Which type of bond would primarily protect against financial loss due to theft by employees?

A fidelity bond is specifically designed to protect businesses from financial losses due to theft, embezzlement, or dishonest acts committed by employees. This type of bond provides coverage for both the employer and the company, ensuring that the employer can recover some or all of the losses incurred as a result of employee theft.

In this context, fidelity bonds are crucial for organizations that handle significant amounts of money or sensitive information, as they help mitigate the risk associated with employee dishonesty. These bonds are also essential in environments where trust is paramount, reinforcing financial stability and security for the business.

The other types of bonds listed serve different purposes. Performance bonds are focused on ensuring that contractors fulfill their obligations in construction or service contracts. License bonds are required to ensure compliance with certain laws and regulations but do not specifically address employee dishonesty. Subdivision bonds are related to the construction of public infrastructure, ensuring that developments meet local standards, and again, do not provide coverage for employee theft.