What do Fidelity Bonds guarantee?

Fidelity Bonds are specifically designed to protect businesses from losses caused by dishonest acts committed by their employees. This includes theft, fraud, or other forms of misconduct that may lead to financial loss for the business. Essentially, Fidelity Bonds act as a safeguard for companies against the potential financial impact of employee dishonesty, ensuring that in the event of such acts, the company can recover some of its losses.

The primary function of these bonds is to provide assurance to employers that, should an employee engage in dishonest behavior, they will be covered for the losses incurred as a result. This coverage is crucial for maintaining the integrity of the business operations and for building trust among clients and customers.

The other options pertain to different types of insurance or guarantees that do not align with the purpose of Fidelity Bonds. For instance, contractual performance guarantees typically relate to fulfilling the terms of a contract, natural disaster coverage pertains to property protection from events like earthquakes or floods, and payment of medical claims deals specifically with health insurance. None of these options address the focus of Fidelity Bonds on employee dishonesty prevention and restitution.