Which policy does a practice purchase to ensure against loss if embezzlement occurs?

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Multiple Choice

Which policy does a practice purchase to ensure against loss if embezzlement occurs?

The key idea is transferring the financial risk of employee dishonesty to an insurer. A fidelity bond (bond or theft insurance) protects the practice by reimbursing losses caused by embezzlement or other dishonest acts by employees, up to the policy’s limits. This type of policy provides actual financial protection if theft occurs, not just deterrence or detection. Preventive controls like an audit program, background checks, or security cameras help reduce risk or catch problems, but they don’t provide compensation for losses when embezzlement happens. So the best fit is purchasing bond or theft insurance to ensure against and recover from embezzlement losses.

The key idea is transferring the financial risk of employee dishonesty to an insurer. A fidelity bond (bond or theft insurance) protects the practice by reimbursing losses caused by embezzlement or other dishonest acts by employees, up to the policy’s limits. This type of policy provides actual financial protection if theft occurs, not just deterrence or detection. Preventive controls like an audit program, background checks, or security cameras help reduce risk or catch problems, but they don’t provide compensation for losses when embezzlement happens. So the best fit is purchasing bond or theft insurance to ensure against and recover from embezzlement losses.

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