Axis Insurance Services LLC provides commercial real estate E&O insurance coverage for a large number of commercial real estate firms. Many of our commercial real estate clients provide services as a court appointed receiver. These bonds vary by state and jurisdiction, but in general are guarantees by an insurance company of the payment of a specified amount of money in the event of a default by the Receiver. The cost of the bonds are typically inexpensive, ranging from $300-$500 apiece and can be obtained relatively quickly. When searching for a receiver bond you will need to know a few things of importance.
1. It is a financial guarantee. Therefore the bonding company will require evidence of financial worth. This can include tax returns, financial statements or other information regarding the ability of the insured to repay the bond in the event it is called.
2. Most receivers are appointed personally. That means that the liability and the potential repayment of the bond are often personal guarantees. As such it is very common for a bonding company to require the bond be signed by a spouse.
3. The bond has a time period (policy period). That means the bond will expire on a certain date and need to be renewed. It is possible that if your financial condition has changed, the bonding company may require collateral.
4. You may have to post collateral Since, the bond is based on a personal guarantee and the ability of the insured to make good on the bond, Receivers may have to post collateral if they have a significant amount of bonds. Receiver bonds are typically $25,000 to $50,000, depending upon the state and jurisdiction. If you were the receiver on 10 properties, an insured might have to show new worth in excess of $500,000 to get additional bonds without collateral.
Axis Insurance Services LLC provides our clients with access to receiver bonds properly structured to meet the needs of our commercial real estate clients. Please contact one of our licensed representatives and they will be happy to assist