Bail Bonds

A bail bond agent, or bondsman, is any person or corporation which will act as a surety and pledge money or property as bail for the appearance of a criminal defendant in court. Although banks, insurance companies and other similar institutions are usually the sureties on other types of contracts (for example, to bond a contractor who is under a contractual obligation to pay for the completion of a construction project) such entities are reluctant to put their depositors' or policyholders' funds at the kind of risk involved in posting a bail bond. Bail bond agents, on the other hand, are usually in the business to cater to criminal defendants, often securing their customers' release in just a few hours.

Surety Bonds

A surety bond is a promise to pay one party (the obligee) a certain amount if a second party (the principal) fails to meet some obligation, such as fulfilling the terms of a contract. The surety bond protects the obligee against losses resulting from the principal's failure to meet the obligation.

A surety bond is a contract among at least three parties:
The obligee - the party who is the recipient of an obligation,
The principal - the primary party who will be performing the contractual obligation,
The surety - who assures the obligee that the principal can perform the task.

Through a surety bond, the surety agrees to uphold — for the benefit of the obligee — the contractual promises (obligations) made by the principal if the principal fails to uphold its promises to the obligee. The contract is formed so as to induce the obligee to contract with the principal, i.e., to demonstrate the credibility of the principal and guarantee performance and completion per the terms of the agreement.

The principal will pay a premium (usually annually) in exchange for the bonding company's financial strength to extend surety credit. In the event of a claim, the surety will investigate it. If it turns out to be a valid claim, the surety will pay it and then turn to the principal for reimbursement of the amount paid on the claim and any legal fees incurred.

If the principal defaults and the surety turns out to be insolvent, the purpose of the bond is rendered nugatory. Thus, the surety on a bond is usually an insurance company whose solvency is verified by private audit, governmental regulation, or both.

A key term in nearly every surety bond is the penal sum. This is a specified amount of money which is the maximum amount that the surety will be required to pay in the event of the principal's default. This allows the surety to assess the risk involved in giving the bond; the premium charged is determined accordingly.

Surety bonds are also used in other situations, for example, to secure the proper performance of fiduciary duties by persons in positions of private or public trust.

These surety bonds are the same as "Probate Bonds". Estate Bonds are mandated by the court in order to provide assurance that the executor of an estate properly allocates the assets for an incapacitated or deceased person with whom they have been assigned fiduciary duties.

As previously mentioned, Estate Bond is just another way of saying "Probate Bond". Other common ways of referring to "Probate Bonds" are "Executor Bonds", and "Fiduciary Bonds".

Judicial Bonds

A bond filed with the court as a guarantee. For example, a party to a court action may post a judicial bond to guarantee payment of a verdict while an appeal is being considered. Judicial bond is a broad category that includes a variety of specialized bonds such as a fiduciary bond, a removal bond, and an appeal bond.