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Know the Basics for Public Official Bonds

A public official bond is a surety bond — a type of bond that makes guarantees about performance. In this case, it provides a guarantee that public officials covered will perform the duties of their offices faithfully, and will comply with all relevant laws while doing so. When obtaining such a bond, public officials agree to personally indemnify, or compensate, the bond company if that carrier must pay claims on the bond. 

The bonds typically cover a variety of financial issues, including

  • fraud,
  • employee theft or embezzlement, and
  • illegal fund transfers.

City and town councils may decide to require public officials to be bonded. If so, they would enact an ordinance that requires the bond, names the amount of the bond to be used, sets any requirements for the bond company, and typically specifies that the city or town will pay the required premiums. 

Because a public official bond is individually underwritten, the public officials who apply for them must provide their Social Security number to the bond company so that it can check the applicant’s credit score. 

Managing financial controls 

When theft goes undetected for extended periods, a municipality can eventually experience significant losses. Cities and towns can benefit from financial checks and balances aimed at either preventing or detecting fraud:

  • Use background checks or verify information about employees when hiring them. Confirm their employment history and degrees, and check their references. 
  • Maintain written policies for handling theft and fraud. 
  • Avoid allowing a single person to have total control over funds. For example, have checks be countersigned, and don’t allow a person who is authorized to write checks also be someone authorized to make deposits or reconcile bank statements. 

For more information on public official bonds, contact Robert Collins, underwriting manager, at 803.933.1279 or