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Supersedeas bonds are a type of court bond required in civil matters that end up in an appellate court. The Latin word �supersedeas� means �you shall desist.� Hence, purchasing a supersedeas bond will delay the execution of a judgment while a case is under appeal. That judgment can be for a monetary award or the return of contested property. The bond serves as the appellant�s guarantee to honor the judgment if the appeal is unsuccessful.
An Arizona supersedeas bond serves two main purposes. Having to purchase one and put up the necessary collateral discourages frivolous appeals or appeals intended only to delay the execution of a judgment. A supersedeas bond also ensures that funds will be available to pay the judgment if the court rules against the appellant.
Arizona supersedeas bonds are often referred to as �appeal bonds� or �defendant�s bonds,� because they are required only when a court rules against a defendant, and the defendant files an appeal. No appeal of a judgment can be filed in an Arizona court without meeting this bonding requirement.
There are three parties to a supersedeas surety bond agreement:
The agreement is a legally binding contract that spells out the obligations of each party.
Relatively few appeals are successful, which makes underwriting a supersedeas bond potentially risky for surety bond companies. Consequently, supersedeas bonds must be fully collateralized for 100% of the original judgment amount. It must also cover court costs and the interest that would be earned on the judgment amount from the time the appeal is filed until the court renders its decision.
If the court dismisses the appeal or rules against the principal, the original judgment becomes payable. Unless the principal makes good on the original judgment within a given period of time, a claim can be filed against the Arizona supersedeas bond, and the collateral can be used to pay it.
In addition to putting up collateral for 100% or more of the required bond amount, the principal will pay a surety bond premium that is a small percentage of the required bond amount. Exactly what the percentage, the premium rate, will be depends largely on the principal�s personal credit score and financial strength.
Anyone applying for an Arizona supersedeas bond must have good credit and be able to meet the collateralization requirement, which is a major deterrent to filing appeals that are unlikely to succeed. Bear in mind that the surety will want to see a copy of the original judgment.
Request a convenient online quote today, or discuss your Arizona supersedeas bond needs with one of our experienced surety bond specialists.
