An appraisal management company (AMC) surety bond is needed in many states as a licensing requirement to operate an appraisal management business.
The insurance company issuing any surety bond, such as the Appraisal Management Company bond, will also be referred to as the "surety company" or the "bond company ".The business is referred to as the Principal, the surety bond company as the Obligor and the as the Obligee.
The surety company provides the Obligee a guarantee (the surety bond) that the customers, vendors, and employees of a licensed business will receive payment for financial damages due to a violation of licensing law up the bond amount stated on the bond form("penal sum"). The bond company also directly receives claims from the public and determines the validity of claims. Ultimately, the licensed business owners are responsible for their actions and required by law to reimburse the surety company for any payments made under the bond or face indefinite license suspension.