Fidelity insurance covers which type of loss?

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Prepare for the Coach CFE Exam. Study using flashcards and multiple-choice questions, each with hints and explanations. Get ready for your assessment!

Multiple Choice

Fidelity insurance covers which type of loss?

Explanation:
Fidelity insurance is designed to protect a business from financial losses caused by dishonest acts of employees, such as theft, embezzlement, forgery, or misappropriation of funds. Because the insured risk is economic harm resulting from internal fraud, the best description is economic loss due to employee dishonesty. Other types of risks mentioned—property damage, third-party liability, and disability income—are covered by different policies (property/casualty, liability, and disability insurance, respectively) and are not the focus of fidelity coverage.

Fidelity insurance is designed to protect a business from financial losses caused by dishonest acts of employees, such as theft, embezzlement, forgery, or misappropriation of funds. Because the insured risk is economic harm resulting from internal fraud, the best description is economic loss due to employee dishonesty. Other types of risks mentioned—property damage, third-party liability, and disability income—are covered by different policies (property/casualty, liability, and disability insurance, respectively) and are not the focus of fidelity coverage.

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