What is meant by protected deposit?

Tenancy Deposits

I am about to become a landlord for the first time in the next month or so and I have been busy reading all maner of advice for quite some time in preparation. I have subscribed to and downloaded the interactive learning guide from this site and bought books. Most recently I have read the latest rules coming into force regarding deposits too. One (of several) thing(s) that puzzles me is the meaning of a 'protected' deposit... what is it being protected from? Also, if there is a free deposit scheme then why would someone pay a company (DepositGuard) a premium/payment and then hold on to the deposit themselves? What does the premium/payment provide? Are they expecting to provide some form of service at some point? I do understand the rules, its just the principal of 'Protecting the deposit' that baffles me.