Which type of insurance cover can be purchased in the UK to protect against dishonesty of an employee?

The correct choice focuses on a specific type of insurance known as fidelity insurance or employee dishonesty insurance, which is designed to protect employers from financial losses resulting from dishonest acts committed by employees. This type of cover is particularly relevant for businesses that handle significant amounts of money or valuable assets, as it provides a safety net against theft or fraud orchestrated internally.

Fidelity insurance typically covers losses incurred as a result of actions such as embezzlement, fraud, or theft by employees. By having this coverage, businesses can mitigate the financial impact of dishonesty, ensuring that they are protected against potential liabilities due to the actions of staff members.

In contrast, the other options presented do not relate directly to the protection against employee dishonesty. Investment losses or failures in business ventures pertain to market risks and entrepreneurial risks, which are fundamentally different from the internal risks of employee dishonesty. Similarly, war damage pertains to property risks associated with conflicts, which bears no relevance to the issue of employee conduct or fidelity. Thus, the focus should remain on the specific risks addressed by fidelity insurance for clarity in understanding the available protective measures against employee dishonesty.