When it comes to surety bonds, there are literally thousands of different flavors to choose from. Whereas all surety bonds are designed to be a form of fiduciary responsibility to cover financial losses in the event something doesn’t go according to plan… (like if you’re a contractor and you accidentally burn down your client’s house for example,) sometimes those risk factors can be incurred by somebody lying, or misrepresenting themselves in some way. Enter the fidelity bond.
For protection against losses incurred from fraudulent acts by specific individuals in your clients’ organization, a fidelity bond will insure your client’s business or organization from losses from dishonest acts by its employees.
Although these are officially called bonds, they act more like an insurance policy to protect the company from things like employees stealing (like money, computers, and other assets), or other crimes where the employee’s intent is to cause the company losses (burglary, arson, theft, fraud, etc.)
The fidelity bonds are available as first-party (for employees), or third-party (for consultants/contractors).
In a business partnership, it is the responsibility of the business working as a contractor or subcontractor to carry third-party fidelity bond coverage.