What is an example of a business loss covered by a fidelity bond?

Prepare for the Arkansas Contractor Business and Law Exam. Study with flashcards and multiple choice questions. Each question comes with hints and explanations. Ace your exam confidently!

A fidelity bond is specifically designed to protect businesses from losses caused by dishonest acts of employees, with a primary focus on employee theft and fraud. This bond essentially acts as insurance against financial loss stemming from the dishonest behavior of employees, such as embezzlement or theft of funds, making it particularly relevant to the question.

The other options represent different types of insurance needs. For example, burglary of business property would be covered by a property insurance policy rather than a fidelity bond. Fire damage to equipment also falls under property insurance, as it deals with physical damage to business assets. Accidental injury on site relates to workers' compensation or general liability insurance, which covers injuries to employees or third parties. Therefore, employee theft of funds is the only choice that falls within the specific coverage provided by a fidelity bond.

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