What Does Bail Bond Mean?
A bail bond is a bond that a bail bondsman gives to a criminal defendant so that he or she can pay the government to release him or her from being incarcerated while awaiting trial. This is called “making bail.” If the defendant shows up for trial, then he or she gets the money back. He or she can then use that money to repay the bail bondsman. In the context of insurance, bail bond companies must have commercial insurance to legally operate due to the risks associated with the business.
Insuranceopedia Explains Bail Bond
Bail bond companies are required to have insurance from a “surety company” because the bail business can be very risky. The reason is because many defendants do not show up for their trials. When this happens, the government keeps the bail money. This means the bail bond company can lose money. However, many bail bond companies require collateral from defendants in order to give them bonds. Between collateral and commercial insurance from surety companies, bail bond companies can be well equipped to handle the risks associated with the business.