what is a fidelity bond 
a fidelity bond is a form of business insurance that offers an employer protection against losses that are caused by its employees fraudulent or dishonest actions also known as an honesty bond this form of insurance can protect against monetary or physical losses in australia a fidelity bond is called employee dishonesty insurance and in the united kingdom it s called fidelity guarantee insurance understanding fidelity bondsif a company has employees who commit fraudulent acts the company itself may be exposed to legal or financial penalty in addition to the individual employee or employees who committed the act as a result companies are at risk of being exposed to such penalties especially firms with a large number of employees fidelity bonds cover firms for such damages although they are called bonds fidelity bonds are actually a form of insurance policy they are typically designated as either first party or third party a fidelity bond should not be confused with a regular bond it is an insurance policy that is neither tradable nor can accrue interest fidelity bonds are most often held by insurance companies banks and brokerage firms which are specifically required to carry protection proportional to their net capital when employed by a bank the bond is called a banker s blanket bond bbb and provides security against an employee s criminal acts among the possible forms of loss that a fidelity bond covers include fraudulent trading theft and forgery 2