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Injunction Surety Bond

When courts issue an injunction, it places a serious strain on the person living under the order. Therefore, the person requesting the injunction often needs to secure a bond before the court grants their request. If you're either party in this situation, read on to learn how injunction bonds affect you both.

What is an Injunction Bond?

If a judge grants an injunction before the hearing begins and then later finds the injunction to be unnecessary, bonds provide a way for the defendant to seek financial compensation. The defendant may file a claim for financial compensation against the plaintiff's bond. Courts require these bonds so that people unjustifiably harmed by injunctions can seek justice and hold the plaintiff accountable. Because of that accountability, bonds discourage plaintiffs from seeking injunctions without good reason.

Do you need collateral for an Injunction Surety Bond?

Surety companies consider injunction bonds "high-risk" and often ask clients seeking these bonds to secure it with some type of collateral, usually for the full bond penalty amount. Generally, acceptable forms of collateral include cash or cash equivalents such as an Irrevocable Letter of credit. In rare instances, real property can also be used as collateral. Collateral is held until the case has reached a final verdict. If the verdict is in favor of bonded party, the collateral is returned to them upon release of the bond by the court. If the verdict is in favor or the other party the bonded party has the opportunity to satisfy the financial responsibility on their own, in which case they will still get their collateral back. If they do not satisfy the financial responsibility, the bond can be claimed against. In this scenario, the collateral is forfeit and can be used to pay any claims against the bond.

Who should get an Injunction Bond?

The courts decide if and when bonds are necessary and will inform the plaintiff before the injunction hearing is allowed to proceed. Since the entire process hinges on securing a bond, plaintiffs typically don't wait to secure one. In fact, the window to file the injunction can close without a bond. Get one quickly, even today, by working with Viking Bond Service.

Who are the parties involved in an Injunction Surety Bond?

Even though injunctions involve two parties, the bonds involve three:

• Principal - The bonded party, usually the plaintiff in the litigation.
• Obligee - The bond beneficiary, usually the defendant in the litigation, and the person placed under the injunction.
• Surety - The bond company that provides the guarantee on the bond and is financially responsible for settling a claim on the bond if the situation arises.

How much does an Injunction Surety Bond cost?

The courts determine the injunction bond amount based on the costs and damages defendants may be subjected to. Premiums for these bonds typically amount to 1-3% of the required bond amount. As long as the principal avoids having claims filed against the bond (by compensating the defendants preemptively if the case isn't won) the premium is the only cost.

How are claims handled for Injunction Surety Bond?

Upon losing an injunction hearing, the plaintiff has the opportunity to directly compensate the defendant, but if they are unable or unwilling, the defendant can file a claim against the bond. After validating the claim, the surety will be required to compensate the obligee up to the the amount of the bond. The collateral, if required to obtain the bond, can be used by the surety to pay the claim or recover funds expended resolving the claim.

How to apply for an Injunction Bond?

Applying for a preliminary injunction bond or any out sort of injunction bond involves a few simple steps. Complete a standard bond application with information about your personal and professional background; turn over court documents related to the case and bond requirement; fill out a collateral agreement and supply any other documentation required by the surety. At Viking Bond Service, expect a quote within 24 hours of receipt of your completed bond application.

Viking Bond Service - A Leader in Court Bonds

The courts take the bonding process seriously. Make sure you do too by working with Viking Bond Service. Connect with our team of judicial bond experts by completing the contact form on this page or by calling 888-278-7389.