What is an Auctioneer Bond?
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 behaviour. 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.
Questions about Auctioneer Bonds in Michigan
How much does an auctioneer bond cost in Michigan?
Auctioneer bond cost depends on the amount of the auctioneer bond in each state. Bond cost is a fraction of that amount, and is determined by sureties on an individual basis.
Bond amounts for these bonds range between $2,000 and $50,000, depending on the state and its regulations.
When determining your rate, also known as your surety bond premium, your surety will take into account a number of financial indicators of your financial stability. The most important among these is your personal credit score, but your financial statements and industry experience are typically also considered.
Depending on these factors, your surety will offer you a rate of between 1%-5% if you have a perfect or high credit score, a so-called standard market rate. For those applicants whose credit score is lower, sureties typically offer rates between 5%-10% of the total bond amount.
To get a free, no-obligations quote on your bond, simply submit your surety bond application.
Can I get an auctioneer bond with bad credit?
Credit problems shouldn’t be an obstacle when applying to obtain an auction bond. Although bad credit applicants may get turned down elsewhere, Lance Surety Bonds’ Bad Credit Surety Bonds program enables them to get bonded without trouble.
Lance Surety Bonds works with a number of highly-respected and reliable surety partners, all of which are A-rated and T-listed companies. This allows us to locate the best bonds and lowest rates for all of our clients, regardless of credit type.
How to get your auctioneer bond in Michigan
Apply online through our easy-to-use application tool and submit your application within a minute. Approval times for these bonds are short, and you will soon receive your free bond quote.
Call us at (877)-514-5146 if you would like to know more about bonding requirements in a particular state. We have plenty of experience in issuing these bonds, and our surety bond experts can respond to all your questions.
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