What is the primary purpose of fidelity bond insurance?

Fidelity bond insurance is specifically designed to protect businesses from losses caused by the dishonesty or fraudulent acts of their employees. This type of insurance comes into play when an employee steals money or property from the employer or engages in deceptive practices that lead to financial damage to the company. Essentially, it acts as a safeguard for businesses, ensuring they can recover losses incurred due to these acts of employee dishonesty.

The other options highlight different aspects of insurance coverage but do not focus on employee-related dishonesty. For example, equipment damage refers to physical asset protection usually covered under other forms of insurance, while property theft is generally addressed through commercial property insurance. Health coverage for employees falls under health insurance and employee benefits rather than fidelity bonds. Thus, the primary purpose of fidelity bond insurance is to specifically address the risks associated with employee dishonesty, making it a vital component of business security.