Bail Bond
What Does Bail Bond Mean?
A bail bond is a bond provided by a bail bondsman to a criminal defendant, allowing them to pay the government for their release from incarceration while awaiting trial. This process is known as “making bail.” If the defendant attends the trial, the money is refunded, and they can use it to repay the bail bondsman. In the context of insurance, bail bond companies are required to have commercial insurance to operate legally due to the risks involved in the business.
Insuranceopedia Explains Bail Bond
Bail bond companies are required to obtain insurance from a “surety company” due to the high risks involved in the bail business. This is because many defendants fail to appear for their trials, resulting in the government keeping the bail money. As a result, the bail bond company may incur financial losses. To mitigate this risk, many bail bond companies require collateral from defendants in exchange for providing bonds. With the combination of collateral and commercial insurance from surety companies, bail bond companies are better equipped to manage the risks associated with the business.
