What is the primary purpose of fidelity bonding?

The primary purpose of fidelity bonding is to protect against dishonest acts of an individual. This type of bonding specifically safeguards property management companies and their clients from losses incurred due to fraudulent or dishonest behaviors by employees, such as embezzlement, theft, or misconduct. Fidelity bonds serve as a financial safety net, ensuring that, in the event of such dishonest acts, the company can recover some or all of the financial losses, thus helping maintain trust and integrity within the operations of property management. This coverage is particularly important in real estate and property management, where dealings typically involve large sums of money and sensitive financial information.

In contrast, options focusing on fire damage, theft, or health coverage for employees address different areas of risk management but do not specifically concern fidelity bonding, which is solely aimed at dealing with dishonest actions of individuals within an organization.