What does a "fidelity bond" protect against?

A fidelity bond is specifically designed to protect businesses from losses that occur as a result of employee theft or fraud. This type of bond provides financial assurance that if an employee commits dishonest acts, such as stealing money or property from the employer, the business will be compensated for those losses.

Fidelity bonds are crucial for businesses as they ensure a layer of security against the risk of employee dishonesty, which can lead to significant financial repercussions. By having this protection in place, employers can mitigate the impact of potential theft or fraud and instill trust within their operations.

The other options do not align with the protective scope of a fidelity bond. Natural calamities are typically covered by different types of insurance policies, such as property insurance. Losses due to poor business management pertain more to operational risks rather than fidelity, and health issues affecting work are generally addressed through employee health insurance or disability policies, not fidelity bonds.