Surety Bond Professionals is a family-owned and operated bonding agency with over 30 years of experience. With access to a broad range of surety markets, our expert agents are ready to assist with all of your California auctioneer bond needs.
What Are They?
California auctioneer bonds are a type of license and permit bond intended to protect the state of California and consumers. Specifically, the bond serves as an auctioneer’s guarantee to conduct auctions or operate an auction company in accordance with the rules established in California’s Civil Code, Division 3, Part 4, Title 2.95.
In the event that a consumer suffers a financial loss because of an auctioneer’s unlawful or unethical action, the bond protects the California Secretary of State against liability for having issued a license to that auctioneer. A California auctioneer bond also ensures that funds will be available to compensate the injured party.
Who Needs Them?
Anyone applying for a new California auctioneer license from the Secretary of State or renewing an existing license must purchase a $20,000 California auctioneer bond. This requirement applies to independent, individual auctioneers and the owners of auction companies.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
An auctioneer surety bond agreement is a legally binding contract among three parties:
- The California Secretary of State, as the party requiring the auctioneer bond, is the “obligee.”
- The auctioneer required to purchase the bond is the “principal.”
- The surety company underwriting and issuing the bond is referred to as the “surety.”
Suppose that an auctioneer violates one or more of the rules and regulations governing the conduct of auctions in California. For example, they could do this by mishandling auction items, misappropriating payments received from auction customers, conducting false advertising, or misrepresenting auction items. It’s not hard to imagine a customer suffering a financial loss as a result of such actions. The injured party can file a claim against the auctioneer bond, and if the surety finds the claim to be valid, be compensated for the loss.
It’s not widely understood that in issuing an auctioneer bond, the surety is establishing a line of credit for the principal. That line of credit will be tapped by the surety to pay any valid claim, up to the full required amount of the bond.
While the surety will pay the claim upfront, that payment is made on behalf of the principal, and the principal is legally obligated to repay the surety for the credit advanced in paying the claim.
What Do They Cost?
The annual premium for a California auctioneer bond is a small percentage of the required $20,000 bond amount. That percentage, the premium rate, varies depending on the principal’s personal credit score and company financial strength. The premium rate can be as low as 1% for someone with an excellent credit score or as high as 3-5% for someone with a lower credit score.
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You can count on our surety bond professionals to get you the California auctioneer bond you need at a competitive rate.