Learn more about cost bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are Cost Bonds?
Cost bonds are a type of court surety bond designed to guarantee the payment of costs associated with litigating a given case. This can include court fees, attorney fees, deposition fees, the cost of hiring a legal researcher, paralegal fees, private investigator fees, photocopying fees, and more. When you purchase this bond, you are pledging to pay whatever court costs and legal fees may be incurred in pursuing a case.
Who Needs Them?
You need a cost bond if the court tells you that you do. These bonds are frequently required in appellate cases. When a case has already been decided in one party’s favor and the other party files an appeal, it’s only fair that the appealing party be held responsible for the additional costs associates with the appeals process. These bonds are also usually required in cases brought by plaintiffs in a state in which they do not reside.
How Do They Work?
There are three parties involved in a cost surety bond agreement. The court that establishes the requirement for the bond is the obligee. The party required to purchase the cost bond is the principal, and the underwriter that issues the bond is the surety. The terms of the bond specify the costs to be paid by the principal and under what conditions, at the conclusion of the trial or hearing.
If the principal fails to remit court costs and legal fees as specified in the bond agreement, the obligee can file a claim against the bond. If the surety determines the claim to be valid, it will pay it up to the full penal amount of the bond. But ultimately, the principal is responsible for reimbursing the surety for the amount paid out to the claimant.
What Do They Cost?
The court establishes the required amount of the cost bond, which is typically rather small, often under $500—though the amount will vary by state. The premium you’ll pay is only a small percentage of the full bond amount. The surety establishes the principal’s premium rate on a case-by-case basis, taking into account the individual’s credit score and financial stability as well as the facts of the case.
If you anticipate needing a cost bond because of an upcoming legal matter, give us a call to request a quote, or use our convenient online form.