Auctioneer Bonds

License, Permit & Miscellaneous Guarantee Bonds

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AUCTIONEER BOND OVERVIEW:

The auctioneer surety bond is a type of bond which local governments request of individuals, as a requirement for receiving their auctioneering business license.

In many states, future auctioneers are required to post this bond during their licensing process. This bond is typically requested by the local Licensing Board, the Secretary of State, or another similar institution.

An auctioneer bond, also called an auction bond, is a form of guarantee that licensed and bonded auctioneers will comply with state regulations pertaining to their business. It guarantees the ethical and honest performance of their duties, such as accounting for all payments they receive.

The auctioneer bond protects the public from auctioneer fraud, false advertising, misrepresentation, or mishandling of items, and any other type of illegal behavior. It provides customers with the right to file a claim if the auctioneer is found to have caused them any financial damage.

The auctioneer bond is an agreement between three parties, like all other bonds: the principal (the auctioneer), the obligee (the public and the government institution requesting the bond), and the surety bond company that backs the bond financially.

Whenever an auctioneer is found to be in breach of their obligations, consumers can file a claim against their bond and receive compensation by the surety within the maximum penal sum of the bond. An auctioneer who faces a legitimate claim against their bond must compensate their surety in return for any financial backing they have extended to the claimant on the auctioneer’s behalf.

Low Rates Based on Credit

Usually Issued Regardless of Credit

Bond Usually Available Regardless of Credit

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Application: Call underwriter for appropriate application at 1-818-715-7133

FAQs About Auctioneer Bonds

We want you to feel comfortable working with our surety bond company and realize you may still have questions. Our FAQ section below will help you understand more about our business and what we do. Let’s learn more!

What Are Auctioneer Surety Bonds?

Auctioneer bonds are bonds individuals use as a requirement for getting their auctioneer’s business license. Many states require it. 

Though some insurance products work differently, an auctioneer surety bond protects the third party (a consumer at an auction) from those who might violate the law. When the auctioneer bonding company sees a loss because of an auctioneer’s actions, the auctioneer has to repay the auctioneer bond company for the losses.

Who Is an Auctioneer?

Most states require auctioneers to have a license or auctioneer surety bond before they can call auctions. Though the definitions of an auctioneer vary, the general rule is that any individuals who sell things to the highest bidder during an auction must have an auctioneer bond.

There are exceptions that prove the rule, such as:

  • People selling their own property
  • Government officials who act in their official capacity
  • Administrators and executors of estates
  • Nonprofit and charitable organizations
What Does the Auctioneer Bond Cost?

Depending on where the auctioneer is located, the auction surety bond can be a fixed rate or a percentage of the total bond amount. Auctioneer bonds are usually low-risk, so companies won’t run credit checks before they issue one. However, they can check this to determine pricing and eligibility.

Every state can be different, so the auctioneer bond cost varies.

When Are Auctioneer Bonds Required?

Is a surety bond required, and when? Typically, independent auctioneers working in auction houses must obtain an auctioneer bond in these states:

  • Washington
  • Virginia
  • Pennsylvania
  • Ohio
  • New York
  • New Hampshire
  • Mississippi
  • Massachusetts
  • Louisiana
  • California
  • Alabama

Those states also require auctioneer bonds before the licensing process starts.

How Does the Auctioneer File the Auctioneer Surety Bond?

Typically, surety bond companies give the auctioneer a completed bond form so that the relevant agency can fill it out. Usually, states require the seal from the company that issues the bond. Auctioneers must include this information:

  • Power of Attorney
  • Bond amount
  • Effective date of the auctioneer bond
  • Name of the license type and obligee
  • State of incorporation and surety company name
  • Legal name of the person buying the auctioneer bond
What Should Auctioneers Do to Avoid Any Claims on the Auctioneer Bond?

If an auctioneer is required to obtain an auctioneer bond, they must adhere to the state and local regulations pertaining to the job. Here are some best practices:

  • Adhere to consumer contracts.
  • Don’t engage in acts of fraud, such as false bidding.
  • Pay taxes, fines, and fees on time.
  • Maintain a record of all transactions.
  • Create written contracts for the items sold.
  • Provide the goods paid for.
How Does an Auctioneer Bond Work?

The auctioneer bond is legally binding, and there are three parties:

  • Surety – This is the company issuing and underwriting the auction bond.
  • Obligee – They determine the bond requirements needed and can file claims against the auctioneer bond.
  • Principal – This is the person who is bonded (auctioneer). They typically work at auction companies, but it could be called an auction house.

If the state or obligee files a valid claim, and the principal (auctioneer) won’t or can’t pay, the surety will pay off the auctioneer bond claim up to the full value. However, there are usually interest and other fees involved.

Typically, the auctioneer bond cost offsets the surety company’s need to pay if the bonded person doesn’t pay out.

Overall, the auctioneer bond is an incentive for auctioneers to follow the codes of conduct and rules in their state. Otherwise, they’re financially responsible for the damages they cause. Likewise, an auctioneer bond guarantees that those injured by the auctioneer can get justice (monetary restitution).

Why Should I Work with S. Philips Surety & Insurance Services, Inc?

You can rely on our service, and we make the process for getting an auctioneer bond easy. Auction professionals must understand the state regulations pertaining to what they do, and we can help them get an auctioneer bond when needed.

Could I Get an Auctioneer Bond If I Have Bad Credit?

Typically, credit score problems aren’t an obstacle when obtaining an auction bond. While bad credit applicants can get turned down, we will determine each person’s financial stability and potential financial losses. This means you get the best service possible.

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