Learn more about injunction bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are Injunction Bonds?
Injunction bonds are a common type of court bond. Injunctions come into play when there is a legal dispute between two parties and a judge orders one of the parties, the defendant, to refrain from doing something that would harm the plaintiff or infringe on the plaintiff’s rights. Often, a temporary preliminary injunction is issued right away and remains in place until there is a hearing on the matter. The judge will then decide either that a permanent injunction is warranted or dismisses the preliminary injunction.
The plaintiff is required to purchase a surety bond when the defendant in the case has been issued an injunction. The bond serves as the plaintiff’s guarantee to compensate the defendant for any financial loss and/or legal fees resulting from the injunction if the court finds that the injunction should not have been issued.
Who Needs Them?
Most people are familiar with prohibitive injunctions that prevent the defendant from doing something. There are also mandatory injunctions. Instead of ordering the defendant to refrain from doing something, a mandatory injunction requires the defendant to take a particular action. Temporary, prohibitive, and mandatory injunctions all may result in the need for an injunction bond.
How Do They Work?
If the court determines that the injunction should not have been issued, the defendant may file a claim against the plaintiff’s bond to recover financial damages and/or legal fees. The surety will confirm that the claim is valid and will then make payment to the defendant. However, the plaintiff is legally obligated to reimburse the surety company for that amount.
What Do They Cost?
The court sets the bond amount. It is intended to be high enough to cover the damages and legal costs if it turns out that the defendant should not have been enjoined. Consequently, an applicant will need to provide a copy of the court order to the surety company to establish the required amount.
Applicants with good credit pay an annual premium that is typically less than 2% of the total amount of the bond. Those with poor credit may pay a higher premium. Plaintiffs may also be required to put up collateral in the form of cash or some other form of security in order for the bond to be issued.
Use our convenient online system to apply for an injunction bond today.