What type of insurance does a fiduciary bond guarantee?

What type of insurance does a fiduciary bond guarantee?

• A. Health insurance for beneficiaries
• B. Life insurance for policyholders
• C. Honesty and fulfillment of fiduciary duties
• D. Property insurance for estates

Answer: (C)

A fiduciary bond is specifically designed to guarantee the honesty and fulfillment of fiduciary duties. Essentially, this type of bond provides a financial assurance that a fiduciary—such as an executor of an estate, a trustee, or a guardian—will act in the best interests of the beneficiaries or the parties involved. The bond protects against losses that might arise from a fiduciary's failure to adhere to their responsibilities, thus fostering trust in their role. Options related to health insurance, life insurance, or property insurance are not applicable here, as those types of insurance serve entirely different functions and are focused on personal, life, or asset coverage rather than the responsibilities of fiduciaries. Thus, the focus of the fiduciary bond is uniquely on guaranteeing adherence to fiduciary responsibilities, which makes the correct answer clear.

A fiduciary bond is specifically designed to guarantee the honesty and fulfillment of fiduciary duties. Essentially, this type of bond provides a financial assurance that a fiduciary—such as an executor of an estate, a trustee, or a guardian—will act in the best interests of the beneficiaries or the parties involved. The bond protects against losses that might arise from a fiduciary's failure to adhere to their responsibilities, thus fostering trust in their role.

Options related to health insurance, life insurance, or property insurance are not applicable here, as those types of insurance serve entirely different functions and are focused on personal, life, or asset coverage rather than the responsibilities of fiduciaries. Thus, the focus of the fiduciary bond is uniquely on guaranteeing adherence to fiduciary responsibilities, which makes the correct answer clear.