Injunction Bonds

Injunction bonds are court bonds that plaintiffs must obtain before the court will grant them an injunction. In these types of cases, the plaintiff’s goal is to prevent the defendant from carrying out a specific action. The bond protects the defendant if the court determines that the plaintiff should never have been issued an injunction in the first place. If the defendant suffers damages as a result, they can file a claim on the bond.

This bond can go by other names, such as a plaintiff’s bond or a restraining or temporary restraining order bond.

An injunction bond ensures that a plaintiff pays any court fees, damages, or other related costs associated with an injunction they should never have been granted. It protects the defendant in the case from damages that can result from an unnecessary injunction. Fighting an injunction can be costly. A bond can help a defendant recover.

In short, the purpose of an injunction bond is to prevent unmerited injunctions.

If you’re a plaintiff seeking a preliminary injunction, you most likely will need an injunction bond. You may also need an injunction bond to file a temporary injunction. Bonds aren’t required for permanent injunctions but often required until a permanent order is filed. 

Your judge will inform you of your injunction bond requirement and the amount of coverage you need. It’s essential to purchase your bond immediately to avoid delaying the hearing.

An injunction bond is a three-party agreement between a principal, an obligee, and a surety.

• Principal: The plaintiff required to obtain the bond
• Obligee: The defendant in the case and potential bond beneficiary
• Surety: The company that issues and backs the bond

If the defendant files a valid claim against the plaintiff’s bond, the surety will pay the defendant to cover any damages the plaintiff caused. The plaintiff will then be held responsible for paying back the surety in full – plus interest and fees – for all claim-related costs.

The court will set your injunction bond coverage requirement, and you will pay a small percentage of that amount as your bond premium. The amount will depend on the specific injunction order and state statutes. Typically, the better your credit score is, the lower your premium rate will be. You can expect to pay 2-3% or less of the bond if you have good credit and don’t post collateral.

Depending on your creditworthiness, you may or may not need collateral in addition to a surety bond. If your bond requires collateral, the cost of your bond will typically be 1% of the coverage amount.