fidelity bond is more of a broader shield. A fidelity bond is required by certain regulatory standards and helps to protect the public from financial loss due to an employee’s dishonest actions.

A fidelity bond can also cover financial losses suffered by clients of your business, such as the client whose assets were stolen by an employee of your company. However, a fidelity bond will only reimburse the client for their losses if they have an insurance policy in place that covers such claims. Hence, it is critical that you assess the needs of your business, and determine if a fidelity bond is right for you.