Other Than Life (OTL) Practice Exam

Fidelity insurance is best described as which type of insurance?

1. Fire insurance

2. Dismemberment

3. Burglary

4. Dishonesty

The correct answer is: Dishonesty

Fidelity insurance is primarily designed to protect businesses from losses caused by dishonest acts, such as theft or fraud committed by employees. This type of insurance provides coverage for the financial impacts that result from such dishonest actions. Given this focus, it rightly falls under the category of dishonesty insurance, as it specifically addresses risks associated with employee misconduct. In contrast, fire insurance protects against losses from fire damage, dismemberment insurance compensates individuals for specific bodily injuries, and burglary insurance covers losses due to theft involving breaking and entering. These forms of insurance do not align with the unique purpose of fidelity insurance, which primarily safeguards against internal fraudulent activities rather than external incidents or other types of personal injury or property risk.