posting a bond
Definition
Posting a bond means providing a financial guarantee, usually through a bonding company, that you will fulfill a specific legal or contractual obligation. If you fail to meet that obligation, the bond money gets paid out to whoever you owe, and then you have to repay the bonding company. Think of it as a safety net that protects the other party while putting your own money on the line.
Example
A contractor might be required to post a bond before starting a big construction project, so the building owner knows they will be compensated if the contractor walks off the job or fails to finish the work.
Watch Out
Bonds are not the same as insurance because if the bond pays out due to your mistake, you are personally responsible for paying that money back to the bonding company.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.