What type of insurance indemnifies against economic loss caused by dishonest acts of its employees?

• A. Liability Insurance
• B. Fidelity Insurance
• C. Property Insurance
• D. Health Insurance

Answer: (B)

Fidelity insurance protects a business from financial losses caused by dishonest acts of its employees, such as theft, embezzlement, or forgery. It is designed to cover the economic harm that can occur when trusted staff misuse assets or funds, reimbursing the employer up to the policy limits. This focus on internal fraud distinguishes it from other types of coverage: liability insurance covers damages or injuries to others; property insurance protects physical assets from events like fire or theft; and health insurance covers medical costs for individuals. So, when the risk is internal dishonesty by employees causing financial loss, fidelity insurance is the appropriate protection.