Auction And Auctioneer Bonds
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What you need to know about Auction And Auctioneer Bonds
Auctioneer bonds are legally binding agreements between three parties: auctioneers, the government agency responsible for regulating auction activity in the local jurisdiction, and a surety company.
The government agency is the Obligee and establishes the obligations that the auctioneer (the Principal) must follow. The surety (also called bonding company) issues the bond guaranteeing the performance of the auctioneer.
Auctioneer bonds are required in most states to be eligible for an auctioneer’s license. When the surety company issues the bond, they provide the government agency a guarantee that the customers who take part in an auction held by a licensed auctioneer will receive payment for financial losses incurred from any violation of the statutes and regulations set forth by the auctioneer’s license.
If the auctioneer fails to meet the obligations set out by the government agency, the surety will pay out any damages up to the bond amount. The auctioneer is liable for the losses and is legally required to reimburse the surety company for any damages paid under the bond.
Auctioneer surety bond costs vary depending on the total bond amount and the premium rate. The government agency sets the required bond amount and the surety company determines your premium rate, which is the percentage of the total bond amount you pay as the premium.
Premium rates for auctioneer bonds tend to range between 0.5% and 1% of the total bond amount. Many auctioneer surety bonds do not require a credit check––meaning that bad credit does not impact the premium.
Below are the lowest premiums EZ Surety has issued for auctioneer bonds in popular states.
You’ll know if you need a surety bond because some entity will have required you to obtain one. They must also inform you of which specific bond type you’ll need. There are thousands of bonds across the country, all of which vary by state and industry.
Visit EZSuretyBonds.com to browse hundreds of bonds by state, type, or industry.
