Appeal bonds play a crucial role in the legal system, providing financial security for appellants and appellees. Understanding the purpose, cost, application process, and implications of these bonds will better equip you to navigate the appeals process.
What is an appeal bond?
An appeal bond, also known as a supersedeas bond, is a type of court bond required when an appellant appeals a judgment.
- An appeal is a legal process that involves challenging a previous legal determination. A higher court is asked to review a judgment made by a lower court (Cornell Law School).
- An appellant is “the party who appeals a lower court’s judgment or order to a higher court.”
- An appellee is “the party against whom the appeal is filed.”
An appeal bond guarantees that if the appellant loses the appeal, the surety company will pay the judgment amount to the winning party (the appellee). The bond contract ensures that the appealing party will fulfill their financial obligations.
We describe this process in greater depth on our Supersedeas Bonds page.
How much does an appeal bond cost?
The cost of an appeal bond can vary depending on several factors, including the following:
- Type of case
- Amount of the judgment being appealed
- The appellant’s financial history
In general, the cost of an appeal bond is a percentage of the judgment amount, typically 1% to 10%. You may qualify for a lower bond premium rate with a high credit score.
Bond + Collateral
Your surety provider will likely require you to put up collateral in the total amount of your bond. This could be in cash, real property, or personal property. You must pay annual premiums for your appeal bond until the appeal is fully resolved. The bond is non-refundable.
How do appeal bonds work?
When an appellant files an appeal, they must obtain an appeal bond from a licensed surety provider. The bond functions as insurance for the appellee, ensuring they will receive compensation if the appellant loses the appeal.
If the appellant fails to fulfill their financial obligations, the bond company will step in and cover the costs up to the full bond amount. Then the surety will seek reimbursement from the appellant.
When do I need an appeal bond?
You will need an appeal bond if you appeal a judgment in court. The court will require you to post a bond before they will hear your appeal.
Winning vs. Losing Appeals: What happens?
If you win your appeal, the bond is discharged, and you won’t have any further financial obligations toward the bond. However, if you lose the appeal, the bond company will pay the damages, costs, and losses incurred by the opposing party up to the bond amount. You (the appellant) are responsible for reimbursing the bond company for the expenses covered.
How is an appeal bond underwritten?
When you apply for an appeal bond, the surety will evaluate your financial history and creditworthiness to assess the level of risk involved. They will also consider the amount of the judgment and the likelihood of you winning your appeal. This process, known as underwriting, helps determine the premium you’ll pay for the bond.
What can I use for collateral?
To secure an appeal bond, you may need to provide collateral. Collateral options can include cash, letters of credit, real estate, or securities. Your surety provider will outline the specific collateral requirements based on your circumstances.
- Cash: Cash collateral refers to providing the full bond amount in cash. It is the most straightforward and common form of collateral.
- Letters of credit: A letter of credit is a document issued by a bank that guarantees payment to the bond provider if the appellant fails to fulfill their obligations. It acts as a form of assurance for the bond amount.
- Real estate: Real estate collateral involves using property, such as a home or commercial building, as security for the bond. The value of the property determines the collateral’s strength.
- Securities: Securities collateral involves using stocks, bonds, or other marketable securities as collateral for the bond. The value of the securities serves as a guarantee for the bond amount.
How to Apply for an Appeal Bond
You’ll need to find a reputable surety bond provider to apply for an appeal bond. They will guide you through the application process, which involves completing an application form, providing necessary documentation, and paying a premium.
Remember to start the application process as early as possible to allow sufficient time for underwriting and any potential additional requirements.
How long does it take to get my bond?
The time it takes to obtain an appeal bond can vary depending on the complexity of the case, the jurisdiction, and the responsiveness of all parties involved. It can take anywhere from 24 hours to a few days. Starting the application process as early as possible is advisable to avoid delays.
Apply for Your Supersedeas Bond Today
To obtain this bond, simply apply and pay online. ZipBonds offers the fastest and most secure option for getting the surety bonds you need. Our all-digital platform is intuitive and straightforward. Apply on our website or call us at 888-435-4191 to speak with an agent.