FOR ALL YOUR SURETY BOND NEEDS.
California legally requires a variety of individuals, contractors, and organizations to secure surety bonds to conduct business across the public service industry. Apply for a California Surety Bond today! Single Source Insurance is a leading California bonding company providing bonds with a convenient online application system. Browse the most common types of bonds in this state, or contact us for a full list.
While some states require auctioneers and auction companies to purchase an auctioneer bond to obtain a license to operate within the state, this is not the case in California, which does not license auctioneers or auction companies. However, the California Secretary of State still requires the purchase of a California auctioneer bond as a condition for conducting auctions anywhere in the state.
The purpose of a California auctioneer bond is to protect the state and consumers from financial loss resulting from the unlawful or unethical business practices of auctioneers and auction companies. If you�re in the auction business and fail to comply with the relevant sections of the Civil Code of the State of California, an injured party suffering financial harm can file a claim for compensation against your auctioneer bond.
Both auction companies and individual auctioneers doing business in California are subject to the auctioneer bond requirement. All California auctioneer bonds must be in the amount of $20,000�the �penal sum� the auctioneer is obligated to provide for the payment of valid claims against the bond.
There are three parties to a California auctioneer bond agreement, which is a legally binding contract:
The terms of the surety bond agreement identify the conduct auctioneers must maintain in order to prevent incurring claims�specifically complying with designated, relevant sections of the Civil Code of the State of California. The most common violations include:
When the principal commits such a violation, anyone who experiences a financial loss as a result of that violation can file a claim against the principal�s California auctioneer bond. The surety will first investigate to make sure the claim is valid and will then attempt to negotiate a mutually agreeable settlement.
If no settlement can be reached, the surety will go ahead and pay the claim. That�s common with most types of surety bonds. They function as a line of credit that is drawn down by the dollar amount paid out on claims. The principal subsequently reimburses the surety in the form of installment payments over a given period of time. Repayment is not optional, as the principal, by law, bears sole responsibility for claims payment.
Surety bonds are sold on a premium basis, with a premium that is only a small percentage of the required bond amount�$20,000 in this case. The specific percentage is set by the surety for each bond applicant, based largely on the principal�s personal credit score and financial stability. The surety�s main concern, of course, is the relative ease or difficulty of getting reimbursed by the principal, and credit history is a good indicator of that. A principal with excellent credit could pay a premium rate as low as 1%, which works out to be an annual premium of $200.� Someone with poor credit could pay a premium rate as high as 10% or more.
Get a convenient online quote today, or call to speak with one of our surety bond experts about getting the auctioneer bond you�ll need in order to conduct auctions in California.
