Public Official Bonds are also known as surety bonds which is a kind of obligation in statutory or legal form to fulfill the official duties towards the public with complete integrity. The bond specifies that all public officers, as well as secondary obligors, would have to pay a fine of a fixed amount if they fail to perform their required duties faithfully. Similar to other surety bonds, public official bonds have three involved parties as it is a three-party agreement. The parties involved are the principal or the public official, the obligee or the public/government that would be served by the official and the surety or the secondary obligor/bonding company who would be underwriting the bond.
Types of Public Official Bonds
Public Official Bonds are of two types – Fidelity Bonds and Faithful Performance Bonds. The coverage for both these bonds is different.
- Faithful Performance Bond: This bond ensures that the public official faithfully performs his/her duties and the coverage through this bond is given from a range of ordinary negligence of duty to different lapses in the fidelity of the official. Sometimes the coverage of the bond may be extended not only to faithful performance but also to account for all the money that comes into the hand of the public official. The bonds also ensure that all the subordinates or deputies working under the public official must also perform their duties faithfully, the breach of which will be accounted on the public official.
- Fidelity Bond: This bond ensures that the public official works with complete honesty and the public official will be indemnified if any party suffers any loss at the hands of the public official due to their dishonesty or misconduct.
People Who Need a Public Official Bond
Public Official Bonds are needed by agents, public officials and clerks of different categories, which are:
- Town Clerks and other officials of the town
- Agents who sell fishing and hunting licenses
- Judges and Mayors
- Court Officers and Court Clerks
- Assistant Treasurer, Treasurers, and Subordinates
- Deputy Tax Collectors, Tax Collectors, and their subordinates
Cost of a Public Official Bond
The government of the state or the city is the one who normally pays for the protection of the bond; however, if any claim is made against any official with a bond then they have to pay the surety amount. If any proof is found which states that the public official has committed any fraud or misconduct then the amount would be paid to the state as a fine. The cost of the bond is usually between 1% to 5% of the amount of the bond and varies in different states.
Public Official Bonds are very important and ensure that all public officials fulfill their services with complete honesty towards the government and the public. The clauses imposed in the public official bonds keep the officers from diverting from the fulfillment of their duties and responsibilities towards the state or city.