What Is a California Auctioneer Bond?
Auctioneers across the U.S. need an auctioneer bond as a part of their state licensing process. If you want to run an auction company in California, you will have to get a California auctioneer bond.
The bond is required by the California Secretary of State. Its purpose is to guarantee that California auctioneers will follow the rules set forth in the Civil Code of the State of California, Division 3, Part 4, Title 2.95. If your company fails to abide by the law and your customers are affected by this, you can face a bond claim to compensate them.
Your California auctioneer bond functions like almost all other surety bonds do. It constitutes a three-party contract. The principal is your auction company. The Secretary of State is the obligee that demands the bond. The surety is the third party which underwrites the bond.
Questions about Auctioneer Bonds in California
Who needs to obtain a California auctioneer bond?
Any company that would like to perform auctioning as its main activity in California will need to get a California auctioneer license from the Secretary of State. All auctioneers have to post a surety bond as a part of this process.
The bond protects auctioning companies’ customers from fraudulent activities on the part of auctioneers. Some examples include failing to account for all payments received, not adhering to ethical standards in their operations, false advertising, mishandling of items or funds, or any other type of fraud.
How much does a California auctioneer bond cost?
The surety bond price on your auctioneer bond depends on the bond amount you are required to provide. In the case of California, the bond is set at $20,000.
You need to pay only a fraction of this bond amount. This is referred to as the bond premium. In a typical case, the premium is between 1% and 5% of the amount.
How is your California auctioneer bond cost set? You’ll need to provide your surety with a number of business and financial documents that showcase your financial strength. The surety examines your personal credit score, company finances, and assets and liquidity. The bond price is determined on the basis of the risk involved in underwriting your bond.
For a full overview of how your bond price is calculated, you can check our surety bond cost page.
|Bond Type||Surety Bond Amount||Credit Sore|
|Above 700||Between 650-699||Between 600-649||Below 599|
|California Auctioneer Bond||$20,000||$200-$300||$300-$500||$500-$1,000||$1,000-$1,000|
Can I get bonded with bad credit?
Lance Surety Bonds offers their Bad Credit Surety Bonds program to help auctioneer applicants with credit issues to obtain the bonds they need. If you have a low credit score, tax liens, bankruptcies, or civil judgements, this program may be the right choice for you.
The usual bonding rates are in the range of 5%-10%. This higher percentage is required in order to compensate for the increased bonding risk. However, we can guarantee you a top price whatever your credit score is. We work with a number of A-rated, T-listed surety companies, which means we can select the best option for your situation.
How do I apply for a California auctioneer bond?
Apply online today for a free California auctioneer bond quote, delivered to you straight away. After you submit your full application with a complete set of documents, you’ll receive your exact bond cost.
Our How to Get Bonded page is an excellent resource on the bonding process in case you need more insight.
We’re always here to help. Just call us at (877) 514-5146 and Lance Surety Bonds’ specialists will answer your questions.
What happens in case of a claim against me?
The auctioneer bond is not insurance for your company. It’s there to protect the state and your customers from potential fraudulent activities on your side. It’s crucial to understand how bonding works, so you don’t end up in a problematic situation.
If you don’t abide by the rules agreed on in the bond language, you can end up with a claim against your bond. These cases can occur if you don’t stick to the rules set in the California Civil Code, or if you engage in fraud and misrepresentation. An affected party can then require compensation.
Proven claims mean that you have to reimburse the claimant up to the penal sum of your bond. At first, it’s your surety that takes care of this. Soon after, you need to repay it completely. Since this is the way bonding works, it’s important to avoid claims to safeguard your finances and company reputation.