What does a fidelity bond protect business owners from?

A fidelity bond is specifically designed to protect business owners from losses that arise due to employee dishonesty. This type of bond provides financial compensation to a business if an employee is found to have stolen money, property, or other assets from the business. The coverage typically includes issues such as embezzlement, fraud, and theft, creating a safety net for business owners against dishonest acts carried out by their employees.

Understanding this concept is essential for business owners, as employee dishonesty can significantly impact financial stability. Conversely, the other options, such as losses from natural disasters, stock market investments, or supplier defaults, are covered by different types of insurance or financial instruments and do not relate to the specific purpose of a fidelity bond.