Registered Insurance Brokers of Ontario (RIBO) Practice Exam

Which type of policy protects a client against losses due to employee dishonesty?

1. Fidelity policy

2. General liability policy

3. Workers' compensation policy

4. Property insurance policy

The correct answer is: Fidelity policy

The correct answer is indeed a fidelity policy, as it is specifically designed to protect businesses from losses that occur due to dishonest acts by their employees, such as theft, fraud, or embezzlement. This type of insurance provides coverage for the financial losses incurred as a result of these actions, enabling businesses to recover and maintain their financial stability. In contrast, a general liability policy primarily covers claims related to bodily injury, property damage, or personal injury to third parties, which does not encompass employee dishonesty. A workers' compensation policy is focused on providing benefits to employees who suffer work-related injuries or illnesses, and it does not address the issue of theft or dishonesty by employees. Property insurance protects against damage to physical assets owned by the business, but it does not cover losses resulting from employee misconduct. Therefore, the fidelity policy is uniquely positioned to address the specific risks associated with employee dishonesty.