What type of bond covers fidelity loss arising from employee dishonesty?

The correct answer is a fidelity bond. A fidelity bond specifically protects against losses incurred due to employee dishonesty or theft. This type of bond is essential for businesses as it provides coverage against fraudulent acts committed by employees, ensuring that if an employee steals money or property from the business or causes a loss through dishonest behavior, the company is compensated for that loss.

A commercial blanket bond can also provide coverage for employee dishonesty but is typically broader, covering all employees under one bond rather than specifying individual acts of fidelity. However, when referring specifically to fidelity loss due to employee dishonesty, a fidelity bond is the more direct and precise choice.

Performance bonds, on the other hand, are designed to ensure that a contractor fulfills their contractual obligations, while general liability bonds cover claims related to bodily injury or property damage. These are unrelated to employee dishonesty, highlighting why they do not fit the context of this question.