Auctioneer Bond
Do you have the vocal chops and eye for detail it takes to become an auctioneer? If so, you may need something else before starting your career – an auctioneer bond. Many states require aspiring auctioneers to obtain a surety bond before they are allowed to obtain a professional license and work legally. Keep reading to learn how auctioneer surety bonds work.
What is an Auctioneer Bond?
An auctioneer bond is a legally binding agreement between three parties:
- Principal – The auctioneer that must obtain the bond. The principal accepts financial liability for any claims filed against the bond.
- Obligee – The state agency that licenses and regulates auctioneers. The obligee determines the bond requirements and has the right to file claims for damages against the bond.
- Surety – The company that issues and underwrites the bond. If the obligee files a valid claim that the principal can't or won't pay, the surety agrees to pay the obligee in full. Afterward, however, the principal must pay back the settlement amount with interest and fees added.
This surety bond type creates a strong incentive for auctioneers to follow all applicable state laws and codes of conduct by making them accountable for any damages that result from misconduct. Auctioneer surety bonds also guarantee that anyone harmed by an auctioneer can seek and receive justice in the form of restitution. By creating surety bond requirements for auctioneers, states help to promote honest, upstanding behavior within the auction industry.
How Does an Auctioneer Bond Work?
If an auctioneer violates state laws, the state agency that regulates the auctioneer has the right to file a claim against the bond for compensation equal to the damages caused. The surety that backs the bond will then launch an investigation to confirm the validity of the claim. Provided that everything checks out, the surety guarantees the obligee a full settlement for the claim without further delay.
After paying, the surety will shift their focus to the principal (the bondholder) who has liability for the claim under the bond agreement. If the principal does not repay the surety the debt owed, it could lead to a lawsuit or having the debt sent to collections. Failure to repay the surety will also terminate bond coverage.
Who Needs to Obtain an Auctioneer Bond?
Anyone who plans to work as a professional auctioneer, either independently or within an auction house, in one of the following states should plan to obtain an auctioneer bond.
- Alabama
- California
- Louisiana
- Massachusetts
- Mississippi
- New Hampshire
- New York
- Ohio
- Pennsylvania
- Virginia
- Washington
Having proof of bond coverage is a prerequisite for obtaining an auctioneer's license in these states. It's also illegal and subject to strict penalties to perform auctions without either a license or a bond. Since so much depends on getting a surety bond, it's important to meet these requirements quickly. Count on Viking Bond Service to speed up and simplify the bonding process for auctioneers in all these states.
How to Get an Auctioneer Bond?
The application process for an auctioneer bond works like this:
- Complete a standard bond application
- Submit to a credit check
- Provide additional documents the surety asks for
- Receive a quote for the bond cost
- Pay the premium to activate coverage
- Show the obligee the document proving bond coverage
How Much Does an Auctioneer Bond Cost?
States decide how large, in dollars, an auctioneer bond must be. The cost will be a small percentage of that amount, often under 10%. The exact cost of a surety bond depends on the credit standing of the bond seeker. Great credit leads to lower premiums, but bad credit raises premiums and may make it harder to get approved for a bond. Thankfully, that doesn't always have to be the case thanks to Viking Bond Service's Bad Credit Surety Bond Program.
Do Auctioneer Bonds Require Renewal?
Most auctioneer's bonds have a 12-month term, after which coverage expires. Someone must have bond coverage for as long as they have a professional auctioneer's license, and lapses in bond coverage can jeopardize the license status. Therefore, it's crucial to renew bond coverage on time. The surety will provide a reminder. The actual renewal process will involve another credit check, which the surety will use to adjust premium prices up or down based on credit changes.
Viking Bond Service – Your Source for Auctioneer Bonds
Don't let bonds be an obstacle. Rely on Viking Bond Service to make getting a surety bond easy and accessible for more people. We are the long-term bond partner for auctioneers across the country, and we aim to inspire the same confidence in everyone we serve. Request a quote or contact us with questions. Speak to a bond expert by calling 1-888-2-SURETY (1-888-278-7389).
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