The Replevin Surety Bond focuses on ownership disagreement of personal property between the defendant and the plaintiff in court. The three parties of this bond include the obligee, the principal, and the surety company. The obligee is the court that is requiring the principal to be bonded. The principal must be bonded in order to proceed with the court case. The surety company is the party that underwrites and ensures the bond.
When determining the ownership of personal property, a Replevin Surety Bond is put in place. Before the court hearing takes place, the bond allows the plaintiff to take ownership of the personal property in question.
If the court rules in favor of the defendant, then the bond will guarantee the plaintiff will return the property to the defendant. However, if the plaintiff does not return the property in original condition, a claim can be filed against the bond by the defendant.
The surety bond is an agreement between the three parties that the principal will act accordingly with the bond requirements. If the principal acts fraudulently or fails to abide by the bond requirements, then the surety company will cover the claim filed against the bond.
As stated before, the court requires the plaintiff to be bonded to ensure the plaintiff does not act against the bonding requirements. The principal should be informed on all requirements before applying for a bond. If the principal acts against the bond and a claim is filed, then the surety company will pay for all paid claims, which the principal must then pay back to the surety.
The cost for the bond is also referred to as the bond premium. The bond premium is the one cost that the surety company sets. All other fees that are related to the bond are set by the obligee. The bond premium is only a small percentage of the bond amount.
The bond amount is set by the obligee, not the surety company. The judge will set the bond amount based on the specific court case. The bond amount is the amount of coverage the surety company will pay out to the party harmed if a claim is filed against the bond. Usually, the bond amount must cover double the value of the property in question.