If you serve in a public office, you may be required to purchase a public official bond. Therefore, there are a few things you need to know about these types of bonds.
What Are They?
If you are looking for public official bonds, you need to search for surety bonds. Surety bonds are three-party bonds. As a public official, you are considered the principal. You purchase the bond, which guarantees that you will follow the law to fulfill your obligations. The surety is the agency or company that provides the bond. Finally, your state, county or city is the obligee because these institutions require that you purchase the bond. If you default on your duties, the obligee is protected.
Who Needs a Bond?
Public official surety bonds are typically purchased by anyone serving as a government employee or official. Therefore, if you are a clerk of court, tax collector, town or city manager, sheriff or sheriff’s deputy, judge, mayor or homeowners’ association leader you may be required to purchase a surety. Notary publics should also be bonded. These bonds are legal contracts, so all parties are held legally responsible for their fulfillment.
What do They Cost?
Surety bonds have a low cost, for the most part, but this cost varies. For example, the city, state or county may have specific requirements. In addition, your application information and credit score will affect the bond rate. Most often, a minimum score of 650 is required. Finally, the bonding company will evaluate the risk associated with your position and adjust your rate accordingly. In most cases, the bond fee is 1-4% of the total bond amount.
As a public official, you want to protect your personal assets in the case of a lawsuit or other legal challenge. The best way to do this is to purchase a public official surety bond. However, don’t purchase a bond from the first company you find. Do your research and choose the company with the most experience and best reputation.
