The process of obtaining a surety bond for a client is filled with pitfalls that attorneys who are not familiar with the process often fall into. When it comes to surety bonds, there really isn’t a large margin for error, and failure to navigate the process can often lead to bonds being delayed, denied, having a claim later brought up against them.
Because of this, it is imperative for attorneys to be able to recognize the issues that can arise when obtaining a bond and take steps to remedy them immediately. Here are a list of the most common mistakes that can be made during the surety bond process:
Getting the Wrong Type of Bond
There are numerous types of surety bonds that can be obtained, and attorneys need to speak with their clients about which type of bond is best for their situation. Often times the client will rely on the attorney to make sure the proper surety bond is used so talking with an experienced agent is very important.
Not Getting Enough Coverage
Pinning down the actual amount of the surety bond is one most important aspects of the process. Depending on the type of bond the amount may differ depending on the statutory requirements. If the bond amount is not calculated correctly the bond could be rejected by the court or help the adverse side enforce their position.
Failing to Obtain Preliminary Bond Approval
Knowing if your client can obtain a bond will help you coordinate their case. Getting approval for a bond ahead of time can help you avoid some major obstacles when moving a case ahead in the court system. Some courts and judges like knowing you’ve got approval ahead of time.
Not Preparing Clients for the Bond Process
Before a bond can be approved, parties are subject to a underwriting that can include a background check and financial analysis. In order to expedite the surety bond process, attorneys should talk with their surety bond agent and help clients gather all the information they need and submit it early.
Taking too Long
When it comes to a supersedeas bond, which can be a more tricky process, attorneys need to prepared to ask the court for reasonable time to obtain a bond (some judges don’t understand the underwriting process) and act fast in order for the court to put a hold on the judgement. In the case of an estate bond, waiting too long after the death of a party to appointment the fiduciary and obtain a bond is a serious red flag that underwriters look for.
It is always safer to act quickly when it comes to obtaining surety bonds, which is why choosing the right bonding agency is important. At the Patrick J. Thomas Agency, we have a fast and secure bond application process that helps attorneys obtain the bonds they need, when they need them. Contact us today to get started right away.
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.