Difference Between a Bail Bond and a Surety Bond
The greatest desire most people have after getting arrested is to regain their freedom as soon as possible. In most cases, the criminal justice system requires that bail be posted to release a person from jail. Whoever posts bail is entering into a bail bond obligation and needs to understand what the options are.
Bail bonds fall into two categories:
Cash Bail Bonds
An agreement to use a cash bond to free the accused from jail requires depositing money or other assets of value with the court. Anyone — the accused or his or her friends or family — can post a cash bond. Whoever does it, however, must guarantee that the accused will meet all the conditions of bail and show up for all future court appearances.
If all those conditions are met, when the case has been resolved the parties involved in cash bond transactions have their funds returned minus court costs and any required restitution. If not, they’re liable for the full bail.
The amount of bail the court requires varies with the seriousness of the alleged crime. It can range from a few hundred dollars for misdemeanors to hundreds of thousands or even millions for the most serious felonies.
Federal and state courts, on the other hand, often release a person from jail when just 10 percent of the bail obligation for their crime is posted. For bail set at $25,000, for instance, the deposit would be just $2,500. But by breaking the conditions of bail or failing to appear, the accused becomes liable for the full amount. Otherwise, the deposit is refunded minus court costs or restitution.
The parties involved in cash bond agreements include the court and the accused or whoever posts bail on the accused’s behalf.
A poor person arrested for a crime may not have the resources to post even 10 percent of the cash needed for bail. In that instance, the only option to free the accused from jail is to hire a bail agent.
Bail agents are known as sureties because they agree to make sure the accused will honor all bail conditions and court dates. They do it with contracts known as surety bonds. In addition to the bail agent, all those qualified to post cash bonds can become parties involved in surety bonds instead.
The decision to hire a bail agent shouldn’t be made lightly. First, an agent requires 10 percent of the bail amount as nonrefundable, upfront financial compensation. Second, the other party or parties involved in surety bonds contracts need to sign a promissory note. It’s an agreement to pay the entire bail if the person arrested for a crime misses a court date.
The Surety Bonds Guarantee
The nonrefundable, 10-percent fee that whoever decides to hire a bail bond agent pays goes toward more than freeing the accused. It also helps buy the insurance that the agent’s company needs to meet its obligations.
The insurance is called a surety bonds guarantee. It gives the court confidence that the agent can cover the entire bail if the accused fails to appear. To limit their own risks, insurance companies require bail agents to pay into a fund reserved for covering their potential losses from insuring surety bonds.
Because of the surety bonds guarantee, most bail bond agents can arrange blanket bail bonds with the local courts. These excuse them from having to deposit cash with the court for each new defendant. A blanket bond provides financial compensation to the court whenever an agent’s clients fail to appear.
The courts benefit greatly from this guarantee. Without it, they can’t count on anyone covering bail when a released defendant defaults. With nobody to cover bail, there’s no point to setting it. And without bail, innocent people being jailed indefinitely while their cases make their way through the courts would have their lives devastated.