Cost Bond Guide
Some plaintiffs are required to get surety bonds to guarantee payment of court costs in litigation cases. Learn the ins and outs of the bonding process in this guide.
Bond Overview
- Purpose: To guarantee payment of attorney fees to the defendant if the plaintiff loses
- Who Needs It: Plaintiffs in certain legal proceedings, typically if they are not state residents
- Required Amount: Varies, determined on a case-by-case basis by the court
- Premium Rates: 1% for all bonds below $200,000
What Are Cost Bonds?
In some legal proceedings, the court requires a cost bond to guarantee payment of attorney fees to the defendant if the plaintiff loses the case. Typically, these bonds are required in state court cases when the plaintiff is a non-resident or if the court suspects motives behind a lawsuit. Cost bonds are legally referred to as undertakings.
The court may require your bond to cover other litigation expenses, be sure to verify your exact coverage amount.
How Much Are Cost Bonds?
The court will determine your required bond for cost amount. Your premium price will then be calculated as a small percentage of the bond total based on the bond amount.
If your bond coverage is below $200,000, you’ll be instantly approved at a rate of 1%. For example, a $100,000 cost bond would have a $1,000 premium. Applications for bond amounts over $200,000 require underwriting review and a soft credit check to determine your price. 100% collateral may be required to guarantee funds are available.
How Do Cost Bonds Work?
By purchasing this bond, you enter a three-party contract between a principal, obligee and surety:
- Obligee: The entity requiring the bond, usually the court
- Principal: You, the plaintiff
- Surety: The company issuing the bond
If you, as the plaintiff, lose the case and fail to pay the court fees you owe to the defendant, the harmed defendant can file a claim on the bond. The surety will pay valid claims, but you are ultimately responsible for reimbursing the surety.
How to Get a Cost Bond
To get your cost bond, complete the following steps:
- Apply online (include your obligee’s name and address, case number, and defendant’s name)
- Get a quote within one business day
- Buy online or over the phone
- Get your physical bond form in the mail within two business days
- File the signed bond form with your obligee
Our friendly experts are here to help with your bonding process. Don’t hesitate to call 1 (800) 308-4358 or email [email protected] with any questions.
How Do I Renew My Cost Bond?
Your cost bond will expire annually. A SuretyBonds.com representative will contact you before your term ends with renewal instructions. These bonds remain active until you are officially released of your obligation by the court. For more specific instructions visit our Surety Bond Renewal Guide.
How Do I Update My Cost Bond Form?
To update your active SuretyBonds.com cost bond form, email [email protected] outlining the necessary changes and one of our friendly representatives will be happy to help.
