What is the primary purpose of a fidelity bond?

The primary purpose of a fidelity bond is to guarantee faithful performance by employees. This type of bond is designed to protect businesses from financial losses that could occur due to dishonest acts or fraud committed by employees. By providing this guarantee, fidelity bonds help maintain trust and security within an organization, enabling employers to have peace of mind knowing that they are protected against potential dishonest behavior.

In contrast, the other options relate to different types of coverage or protections. For instance, while protecting property against theft is a concern for many businesses, this is typically handled through a burglary or theft insurance policy rather than a fidelity bond. Similarly, liability coverage is more about protecting against claims made by third parties, which falls under general liability insurance, while workers' compensation deals specifically with employee injuries inside the workplace. By understanding the specific functions of fidelity bonds, one can appreciate their important role in employee integrity within a business context.