Final answer:
The Obligee is the party protected by a fidelity bond. This bond insures a business against losses caused by dishonest acts of its employees.
Step-by-step explanation:
The party that is protected by a fidelity bond is the Obligee. A fidelity bond is a type of insurance protection that covers policyholders for losses that they incur as a result of fraudulent acts by specified individuals. It usually insures a business for losses caused by the dishonest acts of its employees.
The party protected by a fidelity bond is the Principal. A fidelity bond is an insurance policy that protects a company from financial loss due to the dishonest acts of its employees, such as theft or fraud. The Principal is the party who purchases the bond, and they are the ones who are covered by the bond in the event of a covered loss.
For example, if an employee steals money from the company, the Principal can file a claim with the insurance company that issued the fidelity bond to seek reimbursement for the stolen funds.
The parties involved in a fidelity bond include the principal (the employee or party whose honesty is being insured), the obligee (the business that is protected from losses caused by the principal), and the guarantor (the insurance company that issues the bond). So when considering who is protected by the bond, it is the obligee (Option B) that is covered from potential losses.
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