Which type of insurance provides coverage against loss from lapses in integrity or fidelity of trusted individuals?

Surety insurance is specifically designed to provide coverage against loss caused by the failure of a trusted individual to fulfill their obligations, particularly those in a position of responsibility or trust. This type of insurance is often used in situations where individuals are responsible for managing funds or property, often in professional settings such as when employees handle money or valuable assets.

The essence of surety insurance lies in its focus on protecting against losses incurred due to acts of dishonesty, fraud, or mismanagement by employees, agents, or other trusted parties. This makes it distinct from other types of insurance that cover different risks.

In contrast, the other types of insurance mentioned do not serve this specific purpose. Liability insurance generally covers claims made against a policyholder for damages to third parties but does not protect against losses arising from an individual’s dishonesty. Health insurance is focused on covering medical expenses, while property insurance protects against damage to physical assets rather than fidelity issues.