In a Fidelity Bond, what is the term used to describe the employee involved?

In the context of a Fidelity Bond, the term used to describe the employee involved is "Principal." This term refers to the individual whose actions are being guaranteed by the bond. In a Fidelity Bond, the Principal is typically the employee whose dishonest actions, such as theft or fraud, would trigger a payout from the bond to the employer or business.

Understanding the roles within a Fidelity Bond helps clarify how the bond functions as a protective financial mechanism. The Principal is the party whose conduct is subject to the risk. By design, Fidelity Bonds serve to protect employers against potential losses incurred due to the dishonest acts of their employees, thereby establishing a trust framework in the employer-employee relationship.

In this context, while "Obligee" refers to the entity that receives the protection of the bond (typically the employer), "Surety" refers to the company that underwrites the bond and guarantees payment if the Principal causes a loss. "Insured" generally pertains to individuals or entities covered under insurance policies, which does not accurately apply to the structure of a Fidelity Bond.