Auctioneer

Just like many other professional occupations, going into business as an auctioneer or auction house involves obtaining a surety bond. Generally, local and state governments require these bonds to protect the consumer from any misconduct, and the Auctioneer Bond is no exception.

The auctioneer’s bond protects both consumers and the obligee usually the state or locality) against substitution of goods, misrepresentations of auction items and fraud.

There are three parties involved in each bond the auctioneer:

Besides being required by the state and locality, the auctioneer’s bond often increases buyers’ confidence in the auctioneering service since they know the bond is protecting their bids and purchases.

Just like other Surety Bonds the Auctioneer bond is subject to credit approval. The application process includes a credit check and financial analysis. Since, in the event of a claim, the auctioneer will be expected to pay the amount of the claim against the bond, it’s imperative that they are financially able to do so.

Auctioneer bonds are typically purchased through companies that specialize in the sale and distribution of all types of Surety Bonds. They can also be purchased through some insurance companies, however, surety bonds are a form of credit, not insurance.

The amount of an auctioneer’s bond varies from state to state, but it is usually between $2,000 and $50,000. The amount is equal to the penalty the auction house might pay in the event of a claim. A higher amount does require the auction house or auctioneer to meet a more stringent financial requirement.

Costs vary widely from company to company and depend heavily on the auctioneer’s credit score. The bond will most likely need to be renewed every two to three years, and the process may require additional credit checks.