A supersedeas bond is a type of surety bond required when a court case is being appealed and there is a financial judgment involved. Also known as an appeal bond, a supersedeas bond is intended to prove that the losing party can and will pay the judgment as well as court costs, attorney’s fees, and interest.
The cost of an appeal bond, or supersedeas bond, is typically a percentage of the surety bond's total coverage amount. Depending on the size of the bond required, you may need to provide collateral in addition to a premium. It's very common for insurance carriers to require a 100% collateral pledge in addition to a 1% – 2% premium to issue a supersedeas bond.
If you go to court and lose your case, the court may award a judgment, which is money you need to pay the other party. If you choose to appeal the case, you may get a supersedeas bond to postpone paying the other party until the entire appeals process is exhausted. In American courts, getting a supersedeas bond is often required before you start the appeal.
A supersedeas bond guarantees the winning party will receive the financial judgment. If you don’t pay the judgment ordered by the court, the other party can make a claim on the bond and you must reimburse the surety company in full. If you don’t have a supersedeas bond, the other party may try to collect the judgment before the appeals process is over.
Supersedeas bond rules vary according to state and case specifics. In Arizona, a supersedeas bond may be filed except in cases involving the custody of children. New Jersey and Delaware do not require a supersedeas bond before starting the appeals process, but the losing party may delay payment by making a motion with the superior court, which can require a bond or cash deposit.
While usually in the amount of the original judgment, the court could require the bond to be significantly larger. Such bonds are intended to cover the judgment, interest, court costs, and attorney’s fees incurred during the appeals process.
Some states have specific rules on the value of supersedeas bonds, like California, which requires them to be 150% of the judgment. In Florida, the amount of the bond may include two years of statutory interest and be limited to no more than $50 million per appellant. Texas requires the amount of the supersedeas bond to be equal to the judgment, interest, and court costs, but cannot exceed 50% of the judgment debtor’s net worth or $25 million, whichever is less.
A supersedeas bond remains in effect until the case settles and the judgment is paid.