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How Public Official Bonds Work

Public officials serve the public and as a result have a great deal of responsibility that the public can hold them accountable for. A public official bond is a surety bond that helps ensure that public officials complete their official duties faithfully and with integrity. This type of surety bond helps protect the public in the event that a public official breaks any rules or fails to adhere to regulations relating to their role—such as committing fraud. You may also hear public official bonds referred to as: public employee dishonesty bonds, faithful performance bonds, fidelity bonds, and public employee blanket bonds.

Read on for more insight into what a public official bond is, what parties are involved, and how this surety bond helps protect the public. 

Who Is Involved in a Public Official Bond?

There are three main parties involved in any public official bond. The first and foremost is the principal. This is the public official who must hold the bond. They are required to have a public official bond because the obligee sets this requirement. In the case of a public official bond, the obligee is usually the government or can be the public that the official serves. Finally, the surety is the party who issues and backs the bond on behalf of the principal. 

Typically, public official bonds relate to officials who work in city, municipal, or town governments. They can also apply to state government agencies, cities, state courts, and state or community colleges. In order to qualify for office, many different types of public officials are required to hold a public official bond due to an act passed by congress in 1792. 

These are a few examples of the clerks, public officials, and agents that may be required to hold a public official bond:

• Sheriffs or deputies

• Court clerks

• Officers of courts

• Agents who sell hunting and fishing licenses

• Constables

• Mayors

• Judges

• Treasurers and assistant treasurers

• Town clerks or officials

• Tax collectors and deputy tax collectors

How Public Official Bonds Work

All elected public officials (and in general most public officials) have to hold a public official bond in order to hold office. These bonds become effective before and once a public official has taken the oath of office.

Typically, a public official bond helps protect the public from when a public official breaches their duties of office, such as committing fraud or acting dishonestly. Generally, this type of bond protects a city or entire citizenship that the public official represents when losses occur. If an individual has suffered financial damages because of a public official’s misconduct, in some states they may be able to file an individual suit against the public official bond. 

There are two main types of public official bonds:

-Fidelity bonds: A fidelity bond is designed to ensure a public official acts honestly and if they fail to do so, a claim can be filed against the bond to indemnify financial losses caused by their failure to perform their duties faithfully

-Faithful performance bond: This type of bond can cover lapses in fidelity through ordinary negligence and guarantees the principal faithfully accounts for all money that comes into their hands. 

Public Official Bond Costs

While the public official doesn’t have to buy the public official bond themselves (usually the city or state government purchases their own protection), the public official will have to pay the surety back if a claim is made against their bond and the surety finds that claim to be valid. Because of this, public officials have a lot of financial motivation to stay on the right path. 

Usually, a public official bond costs 1% of 5% of the bonding capacity (which is the highest amount someone can claim against the bond). What the bonding capacity is will depend on what state you live in. The price of a public official bond depends on many different factors. Those factors are used to determine what percentage of the bonding capacity will need to be paid. 

Some factors that are taken into consideration include:

• Qualifications of the public official

• Nature, role, or position of the public official’s required duties

• Personal background of the public official

• Financial background of the public official

When it comes time to apply for a public official bond, the applicant will need to submit a variety of documents. To start, they have to complete a bond application and a bond form. They can get a copy of the bond form from the state or their state’s regulation department. A handful of financial documents can also be required. Evidence surrounding the public official’s qualifications, financial situation, and personal background may also be included in the application process.

To learn more about potential rates, click here to start the Public Official Bond Application process.