What is a Fidelity Bond Insurance

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What is a Fidelity Bond?

Fidelity bonds are really an insurance policy with the purpose of protecting against theft and other types of dishonest acts of employees and or contractors.

Fidelity bond insurance can protect against the loss of money, securities, personal business property, and other property. Fidelity bonds come in two primary flavors, First-Party and Third-Party fidelity bonds.

First-Party bonds protect a business and/or investors from its own employees and officers against wrongful (and usually illegal) acts that include theft, fraud, forgery, embezzlement.

Third-Party Fidelity Bonds protect against the same types of acts as a First-Party Fidelity Bond, but for acts committed by contractors and subcontractors. For example, if a general contractor building a series of apartment buildings wants to protect against theft by workers from subcontractors, a Third-Party Fidelity Bond would be the vehicle to achieve the goal.

Offices often require cleaning services to have Fidelity bonds in place to ensure the night cleaning crew doesn't steal, and if they do, the office has a fallback to recover damages.



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