A
bond or
insurance policy covering a company in the event that it
loses money as the result of theft or
fraud by a particular
employee. Individual fidelity bonds generally only cover situations in which an employee commits fraud for personal
gain; they do not cover situations in which the employee, without support or knowledge of management, falsifies
trading so that it makes the company appear healthier than it is. See also:
Bonding, Operational Risk,
Federal Bonding Program.