Fidelity bonds cover employees against dishonest acts by employees.
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A. B.A
The statement is true. Fidelity bonds, also known as employee dishonesty insurance, protect employers from financial losses resulting from fraudulent or dishonest acts committed by their employees.
These bonds are typically purchased by employers who want to safeguard against the risk of loss due to employee misconduct. Fidelity bonds cover a variety of dishonest acts, including theft, forgery, embezzlement, and other fraudulent activities.
Fidelity bonds may be required by law or by certain industry regulations, particularly for companies that handle large sums of money or valuable assets. They are also commonly used as a risk management tool for businesses of all sizes and types.
It's important to note that fidelity bonds do not cover losses resulting from poor business decisions, errors in judgment, or ordinary negligence. These types of losses are typically covered by other types of insurance, such as professional liability or general liability insurance.
In summary, fidelity bonds provide an important form of protection for employers against financial losses resulting from dishonest acts committed by employees.