Supersedeas Bonds
What is a Supersedeas Bond?
A supersedeas bond is typically required during the appeal of a civil judgment, and is sometimes referred to as an appeal bond as well. This type of court surety bond is posted by the appellant in civil litigation matters to prevent enforcement of a judgment while their appeal is in process. Below you’ll find an overview of the essential information that will prepare you and your client for approaching a broker and avoiding a lengthy underwriting process.
How Does a Supersedeas Bond Work?
When a supersedeas bond is posted with the court, it is to maintain the status quo during the appeal proceedings. Its primary purpose is to guarantee that if the judgment is affirmed, the surety insurer that issued the bond will pay the appellee if the appellant is unable to. To put it simply, a supersedeas or appeal bond ensures the judgment debtor will satisfy the judgment if the judgment is upheld.
How to Apply for a Supersedeas Bond
The process for obtaining a supersedeas bond requires the following information:
- An Application
- Court Complaint
- Judgment/Order
- Notice of Appeal
Due to the high risk and likelihood of a claim, collateral in the full amount of the supersedeas bond is typically required. There are several exceptions to this general rule, and to consider providing a bond without collateral, surety insurers will review the company or individual’s financial statements to determine if the financial strength is significantly greater than the bond required.
Types of Collateral
When applying for a supersedeas bond, only specific types of collateral are accepted and some under specific circumstances. Below you will find the four types of collateral a surety provider will accept before issuing an appeal bond. It’s important to note that these forms of collateral are not mutually exclusive and can be used in combination with one another:
Cash
Cash
Marketable Securities
Marketable Securities
Bank Letters of Credit
Bank Letters of Credit
Real Estate
Real Estate
To read more about the specific details of each form of collateral, visit our Collateral Options Page
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What Does a Supersedeas Bond Cost?
The cost of a supersedeas bond can vary a great deal, and it depends on the size of the judgment, the financial strength of the applicant relative to the bond amount, and if collateral is required, the type of collateral that is used. The actual cost of the supersedeas bond is a percentage of that total bond amount, which can range anywhere from .30% to 4%. For example, if the appellant needs to post a $4,000,000 appeal bond, and the premium rate was set at .75% then their premium for the bond would be $30,000. The bond premium is in addition to the collateral that the appellant may have to post.
To learn more about what is involved in the cost of an appeal bond, we invite you to read an article on that subject here:
Or, you can contact us now:
Working with Us to Get a Supersedeas Bond
To secure a supersedeas bond, it is in the appellant’s best interest to work with a surety broker that specializes in these types of bonds. Going through the underwriting process is not the time to be guided by someone unfamiliar with what surety insurers require.
Since 1984, we at CSBA have been assisting attorneys and their clients with securing supersedeas bonds in a variety of civil litigation matters. We have over 110 years of combined experience, which is important as our specialty is in appeal bonds. We have also consulted on preparing pre-trial reports, served as expert witnesses, and provided declarations and affidavits to courts.
We have gained a deep understanding of the appellate process at both the state and federal courts through our extensive work with almost every major law firm in the industry.
This is the kind of expertise that is indispensable to an attorney and their client when working to appeal a court’s decision and obtain a supersedeas bond.
If your client is in need of a supersedeas bond, we encourage you to reach out to us and begin the process of pre-qualifying your client for the bond.