Auctioneer surety bonds protect consumers from misconduct, such as fraud, substitution of goods, misrepresentations of auction items, and theft of money. Pennsylvania requires all auctioneers, auctioneer apprentices, auction companies or auction houses to be licensed and have a $5,000 bond.
A surety bond is different than insurance in several ways. The surety’s duty is to the state or customer and not to the auctioneer. If the auctioneer doesn’t comply with Pennsylvania auctioneer statutes governing the conduct of auctioneers and the customer suffers a financial loss, the surety company will pay the customer and look to the auctioneer for reimbursement.
Unlike an insurance policy, a surety bond does not pay losses for the auctioneer. The bond ensures that the auctioneer will be able to pay for any losses up to the face amount of the bond.
Surety companies, such as E. R. Munro and Company, always consider the integrity of the auctioneer and look at the auctioneer’s financial assets, debts, working capital and the auctioneer’s overall work experience and success. The bond application process involves a credit check and financial analysis. Surety companies make sure that those they bond have the financial resources to meet any obligations that the bond guarantees.
For more information on auctioneer bonds, call Chuck Croyle at E. R. Munro and Company, 1-877-376-8676, Ext. 110 or E-mail him at [email protected].
