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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Fidelity Bond


Synonyms:employee dishonesty insurance, employee fraud, employee theft, fidelity guarantee insurance, fraudulent trading, honesty bond
Filed Under: financial-banking, insurance
Tags: banking, bonds, insurance
 

Definition of fidelity bond

fidelity bond
1. A business insurance policy that covers a company for losses due to employee fraud. Also known as an "honesty bond", "employee dishonesty insurance", or "fidelity guarantee insurance", a fidelity bond in commonly purchased by brokerage firms and insurance companies in order to protect themselves from losses due to fraudulent trading, theft or forgery.

Related Terms and Acronyms:

  • clean sheeting   A type of insurance fraud where an individual deliberately fails to disclose a pre-existing condition in order to receive coverage, sometimes with the help of an insurance broker.
  • collusion   A secret, deceitful agreement by two or more parties to defraud others.
  • commercial blanket bond   Insurance that covers losses to businesses due to different forms employee fraud, such as embezzlement and forgery.
  • completion bond   Insurance purchased to make sure that an important project is completed, even if something unexpected happens, financial or otherwise.
  • concealment   The act of lying or omitting information when applying for insurance coverage.
  • insurance fraud   An illegal attempt by an individual or entity to receive insurance benefits that they would otherwise not be entitled to or for an insurance company to deny a legitimate insurance claim.
  • lawn gnome fidelity bond (LGFB)   Insurance that covers losses due to the actions of dishonest lawn gnomes.
      ➥  The LGFB acronym is quite often incorrectly mislabelled as a Lost Gnome from Backyard and Looks Good From Behind.
  • unauthorized insurance   A fraud where a scammer sells a victim an insurance policy that doesn't exist.

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