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Cost Bond

Cost Bond

What is a Cost Bond?

A cost bond is a kind of surety bond which guarantees payment of court expenses.  They are a variety of bonds, so to truly understand what they are, it is important to understand surety bonds. Surety bonds form a contract that is legally binding, involving three parties: the principal, the obligee, and the surety. The party requesting the bond is the obligee. The party obligated to buy the bond is the principal. In the case of cost bonds, the plaintiff is the principal and the court is the obligee. The bond is backed by the surety, which is an insurance company that ensures payment of claims if the contact’s terms go unfulfilled by the plaintiff—that is if the plaintiff fails to pay.cost bond definition

Cost Bond Definition

These come into play when a nonresident of jurisdiction is involved in a court case in that jurisdiction. They are typically obtained by a nonresident plaintiff, but it is possible for one to be required of a resident as well. Individuals, as well as businesses, may obtain a bond.

When taking out these bonds, the plaintiff is essentially reassuring the court that they will pay for the costs of the litigation at the litigation’s conclusion. Those costs can include court fees and expenses related to depositions, attorneys, paralegals, and private investigations. (This is not an exhaustive list of possible expenses, and expense types vary from case to case.) The court can make a claim against the bond should the plaintiff not pay up.


The next question people often have after, “what are they?” is often, “What’s the price tag?” It depends on the state, but typically, the bond will be less than $500. The plaintiff seeking the bond will pay a percentage of the full bond amount. That percentage depends on factors such as the legal action involved and the credit history and financial health of the applicant. In short, if you have a strong financial history and healthy financials, you’ll pay a lower percentage. Poor credit history and weaker financials will lead to you paying more.

Obtaining Yours!

what is a cost bond

Compared to other types of bonds and depending on the circumstances, these bonds can be relatively easy to obtain. If you need a cost or other type of bond, Surety by NFP can help. We are a nationwide provider of bonds. To find out more or get the process started, call Surety by NFP at 855-999-7833, email, or visit our application page.

Cost Bond Definition

Surety by NFP is glad to help you learn more about any bond type you are interested in obtaining.  Our experienced and friendly team of surety professionals are here to answer any questions you may have.  If you came to this page by error, and need a generic court bond, we have a dedicated page to help you out.  We also have a probate bond page as well.  Don’t be a stranger.  We’re here to help, and guide you to the easiest bonding process imaginable.  You’ll be glad you called!

cost bond

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NFP Surety has been working in the insurance industry since 2008.

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