LIABILITY INSURANCE
Fidelity insurance definition
Fidelity insurance is commercial insurance that protects organisations against financial loss caused by employee dishonesty or fraud.
In practice, this means a form of insurance purchased by employers to protect them against the results of dishonest and disloyal acts committed by their employees. Such acts tend to be theft, fraud, embezzlement and breach of contract, leading to financial loss for the employer. This gives insurers, brokers, reinsurers and risk managers a shared way to discuss the concept when reviewing policies, claims, regulation or market data.
This term is especially useful in relation to insurance market analysis, policy wording and risk transfer decisions. The term helps users interpret insurance terminology consistently across markets, policies and risk data. It also helps users compare how insurance is structured, regulated, priced or claimed across different markets.
Fidelity insurance is closely related to employee dishonesty, crime insurance, fraud and commercial lines. Linking these concepts together helps build a clearer glossary structure and gives readers a stronger understanding of how individual insurance terms connect within wider international insurance practice.
At a glance
- Used in
- Insurance market analysis, policy wording and risk transfer decisions.
- Purpose
- Helps users interpret insurance terminology consistently across markets, policies and risk data.
- Important because
- Clear definitions support better comparison of insurance products, market practices and regulatory requirements across jurisdictions.
- Related terms
- employee dishonesty, crime insurance, fraud and commercial lines.
Example of fidelity insurance
An employee steals money from the company over several months. Fidelity insurance may cover the direct financial loss caused by employee dishonesty.