Even a simple surety bond mistake can be costly, resulting in anything from failed appeals to dismissed cases and even wasted time and money. If you want to get the right bond approved quickly and without any of the headaches involved, avoid these costly surety bond mistakes.
Not Knowing Which Type of Bond You Need
There are many types of surety bonds, and each one covers a different type of situation or case. Before the underwriting process can even begin, attorneys and their clients need to be sure which type of surety bond they require. In many cases, the courts will require a specific bond based on the type of court litigation or case, so check with the court to see which type of bond you need.
Not selecting the right bond type will cost you time and could potentially derail a case if the right bond is not acquired.
Misunderstanding the Terms and Underwriting Conditions
Surety bonds specifically protect the obligee while requiring a principal to uphold their end of the agreement. Understanding the terms and conditions of the bond you are signing is important because it is essentially a binding contract. Misunderstanding these terms can lead to a breach that could cost a favorable result for your case or appeal.
Parties must also fully understand the underwriting conditions of the bond company in order to increase their chance of successfully being approved for a bond. Failure to understand what the bond company is looking for during the underwriting process could result in more expensive bonds or outright rejection of approval.
Not Getting a Bond on Time
When it comes to court-based surety bonds like injunction bonds or supersedeas bonds, timing is everything. Courts usually set a timeframe that include acquiring a bond. In many cases, an action by the court (such as an injunction) will not move forward until the required party gets the bond they need. Failure to do so can result in delaying a case or having it dismissed.
Setting the Wrong Bond Amount
Not getting enough coverage with a bond is a simple but costly surety mistake. The amount that a bond needs to cover depends on the specifics of the case and the statutory requirements. If the bond amount is not calculated and set properly, the court may reject the bond.
Avoid Mistakes. Work With the Right Surety Partner
Working with the right agency can help you avoid these costly bond mistakes. At The Patrick J. Thomas Agency, we have experience with many types of surety bonds and can help you through the entire process. Contact us today and let us know how we can help.
Disclaimer: this is for informational purposes only and is not intended to be legal advice. If you need legal counsel, please contact an attorney directly.