Bail Bonds: The "Chain of Liability" and what it means to you

When you sign a bail bond agreement, you are signing to be financially responsible for the person you are bailing out to make all of their required court appearances until the bond is exonerated. If that person fails to appear, most contracts state the bail bond company can demand that you deposit the full amount of the bail with their company right away. If the person is not found within the timeline allowed by the court, you will be required to pay the full amount of the bail PLUS any costs incurred while trying to find the defendant. If you have deposited collateral with the bail bond company, they will send you a demand for the money and/or take action against whatever collateral they are holding to recover their money. If there is no collateral, the bail bond company can sue you in a court of law to recover the money they had to pay the court and also any expenses they can document they incurred while trying to search for the defendant.

People often mistakenly think that the insurance company who supplies the bail bonds to the bail bond company will pay the court if the bond goes bad. This simply is not true. Where the "insurance" part comes in is to the County the bond was written in and to the State of California. If the bail bond company fails to meet their financial obligation to pay the court in regards to a bail bond forfeiture, the insurance company is next in line to pay that bail bond forfeiture. If the insurance company DOES NOT pay the bail bond forfeiture, their bail bonds will no longer be accepted in that county until that forfeiture is paid in full.

Bail agents don't usually let the situation get to the point where their insurance company has to step in and pay the bail bond forfeiture. At least not ones that want to stay in business for very long. Insurance companies usually hold collateral in the form of assets that belong to the bail agent. The collateral can be a lien on one or more properties and/or cash. Typically, bail agents pay a small percentage of each bond they write into what is called a "build up fund". This is money the insurance company holds onto for the bail agent in case they do get a forfeiture and it has to be paid to the court. It's sort of a forced savings account.

So if you talk to a bail bond company and they ask you for collateral, they are not asking you to do anything they haven't already done themselves. YOU know the person you are bailing out is going to make all of their court appearances, right? This will lead into a whole other discussion which I will address in another post.