There are many different types of court bonds, all serving different purposes. Understanding the differences in court bonds can ensure you are getting the right court bond for your specific needs.
What is a Court Bond?
To put it simply, court bond is a general term used for all surety bonds that are needed by individuals when they are involved in pursuing an action through a court of law. Court bonds can be divided into two main categories:
The main difference is that a Judicial Bond promises payment of sum of money that would be required in a court case, while a Fiduciary Bond only promises faithful and honest performance of a duty.
You can learn more by checking out our Court Bond Guide.
What is a Judicial Bond?
Judicial bonds are used when entering into a civil court proceeding. These bonds ensure that an individual is protected from possible losses that result from the decision made by the court. The judicial bond category can be divided into two further categories:
Defendant bonds block a plaintiff’s action to pursue satisfaction of a claim. They generally permit the defendant to regain control of contest property or postpone the enforcement of a decree affecting rights to property.
Common types of defendant bonds are
Plaintiff bonds are required of plaintiffs to ensure protection of the defendant should the plaintiff lose the lawsuit. They hold the plaintiff liable for any damages that the defendant suffers due to the result of the court proceeding.
Common types of plaintiff bonds are
What is a Fiduciary/Probate Bond?
The terms fiduciary and probate can be used interchangeably; they both signify bonds required of individuals who have been appointed in a court of law to care for another individual or another individual’s assets. Probate Bonds are often needed in the probate process.
Not sure about probate? Check out this post on how the probate process works.
These bonds ensure that the court-appointed person fulfills his/her obligations and duties and does not mismanage or dishonestly handle assets. Just like the judicial category, the fiduciary/probate category can be further separated into subcategories. These subcategories are:
The Probate bond category includes bonds required for fiduciaries that manage and control the assets of an individual who is deceased.
Common types of Probate bonds are
- Administrator bonds
- Personal Representative bonds
- Estate of Court bonds
- Executor of Court bonds
The Guardianship bond subcategory includes bonds required for fiduciaries that manage and control the assets of what is called a ward, such as a minor or an incapacitated/incompetent person.
Common types of these bonds are
The final subcategory, the Trustee bond category, includes bonds required of receivers and trustees appointed by a court of law to manage the assets of a business or individual.
Common types of bonds in this category include
- Receiver bonds
- Trustee bonds
- Disbursing Agent bonds
Underwriting For Court Bonds
Each bond will have different underwriting (or risk-assessment) depending on the degree of risk involved, the specifics of the case, and the financials of the individual getting the bond.
Since judicial court bonds are often based on a financial guarantee, (unlike fiduciary bonds which are often based on ethical completion of duties) financial strength and stability is vital. Underwriting for fiduciary bonds will include different aspects, such as obtaining a list of the estate’s assets, obtaining a copy of the will, etc.
Some bonds are less risky than others, so it is important to understand that each bond will be different in its underwriting.
For example, Conservatorship and Guardianship bonds increase in risk over time. The longer the duration of the obligation, the higher the risk. Understanding the facts of the exact bond you need will help you prepare for the proper underwriting so you can avoid pitfalls and surprises.
How Much Does a Court Bond Cost?
The cost of all of these bonds will vary depending on the type of bond, the case, the state the case takes place in, and what judge oversees the case.
One way to secure the best price for your court bond is to get your bond through a surety bond agency that has access to multiple carriers and the best rates. In most cases, the court requires the bond before proceeding, so purchasing your bond is the first step in the court process.
If you need a court bond, Surety Solutions can get you bonded today.