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 New Jersey supersedeas bond needs.
What Are They?
Supersedeas bonds, also known as appeal bonds, are a type of surety bond commonly required by New Jersey courts in certain civil cases involving contested property or large damage awards. A supersedeas bond ensures that a party appealing the decision of a lower court will abide by that original decision if the appeal is unsuccessful and has the financial resources to do so.
Supersedeas bonds also help prevent frivolous appeals intended only to delay enforcement of the original court decision. Appeals are only granted when there are legitimate grounds to challenge the original court decision—namely a procedural error that raises questions about the fairness of the decision. Appeals are not granted for the purpose of presenting additional evidence or challenging the truthfulness of a witness.
Who Needs Them?
In many states, anyone filing an appeal of a court decision must first purchase a supersedeas bond that will remain in force until the appeal has been decided. In New Jersey, however, a supersedeas bond is required only if the appellant wants to stay (or postpone) the execution of the original judgment until the appeal has been decided.
Speak with a Surety Bond Professionals agent today to discuss your bonding needs.
How Do They Work?
The surety bond agreement for a supersedeas bond is a legally binding contract among three parties:
- The court requiring the supersedeas bond is the “obligee.”
- The appellant required to purchase the bond is the “principal.”
- And the surety company underwriting and issuing the bond is the “surety.”
If the principal loses the appeal, the surety will go ahead and pay the amount required by the original court decision, plus any court costs and legal fees for which the principal is held responsible.
Because most appeals are unsuccessful, surety bond companies regard supersedeas bonds as risky and often require them to be fully collateralized. In full collateral cases, 100% collateral is almost always the requirement, although occasionally the surety might require more than this. This ensures that there is enough money available to cover those additional court costs and legal fees as well as any interest due on the original damage award.
What Do They Cost?
The premium cost of a surety bond is calculated as a certain small percentage of the required bond amount. With most other types of surety bonds, that percentage—the premium rate—is determined by the surety based largely on the principal’s personal credit score. That’s because claims are paid by the surety and repaid to the surety by the principal.
That is not the case with fully collateralized supersedeas bonds, because no repayment of the surety is involved when claims are paid using the collateral. Additionally, the full collateral provides less risk to the surety, and as a result the bond rate may be closer to 1-2%. Larger bonds will likely fall on the lower end of this range.
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You can count on our experienced surety bond team to get you the New Jersey supersedeas bond you need with the most competitive terms.