This bond is to protect the sheriff for the payment of any expenses that may be incurred in the sheriff’s compliance with what is commonly called a Writ of Execution. When a judge issues a Writ of Execution in the District Court of the State of Maryland, it may require a Writ of Execution Bond. The bond itself is an extension of credit, and we look to make sure that the bond principal, or the entity that obtained the writ, has sufficient assets to pay for the sheriff’s fees and expenses if they incur them and the court later finds that the writ was issued improperly.
When my office is working with a corporation, they are required to provide a profit and loss statement along with a balance sheet for the most recent fiscal year-end and their interim results to underwrite the matter. The surety, along with my office, will review these items to determine what, if any, collateral is required.
If the applicant for the bond is an individual, we generally look at the individual’s credit and whether or not they own their own home. The surety will generally also require the applicant to provide a personal financial statement, depending on the size of the bond. It’s a corporation; we would look at their financials and require them to execute an indemnification agreement, which protects the surety from any loss associated with the bond.
Regardless of the type of entity that is applying for bond, every surety will require that they execute what is commonly referred to as an indemnity agreement. Since the bond is an extension of credit (or a financial guarantee of payments) the surety requires that the applicant provides financial disclosure and for the applicant to execute an indemnity agreement. The surety also charges an annual bond premium. With bonds related to court proceedings, the first-year bond premium is fully earned.
As with most bond situations, if you’re seeking a Writ of Execution, it’s suggested that you line up the bond ahead of time because if your client can’t obtain the bond, the sheriff may not comply with the writ.
Neil Pedersen
PEDERSEN & SONS SURETY BOND AGENCY, INC.
15 Maiden Lane Suite #800
New York, NY, 10038
212-227-7277
neil@courtbondnow.com
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