What is a Court Bond?
Court bonds can come in many different forms and they serve a multitude of different purposes. “Court bond” is an umbrella term that can encompass many different words, phrases and bonds pertaining to the court system. Essentially, court bonds are a type of surety bond that might be required during court proceedings. This includes the Administrator Surety Bond, Cost Surety Bond, Appeal Surety Bond, Trustee Surety Bond and many others.
The purpose of court bonds is to help safeguard plaintiffs and defendants from financial harm and fraud. These bonds all serve different purposes, but they can be divided into two distinctive categories: judicial and fiduciary bonds.
What is a Judicial Bond?
Judicial bonds are a kind of court bond that are used in civil court cases that have to do with the court’s ruling. Judicial bonds generally protect against loss that can occur as a result of a ruling. Because it is difficult to predict the ruling of a court, the underwriting process can be a bit rigorous and these bonds can sometimes be hard to qualify for.
A common kind of judicial bond is a bail bond. While Surety1 does not currently write bail bonds, they are generally the most well known kind of court bond and the best to use as an example. Bail bonds serve as a form of financial guarantee that a jailed person will return to court for hearings.
What is a Fiduciary Bond?
To understand what a fiduciary bond is, it is important to understand what, usually who, a fiduciary is. A fiduciary is a person who the court tasks with guarding and handling assets or estates.
A fiduciary bond, also called a probate bond, guarantees that the fiduciary will responsibly and ethically handle assets assigned to them. Individuals appointed by a court to handle assets generally must post one of these bonds. This bond will cover the amount of assets the person is handling to ensure proper protection. It also helps ensure the person completes all assigned duties to the standard the court sets.
Types of Court Bonds
There are many different types of court bonds that are required. This list will just name a few of the big ones that we sell here at Surety1.
Administrator Surety Bond – Administrator Surety Bonds, also known as Executor Surety Bonds, are a type of fiduciary bond. Probate courts require the Administrator Surety Bond to help ensure the protection of the administration of an estate, will or guardianship from financial harm. The court will determine the amount of this bond to ensure that it is adequate to protect the entirety of the estate in question.
Appeal Surety Bond – The Appeal Surety Bond is a judicial bond usually required if the plaintiff or defendant want to appeal a case to a higher court. The appeal surety bond suspends the lower court’s decision until the higher court can hear and decide the case. An appeal bond guarantees that there will be money available to pay not only the original judgement, but the appeal, regardless of whether the appeal was successful or not. This bond must cover 100% of the collateral in order to ensure proper compensation.
Cost Surety Bond – The Cost Surety Bond is a type of judicial bond that ensures proper compensation to clerks in certain court cases. This bond is generally required for people with court cases outside the state they currently reside in.
Guardian Surety Bond – The Guardian Surety Bond is a fiduciary bond for legal guardians. This bond helps ensure that legal guardians assigned to help disabled people or minor’s finances do so properly. If the guardian does not do his or her job correctly, this bond helps protect the financial interest of the person the guardian has wronged.
Trustee Surety Bond – The Trustee Surety Bond is a fiduciary bond that guarantees that trustees will act in accordance with the ruling of the court. This bond protects a trust from loss as a result of a trustee acting dishonestly or unethically.