fiduciary bond

A fiduciary bond is a type of surety bond filed by a fiduciary, such as an estate administrator, to guarantee the faithful performance of their duties. This bond protects the obligee (the person protected) from losses stemming from the principal's (the bonded person) failures or dishonesty.12

Unlike insurance, which covers random events, bonds cover events within the control of the bonded person. The surety, who reimburses the obligee for losses, has the right to recover those losses from the principal. Fidelity bonds specifically protect employers against losses from dishonest acts of employees, while surety bonds can also cover incapacity to perform agreed-upon work.2