A Fidelity Bond protects an employer from employee theft. Usually, Insurance Companies and security firms are required to obtain a fidelity bond. Overall a Fidelity Bond guarantees the employer’s money and property in the event the employee causes damage through a negligent or dishonest act.
Surety Bonds are three-party agreements in which the issuer of the bond (the surety) joins with the second party (the principal) in guaranteeing to a third party (the obligee) the fulfillment of an obligation on the part of the principal. The obligee is the party (person, corporation or government agency) to whom a bond is given. Essentially, the obligee is also the party protected by the bond against loss.
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