Auctioneers Bond

[Mr. Bond]

I am trying to get a bond approved but the surety wants the obligee to agree to add additional verbiage that would clearly state an aggregate limit and a cancellation clause. According to the state, the cancellation clause is implied and the aggregate is written in their statute. Will this be sufficient for an approval?

[marietta68]

Originally Posted by Mr. Bond

I am trying to get a bond approved but the surety wants the obligee to agree to add additional verbiage that would clearly state an aggregate limit and a cancellation clause. According to the state, the cancellation clause is implied and the aggregate is written in their statute. Will this be sufficient for an approval?

"Implied" cancellation provisions don't hold up very well when disputed. In fact, the cancellation requirements should be spelled out difinitively in the applicable code section. The surety underwriter should be able to research the provisions made by the law - statutes are very accessible on the internet. If you care to identify the state in which you're trying to be bonded, I'll direct you to a source.

[Mr. Bond]

The state is OHIO and it's for $50,000. It is form # 17 and it is called an "Auction Firm Bond Statement"

Thanks for your help Marietta68!

[marietta68]

Link to code section pertaining to application of liability limit: Lawriter - OAC - 901:8-2-10 Auction firm license; claim against auction firm.

When I contacted the OH Agriculture Dept in charge of the Auctioneer Division regarding the lack of cancellation provision in their bond form, they told me they accept a 30 day notice and then contact the licensee to replace their bond.

In fairness to whomever you're working with, this lack of structure IS a problem!

My next suggestion would be to ask your bonding company to contact their underwriting counterpart for the Ohio area - local experience is worth its weight in gold. I am unaware of industry warnings regarding problems retiring from Ohio bonds. Good luck.