Also known as: Employee Dishonesty Coverage · Fidelity Coverage · Commercial Crime Bond
Coverage that protects a business against financial losses caused by dishonest acts of its own employees, such as theft, fraud, or embezzlement.
A fidelity bond (often sold as part of a commercial crime policy) reimburses a business for direct financial loss caused by employee dishonesty — including theft of money, securities, or property, forgery, and embezzlement. Unlike liability insurance, which covers harm to third parties, a fidelity bond is first-party coverage that protects the company itself. Some client contracts and financial-services regulations require it before a vendor can handle client funds or sensitive assets.
A fidelity bond covers direct financial loss to your business from dishonest employee acts — theft of cash, securities, or property, plus forgery and embezzlement. Broader commercial crime policies can also extend to third-party fraud such as social engineering, wire-transfer fraud, and computer fraud. It does not cover ordinary business losses, bad debts, or third-party liability claims.
A fidelity bond is a form of insurance, but it is first-party coverage — it reimburses your own business for losses caused by employee dishonesty, rather than defending you against a third party's claim. Traditional liability insurance is third-party coverage. In practice, fidelity/crime coverage is often added as part of a broader commercial insurance program.
You likely need one if employees handle cash, client funds, securities, or valuable property, or if a client contract or regulation requires it — common in fintech, financial services, property management, and janitorial or in-home services. Even without a contractual requirement, businesses with employee access to money or sensitive assets use fidelity bonds to protect against internal theft and fraud.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.