Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Casualty InsuranceMedium
A Florida restaurant owner wants to protect against financial losses arising from employee theft of money and securities. They are particularly concerned about a manager who handles daily cash receipts and deposits. Which type of insurance or bond would directly address this specific risk?
- AFidelity Bond
- BCommercial General Liability (CGL)
- CBusiness Owners Policy (BOP)
- DProfessional Liability
Show answer & explanationAnswer & explanation
Correct answer: A. Fidelity Bond
A Fidelity Bond (also known as employee dishonesty coverage, often part of a Crime policy) is specifically designed to protect an employer from financial losses due to dishonest acts of employees, such as theft, embezzlement, or forgery of money and securities. This directly addresses the owner's concern about a manager handling cash.
Why the other options are wrong
- B. CGL covers liability for bodily injury and property damage to third parties, not employee theft.
- C. A BOP combines property and liability coverage, but employee dishonesty is usually an optional add-on (often a Fidelity Bond or Crime coverage) rather than a base coverage.
- D. Professional Liability covers errors or omissions in professional services, not employee theft of funds.
Fidelity Bond
A type of surety bond that protects an employer from financial losses due to the dishonest acts of employees, such as theft, embezzlement, or forgery of money and securities.
- Protects employers from employee dishonesty.
- Covers theft, embezzlement, forgery.
- Can be scheduled (specific employees) or blanket (all employees).
- Often included in a Crime Insurance policy.
Memory trick: Business Risk: Protect your assets from every angle, inside and out.