Auto Dealers Jet News Scholarship

Process Server Bond Claims Guide

blogger

03-29-2022

The Process Server Bond is a security tool utilized by several states as a way to financially ensure that the certified process server (principal) has no personal interest in any legal case they become professionally involved in. In addition, the surety bond assures the state regulator (obligee) that all license regulations will be upheld. 

By providing the Process Server Bond, Jet Insurance Company guarantees restitution to any person that wrongly suffers financial losses due to the process server committing a license violation. 

With this in mind, let's go over what Process Server Bond claims stem from and the steps to be taken if one is successfully filed. 

How to Avoid Being Served a Bond Claim Notice?

As you may know, a process server's main job is to serve third parties with legal paperwork such as complaints, writs, subpoenas, warrants, etc., so it is imperative that the licensee have no interest of a personal nature in regards to the case. 

If information comes to light that the process server has a personal vendetta in a legal case that they were professionally involved in, this is grounds for a claim upon their Process Server Bond. Additionally, acts of negligence, misfeasance, or malfeasance are generally prohibited. 

The scenarios above are just a few examples of commonly prohibited acts—a review of the regulations that apply to your process server license is recommended. Further details on what is expected of you as a certified process server, as well as what not to do, can be found in your city, county, and/or state regulations. 

Who Can File a Claim on a Process Server Bond?

In most states, a claimant (an individual who has been financially damaged by the process server) is the only party who may pursue action against a principal’s Process Server Bond. 

In some cases, the obligee (governing regulator) may file a bond claim on behalf of a claimant after a complaint and investigation process has been completed, however, this is a rarity when it comes to Process Server Bonds.

Are There Limits to Claim Filings?

Yes, bond claims are limited in two ways: when a claim may be filed and how much may be paid out (for valid claims only). 

Action on a Process Server Bond can only be pursued while the bond is active. Once the bond term ends, a claim may not be filed. However, the bond’s liability window can be extended due to mandated cancellation periods—these typically last for 30, 60, or 90 days (whatever is listed on the bond form or in the state statutes). The bond will remain active until the cancellation timeline expires, and once this occurs, the bond cannot be held liable for future claims. 

Claim payouts are never to exceed the total liability of the surety bond which is represented by the bond’s limit. For instance, if the Process Server Bond amount is $10,000, the surety provider (Jet) will only pay out up to what is covered by the bond (in this case, that amount is $10,000). This applies to cases where the claimant’s losses exceed that amount. The licensee will then be liable for the remaining amount that is owed to the damaged party.

Process Server Bond Claim Process 

Certain steps must be taken before a claim can be successfully filed. Anyone who feels they have faced monetary losses due to the process server’s actions must first file a complaint with the state regulator (obligee). Once this has been done, the process server will be notified of the alleged violation/complaint and an investigation will begin. 

If the process server is unable or unwilling to resolve the valid complaint, the damaged party can either pursue a bond claim via civil action or, sometimes, the state regulator will offer to file a claim on their behalf (these options will depend on what is stated in the statutes). If the claim is found to be justified by the state court or regulator, an official claim notice will be sent to the surety provider (Jet).

Whenever Jet receives a claim notice, contact is immediately made with the principal to request further information and documentation regarding the alleged violation and the obligee’s or court’s previous proceedings. Once these details have been collected, the Jet team will conduct our own review and investigation to ensure that baseless claims don’t fall through the cracks. 

If it is determined that the claim is justified, payment will be made to the appropriate party (such claim payouts will never exceed the bond’s limit).

Unfortunately for the licensee, the bond claim process is not over quite yet. As all surety companies require, the certified process server will need to reimburse Jet Insurance Company for the claim amount that was paid to the claimant. Although “insurance” is in our name, the surety bonds we provide are more like a line of credit. So once the bond’s credit has been used, it must be paid back.  Failure to do so will lead to future difficulties in obtaining a new surety bond in the future.

Rules and regulations vary in each state, so the Jet team has provided details regarding past research completed on Process Server Bonds, as well as links to legislative documents. Please take a look at the chart below.

Bond InformationLegislative Documents
FloridaFlorida Statutes