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An auctioneer bond or auction bond is a form of guarantee that future auctioneers will comply with state regulations applying to the industry. It is a requirement for receiving an auctioneering business license, which means an individual or a business needs to obtain it for legal work performance. Bonded and licensed auctioneers guarantee ethical and honest performance to the public and the state.
Like with other surety bond types, an auctioneer bond has three parties involved in the agreement: the principal (the auctioneer), the obligee (the government), and the surety (a company that issues the bond). The principal purchases the bond from the surety, which takes over the responsibility to compensate losses in case of agreement failures. If the principal fails to comply with the agreement, the surety covers all the expenses.
Depending on local regulations, there might be some differences between the auctioneer bond types. Some bonds are specifically required from individuals or auction companies, and others cover different businesses, which means they depend on the thing you’re auctioning.
The main goal of an auctioneer surety bond is public protection from frauds, false advertising, misrepresentation, and other illegal acts. If any of this happens, the public has the right to file a claim against the auctioneer and recover any financial losses.
Auctioneer bond price mostly depends on the amount of the auctioneer bond in a particular state. The government sets the price for auctioneer bonds, and the surety issues the contract for a percentage of that amount. Further on, the percentage is determined by sureties themselves and can vary a little.
Auctioneer bond cost ranges from $2,000 to $50,000 depending on the local state regulations. The surety takes between 1% and 5% of this amount for providing the bond. In other words, the principals pay the premium for obtaining the bond, and its rate depends on the credit score and financial stability of the client. Those who have low credit scores might be charged even more because the surety can’t be sure they can repay the debt.
An auctioneer bond is required by local governments. Auctioneers need to obtain this surety bond for performing the work within the industry and getting the business license. An auctioneer bond is typically requested by the Licensing Board, the Secretary of State, or other similar authorities.
However, not all states require an auctioneer bond. Many auctioneers don’t need to get bonded to perform their work. To find out whether you need an auctioneer bond or not, consult your local licensing board. It will have all the necessary information and advise you accordingly.
Bonding Solutions is a leading, national surety agency specializing in Auctioneer Bonds. Contact our team by calling (877) 841-6745 or by filling out our quick online application by pressing the button below. Bonding Solutions can get you fast approval and affordable rates for your auctioneer bond today!
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