California Auctioneer Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a California Auctioneer Bond
At a Glance:
- Lowest Cost: $200 per year or $20 per month
- Bond Amount: $20,000
- Who Needs it: All auctioneers and auction companies operating in California
- Purpose: To ensure the public receives compensation for financial harm if the auctioneer/company commits fraud or breaches consumer contracts
- Who Regulates Auctioneers in California: The California Secretary of State
Background
California Civil Code 1812.600 requires all auctioneers and auction companies operating in the state to file a surety bond with the Secretary of State before conducting business. The California legislature enacted the bonding requirement to ensure that auctioneers engage in ethical business practices. There is no statewide licensing requirement for auctioneers and auction companies in California. However, the auctioneer’s local municipal authority may require the auctioneer to purchase a local business or tax license.
What is the Purpose of the California Auctioneer Bond?
California requires auctioneers and auction companies to purchase a surety bond as a prerequisite to conducting business. The bond ensures that the public will receive compensation for financial harm if the auctioneer/company fails to comply with the regulations set forth in California Civil Code 1812.600. Specifically, the bond protects the public in the event the auctioneer engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the auctioneer or auction company acts unethically.
How Can an Insurance Agent Obtain a California Auctioneer Surety Bond?
BondExchange makes obtaining a California Auctioneer Bond easy. Simply login to your account and use our keyword search to find the “California” bond in our database. Don’t have a login? Gain access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the California Auctioneer Bond?
No, a credit check is not required for the California Auctioneer bond. Because the bond is considered relatively low risk, the same low rate is offered to all auctioneers and auction companies operating in the state, regardless of their credit history.
How Much Does the California Auctioneer Bond Cost?
The California Auctioneer bond costs either $200 per year or $20 per month.
Who is Required to Purchase the Bond?
California requires auctioneers and auction companies to purchase a surety bond to be eligible to conduct business. To paraphrase California Civil Code 1812.610, an auctioneer is a person that publicly sells real property to the highest bidder. Likewise, an auction company is an organization that arranges for the public sale of real property to the highest bidder.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
What are the Licensing Requirements for Auctioneers in California?
California does not require auctioneers and auction companies to obtain a state license. However, auctioneers/companies may be required to obtain a local business and tax license before conducting business and should check with their local municipal authority before doing so.
What are the Insurance Requirements for Auctioneers in California?
California does not require auctioneers or auction companies to purchase any form of liability insurance, at least at the state level. However, the auctioneer’s local municipal authority may require them to do so. Auctioneers and auction companies must purchase and maintain a $20,000 surety bond.
How Do California Auctioneers File Their Bonds?
Auctioneers should submit their completed bond forms, including the power of attorney, to the Secretary of State at the following address:
California Secretary of State
P.O. Box 942870
Sacramento CA 94277-2870
The surety bond requires signatures from the surety company that issues the bond and the applicant. The surety company should include the following information on the bond form:
- Legal name and address of the entity/individual(s) buying the bond
- Designation (auctioneer or auction company)
- Surety company’s name, state of incorporation, and address
- Date and location of where the bond is signed
What Can California Auctioneers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, auctioneers and auction companies in California must ensure that they comply with all provisions set forth in California Civil Code 1812.600. Best practices for avoiding claims include:
- Not engaging in any acts of fraud
- Faithfully honoring all consumer contracts
What Other Insurance Products Can Agents Offer Auctioneers in California?
Most reputable auctioneers will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for California Auctioneer Customers?
California unfortunately does not provide a public database of active auctioneers in the state. We suggest contacting the Secretary of State to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
