Who is the surety on a Fiduciary’s Bond?

When you are a fiduciary, it is important to have a bond in place to protect your clients. This bond guarantees that if you make any mistakes while acting in your role as fiduciary, your clients will be compensated. But who is the surety on this bond? In other words, who is responsible for compensating your clients if you do make a mistake?

Who is the surety on a Fiduciary's Bond? - A hand holding a fiduciary duty book. Inside the court.

What is a  fiduciary bond?

A fiduciary bond is a type of surety bond that provides financial protection to a principal against losses caused by dishonest or fraudulent acts. Fiduciary bonds are also known as guardianship bonds and trustees’ bonds. Although they do not provide coverage for the principal’s own bad acts, these bonds offer coverage for losses due to the misconduct of a fiduciary appointed by the courts or requested by either party.

Types of fiduciary bonds

Types of fiduciary bonds are divided into two main categories: court-issued and voluntary. Court-issued bonds are required by a judge or other court order and are used to protect the interests of an estate, trust, or conservatorship. Voluntary fiduciary bonds are not legally mandated but can be voluntarily purchased by individuals or organizations that wish to offer additional protection for their clients or customers.

Tell me the purpose of fiduciary bonds.

The purpose of a fiduciary bond is to protect beneficiaries from any losses due to a breach of trust, negligence, and/or malfeasance on the part of the fiduciary. These bonds offer financial protection to the beneficiary in the event that any wrongdoings or failure to uphold fiduciary duties are discovered.

Who needs a fiduciary bond?

Businesses in certain industries, such as the financial services industry and the legal profession, may require specific individuals to post a fiduciary bond in order to protect their client’s interests. In particular, fiduciary bonds are often required when an individual will handle or manage another person’s money in some way. Some examples of professions that may require a fiduciary bond include:


-Financial advisors and stockbrokers

-Trustees and executors of a will

-Guardians or conservators of an estate

-Insurance agents and brokers

-Accountants, tax preparers, and bookkeepers

-Custodians of financial records.

Who is the surety on a fiduciary’s bond?

A surety is a third party who agrees to be responsible for the debt or obligation of another person, known as the principal. In the case of a fiduciary’s bond, the surety typically has an interest in guaranteeing that the fiduciary will fulfill his or her obligations and make any payments due under the bond agreement.

Fiduciary bonds & insurance

Fiduciary bonds & insurance are essential for protecting both businesses and individuals from potential financial losses that can result from the actions of fiduciaries. Fiduciary bonds are surety bonds required by law in certain situations, such as when someone is appointed to manage money on behalf of another person or party. Insurance is a type of contract between two parties (the insurer and the insured) in which the insurer agrees to pay a predetermined amount of money in the event that certain specified occurrences happen.

How much does a fiduciary bond cost?

The cost of a fiduciary bond, also known as a guardian bond or conservator bond, depends on the amount of coverage required, which is determined by the state in which it is purchased. The amount of coverage typically ranges from $15,000 to $100,000 and may require additional fees for certain services such as background checks. Some states also require a credit check.

Can I get a fiduciary surety bond with bad credit?

The short answer is yes, but the cost and availability of such a bond depend on your credit score. If you have poor or bad credit, it may be difficult to find a surety company willing to provide a fiduciary surety bond at an affordable rate. However, depending on your specific situation, there are various options available that can help you get the bond you need.

How does someone get a fiduciary bond?

The process of obtaining a fiduciary bond is relatively straightforward. The first step is to contact an insurance provider or broker who can provide the bond. Once contacted, the insurer will need to know details about the individual or entity needing the bond and its purpose (i.e., what they will be doing with it). After that, they will need to provide some basic information, such as their Social Security Number, address, and contact information. The insurer will then take this information to generate a quote that provides details about the cost of the bond, how much coverage it provides, and any other additional requirements or stipulations. Once the quote is accepted, a binding agreement between the fiduciary and the insurer is signed, and the bond is purchased.

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