What is an Appeal Bond?
An appeal bond is used to challenge a court’s decision. These surety bonds can be required of a plaintiff or defendant. Appeal bonds provide a financial guarantee for court judgments should your appeal not be successful. These bonds are commonly called supersedeas, appellate, or court bonds.
Why do I need an Appeal Bond?
You or your company needs an appeal bond because you are trying to reverse a court’s decision. Appeal bonds are required by many courts to ensure a monetary or other judgment is secured during the appeals process. Generally, the bonds provide for accrued interest and the actual judgement amount although bond forms vary.
How much does an Appeal Bond cost?
Your appeal bond cost depends on a few things but primarily on you and/or your company’s financial well being. These bonds are very risky as they are considered true payment guarantees. They often require collateral in the form of cash or letter of credit. Additionally, the merits of the case are not considered when underwriting these bonds. You can expect to pay about 1-2% of the surety bond amount needed. For example: A $1,000,000 appeal bond should cost in between $10,000 and $20,000 annually.
My appeal is sure to win. Why do I need collateral?
Again, appeal and supersedeas bonds are not underwritten on the merits of your case. The only factor a surety company will consider is your ability to pay the judgment should the appellate proceedings not benefit you or your company.
What types of collateral will a surety accept?
Surety companies generally require two types of collateral. The first, and most obvious, type is cash. Cash can be wired directly to the surety company and will be held in trust until the outcome of your case is determined. This method allows for quick bond placement when time is of the essence.
The second form of collateral is an irrevocable letter of credit (ILOC). These are issued by your bank, on the surety company’s form, and are payable on demand to the surety company. The ILOC method is used by companies who do not want to post cash. However, many banks require dollar-for-dollar cash in your bank account to issue them.
Most surety companies will not accept a home or land as collateral. However, in the strongest of cases, they may accept it.
How do I apply for an Appeal Bond?
- Complete our online Appeal Bond application, or
- Download and complete our printable Appeal Bond application, and
- Receive your surety bond quote in minutes!