Through Texas Lawyers’ Professional Insurance Agency (TLPIA), we offer several types of bonds that you may need in your practice. These bonds – Civil Court Bonds, Fiduciary (Probate) Bonds, and ERISA bonds – are backed by The Bar Plan Mutual Insurance Company or its subsidiary, The Bar Plan Surety and Fidelity Company.
Civil Court Bonds – What are they and when would you need one?
A Civil Court Bond is a bond that guarantees the performance or obligation of one party to a lawsuit. The bond is for the protection of the opposing party to the lawsuit. Examples of a Civil Court Bond are Appellate Bonds, Supersedeas Bonds, Replevin Bonds, Injunction Bonds and TRO Bonds.
What are the requirements to obtain a Civil Court Bond?
There are three easy steps that are required to obtain a Civil Court Bond:
- Submit a completed Application and executed Indemnity Agreement;
- Provide a copy of the Lower Court Judgment or Petition of the applicable action being filed; and
- Provide collateral (usually in the form of Irrevocable Letter of Credit).
Why is Collateral Required for a Civil Court Bond?
Civil Court Bonds generally represent a greater risk than fiduciary (probate) bonds because the likelihood of payout is much greater. This is particularly true of Appellate/Supersedeas Bonds because the bond principal already has a judgment against him/her.
Due to this increased likelihood of payout, collateral is required on all Civil Court Bonds. The most accepted form of collateral is an Irrevocable Letter of Credit (ILOC). The person posting the bond (the “Principal”) generally can obtain an ILOC through the Principal’s bank. The Principal should start this process as soon as possible because the Surety (the entity issuing the bond) will need to get comfortable with the financial strength of the bank and the wording of the ILOC. The Surety will need:
- Name and address of the bank you will obtain the ILOC from;
- A draft of the ILOC language; and
- Once the ILOC has been approved, the original ILOC.
Once the Surety receives the original ILOC, the bond will be issued.
Fiduciary (Probate) Bonds – What are they?
A Probate Bond, also known as a Fiduciary Bond, is a type of surety bond that protects the estate and its beneficiaries. When a personal representative (executor or administrator) is appointed, he/she must faithfully perform their duties, handle estate assets properly, and distribute property according to the law and the decedent’s wishes. The bond protects the estate, and its beneficiaries and distributees, against potential mismanagement or fraud.
Why Should an Attorney Encourage Clients to Obtain a Probate?
- Protection of the Estate and Beneficiaries – Even the most trustworthy personal representative can make errors in judgment or accounting. A Probate Bond provides financial recourse if the executor mishandles estate funds or fails to fulfill their fiduciary duties. Beneficiaries are safeguarded, and potential claims can be addressed without immediately resorting to lengthy litigation. This protection can be especially important in estates with significant assets, complex distributions, or multiple beneficiaries with conflicting interests.
- Reduction of Attorney Liability – Recommending a Probate Bond demonstrates due diligence in protecting the estate and its beneficiaries. If issues arise, the presence of a bond can reduce exposure to malpractice claims, as it reflects proactive risk management and adherence to best practices.
- Satisfaction Court Requirements – Some jurisdictions require a Probate Bond unless waived by the will or by court order. Even when not mandatory, courts often view the presence of a bond favorably, as it provides additional assurance that the estate will be administered responsibly. In some cases, the court may insist on a bond for estates with minors, contested claims, or significant liabilities.
- Encouragement of Transparent Administration – Obtaining a Probate Bond involves working with a surety company, which may require that the executor demonstrate financial responsibility and an understanding of fiduciary duties. This additional layer of oversight encourages meticulous record-keeping, careful accounting, and adherence to legal obligations—benefiting both the attorney and the client.
The Bar Plan is Your Trusted Provider for these bonds.
Civil Court bonds are a highly specialized niche. It is important to use an agent/broker who is knowledgeable about court-related surety bonds and can help get you what you need. You want a company that will not only sell you what you ask for, but who will ask the right questions and meet your needs the first time.
As with any insurance related product, the key to low premiums is quality underwriting. Companies and agencies that specialize in Civil Court Bonds are often better able to underwrite the risks because they understand the risks better. The result can often be lower premiums.
When time is of the essence (which is most of the time) you will want an agent who can get you your bond quickly: a 24- to 48-hour turnaround is not unreasonable in most cases. If you are told it will take significantly longer than that, you are likely dealing with a company not experienced in this area.
Similar reasons exist to use The Bar Plan as your source for Fiduciary Bonds: competitive pricing; nationwide coverage; top rated customer service; 24-48 hour turnaround; experienced team familiar with court requirements; trusted provider; and attorney managed.
If you have questions, want to apply for a bond, or need more information, call 1-877-553-6376 or visit us at https://www.tlie.org/tlpia/court-bonds