AUCTIONEER BOND OVERVIEW:

The auctioneer surety bond is a type of bond which local governments request of individuals, as a requirement for receiving their auctioneering business license.

In many states, future auctioneers are required to post this bond during their licensing process. This bond is typically requested by the local Licensing Board, the Secretary of State, or another similar institution.

An auctioneer bond, also called an auction bond, is a form of guarantee that licensed and bonded auctioneers will comply with state regulations pertaining to their business. It guarantees the ethical and honest performance of their duties, such as accounting for all payments they receive.

The auctioneer bond protects the public from auctioneer fraud, false advertising, misrepresentation, or mishandling of items, and any other type of illegal behavior. It provides customers with the right to file a claim if the auctioneer is found to have caused them any financial damage.

The auctioneer bond is an agreement between three parties, like all other bonds: the principal (the auctioneer), the obligee (the public and the government institution requesting the bond), and the surety bond company that backs the bond financially.

Whenever an auctioneer is found to be in breach of their obligations, consumers can file a claim against their bond and receive compensation by the surety within the maximum penal sum of the bond. An auctioneer who faces a legitimate claim against their bond must compensate their surety in return for any financial backing they have extended to the claimant on the auctioneer’s behalf.