Conservator Bond

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about conservator bonds, also known as conservatorship bonds.  If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

 

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What Is a Conservator Bond?

A conservator (or conservatorship) bond is a type of court bond, specifically a type of probate bond. These are bonds that a probate court orders when appointing someone to serve in a fiduciary capacity to manage someone else’s assets (the conservatee).

The primary fiduciary responsibilities are to avoid conflicts of interest and always act in the best interest of the conservatee. Failing to live up to those responsibilities can result in financial harm to the conservatee. A conservator bond provides financial protection against such a loss, as well as a way for the injured party to recover damages.

Who Needs One?

Anyone who is appointed to serve as a conservator will be required to provide the probate court with a conservator bond. The amount of a conservator bond will vary depending on the state, the value of the assets under the conservator’s management, and other factors.

How Does a Conservator Bond Work?

There are three parties to a conservator bond: the probate court ordering the bond (known as the bond’s “obligee), the conservator (the bond’s “principal”), and the party guaranteeing the bond (the “surety”). Each party has different rights and obligations:

  • The obligee issues the court order for a bond and sets the required bond amount.
  • The surety sets the annual premium rate the principal will pay for a conservator bond.
  • The principal must abide by the legal requirements and standards that apply to fiduciaries.
  • A violation by the principal that causes the conservatee financial harm gives the obligee the right to file a claim against the bond on behalf of the conservatee to recover monetary damages.
  • The surety investigates any claim and determines whether it is valid.
  • The principal is legally obligated to pay all valid claims against the bond.
  • The surety, however, has guaranteed the payment of valid claims and typically pays the claimant directly, as an extension of credit to the principal.
  • The legal obligation for claims still belongs to the principal, who must repay the resulting debt to the surety.
  • The surety can take legal action against a principal that fails to reimburse the surety for claims paid on the principal’s behalf.

How Much Does It Cost?

The annual premium for a conservator bond reflects the risk the surety takes on in agreeing to guarantee the bond. The surety’s underwriters assess the risk of a claim being incurred and the risk of not being repaid for a claim paid on the principal’s behalf.

The principal’s personal credit score plays a big part in setting the bond’s premium rate. Someone with a high credit score has a history of being financially responsible and is viewed as unlikely to violate the terms of the surety bond agreement. The low-risk level results in a low premium rate, typically in the range of 1% to 3%.

The reverse is also true. A person with lesser credit is perceived as a greater risk to the surety, which warrants a higher premium rate.

Typically, a principal with good credit will pay a premium rate in the range of 1% to 3%.

At Surety Bonds Agent, we offer a full range of surety bonds nationwide through an extended carrier network. Continue below to learn more about conservator bonds, also known as conservatorship bonds.  If you have additional questions or want to explore bonding solutions for your business, speak with one of our knowledgeable surety bond experts.

 

CONTACT US FOR A

FREE CONSERVATOR BOND QUOTE

What Is a Conservator Bond?

A conservator (or conservatorship) bond is a type of court bond, specifically a type of probate bond. These are bonds that a probate court orders when appointing someone to serve in a fiduciary capacity to manage someone else’s assets (the conservatee).

The primary fiduciary responsibilities are to avoid conflicts of interest and always act in the best interest of the conservatee. Failing to live up to those responsibilities can result in financial harm to the conservatee. A conservator bond provides financial protection against such a loss, as well as a way for the injured party to recover damages.

 

Anyone who is appointed to serve as a conservator will be required to provide the probate court with a conservator bond. The amount of a conservator bond will vary depending on the state, the value of the assets under the conservator’s management, and other factors.

There are three parties to a conservator bond: the probate court ordering the bond (known as the bond’s “obligee), the conservator (the bond’s “principal”), and the party guaranteeing the bond (the “surety”). Each party has different rights and obligations:

  • The obligee issues the court order for a bond and sets the required bond amount.
  • The surety sets the annual premium rate the principal will pay for a conservator bond.
  • The principal must abide by the legal requirements and standards that apply to fiduciaries.
  • A violation by the principal that causes the conservatee financial harm gives the obligee the right to file a claim against the bond on behalf of the conservatee to recover monetary damages.
  • The surety investigates any claim and determines whether it is valid.
  • The principal is legally obligated to pay all valid claims against the bond.
  • The surety, however, has guaranteed the payment of valid claims and typically pays the claimant directly, as an extension of credit to the principal.
  • The legal obligation for claims still belongs to the principal, who must repay the resulting debt to the surety.
  • The surety can take legal action against a principal that fails to reimburse the surety for claims paid on the principal’s behalf.

The annual premium for a conservator bond reflects the risk the surety takes on in agreeing to guarantee the bond. The surety’s underwriters assess the risk of a claim being incurred and the risk of not being repaid for a claim paid on the principal’s behalf.

The principal’s personal credit score plays a big part in setting the bond’s premium rate. Someone with a high credit score has a history of being financially responsible and is viewed as unlikely to violate the terms of the surety bond agreement. The low-risk level results in a low premium rate, typically in the range of 1% to 3%.

The reverse is also true. A person with lesser credit is perceived as a greater risk to the surety, which warrants a higher premium rate.

Typically, a principal with good credit will pay a premium rate in the range of 1% to 3%.

 

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