Public Official Surety Bond
What is Public Official Bond?
A Public official bond is a type of surety bond that guarantees that an elected government official in certain position will comply with the governmental rules and regulations. These type of bonds and mostly needed by public officials that handles public funds.
Especially when it comes to those officials that deal with money or privileged information. The purpose behind a public official bond is to ensure the public will be reimbursed if the official does not faithfully perform the duties of the office.
A number of different public official bond types are available, depending on the requirements of specific state or local laws. It’s most common to require public official bonds for those serving as court clerks, commissioners, notary publics, deputies, sheriffs, other law enforcement offices, tax collection personnel, city managers, treasurers, judges, mayors, or other types of city officials.
Public official bonds pay a claim if the official creates a financial loss to the government. Generally, the public official must faithfully perform the duties of the office, handle public funds appropriately, and turn over all property and records when they leave the office. In the event that a public official commits any of these violations, injured parties can claim for damages against a public official bond up to the value of the bond.
How much Does a Public Official Bond Cost?
There are a number of factors that go into the cost of a public official bond. In many cases, the state or local government itself pays for the bond, as this provides a measure of protection against the government being held directly responsible for the actions of a public official. However, it’s noteworthy that while bonds may be paid by the state, the bonded public official often needs to compensate the issuing surety if claims are made against their bond. The public official bond indemnifies the government, but the official then indemnifies the surety.
When it comes to the actual cost paid by the state or local government, the public official’s position, the associated risk, and the official’s personal credit score all are taken into account. The total amount paid on a bond in order to purchase coverage is typically between 1 percent and 4 percent of its total value, based on those factors.