Fidelity Bond is more commonly known as an Employee Dishonesty Bond as it protects your company from the wrongdoings of your employees.
For example, if your employee happens to steal money or other valuables from your company, the bond will protect and insure your business. This is known as a First Party Fidelity Bond. Traditional property insurance will not cover employee theft, so obtaining this coverage is very prudent.
Your client might also require that you obtain a fidelity bond in the event that one of your employees steals from your client. This is known as a Third Party Fidelity Bond. In many cases this coverage is required by contract prior to engaging into any services for the client.
When it comes down to it, both types of bonds are immensely beneficial and most companies will want to obtain both. By obtaining a 1st and 3rd party fidelity bond, you will be able to protect your company and your clients, while worrying less about devious employees.