A cost bond is a kind of surety bond that guarantees payment of court expenses.

Generally speaking, surety bonds form a legally binding contract, 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. With 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 contract’s terms go unfulfilled by the plaintiff (if the plaintiff fails to pay).

Cost Bond Definition

These come into play when a nonresident of a particular 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 once the case is decided. Those costs can include court fees and expenses related to depositions, attorneys, paralegals and private investigations. 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 “that’s the price tag?”.

Price 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 mean you will likely have to pay more for your bond.

Obtaining your cost bond

Compared to other types of bonds and depending on the circumstances, cost bonds can be relatively easy to obtain. If you need a cost or other type of bond, NFP can help. We are a nationwide provider of bonds. To find out more or get the process started, contact us today.

NFP helps clients learn more about any bond type they are interested in obtaining. Our experienced and friendly team of surety professionals is here to answer any questions you may have. We’re here to help and guide you through the bonding process.