Bail Bonds

While over an estimated 600,000 people enter prison in the United States annually, more than 10 million go to jail. This is because 70% of people incarcerated in local and county jails are not there because they have been convicted of a crime, but because they cannot afford to pay bail. The $2 billion money bail industry is increasingly one of the most important contributors to the U.S. mass incarceration system. Between 1999 and 2014, the pre-trial population accounted for 99 percent of the increase in the U.S. incarceration rate. Similar to the rest of the criminal punishment system, the bail industry profits from defendants and their families who are disproportionately people of Color and low income.

In 2015, for-profit bail companies posted $14 billion in bail. According to a 2016 ACLU report, there are nearly 30,000 bail agencies in the U.S., as of November 2016. These companies are mostly private, localized companies. There are nine insurance companies that back the majority of these for-profit bail companies, including global insurance companies like Tokio Marine and Fairfax. There are also private insurance companies, such as American Surety Company and AIA.

The main companies involved in this sector are:
Accredited Surety and Casualty Company, Inc., subsidiary of Randall & Quilter Investment 
Holdings Ltd., of Hamilton, Bermuda (LSE: RQIH)
Fairfax Financial Holdings Limited, of Ontario, Canada (TSX: FFH)
Tokio Marine Holdings, Inc., of Tokyo, Japan (TSE: 8766)
Action Immigration Bonds and Insurance Services, Inc. of Fort Lauderdale, FL (Private)
American Surety Company, of Indianapolis, IN (Private)
Allegheny Casualty, International Fidelity, and Associated Bond, of Calabasas, CA (Private)
Bankers Financial Corporation, of St. Petersburg, FL (Private)
Endeavour Capital, of Portland, OR (Private)
Lexington National Insurance Corporation, of Baltimore, MD (Private)
Libre by Nexus, of Harrisonburg, VA (Private)

What is Bail?

When a person is arrested, a court may determine to release them under certain conditions while the case proceeds through the court system. Money bail is a common condition for pretrial release in the United States, aimed to make sure the individual shows up to court appearances. In 2017, the national median for bail for a felony arrest was $10,000, although some states like California have a median as high as $50,000. If the bail is paid directly to the court, and the person is eventually found not guilty of the crime, the bail amount is returned to that individual. However, most individuals in the U.S. cannot afford to pay their bail amount up front.

If the person cannot pay the full bail amount, they might be made to stay in jail for as long as it takes for the case to clear the system, which could take weeks or years, in such cases, the person’s chances of being found guilty increase significantly. In New York, one study found that a person’s likelihood of being found guilty of a crime increased from 52 to 94 percent if they remained in jail during the process. Alternatively, the person can have a for-profit bail bonds company pay the bail.

For-profit bail companies typically require the arrested individual to pay ten percent of the total bail. If unable to pay that amount, the bail company will set up a payment plan. Unlike directly paying the courts, if the arrested individual is found not guilty, they are still required to continue paying the for-profit bail company.

According to a 2017 ACLU report, a typical contract signed between a for-profit bail company and the arrested individual also includes provisions that allow the bail bonds company to conduct searches without warrants, vehicle tracking, and digital surveillance. The person submits to covering all of the costs associated with the bail. There are many reports of extortion, sexual coercion, and corruption of bail bondsmen. In 2017, the Southern Poverty Law Center sued four bail bonds agencies in New Orleans for “abusive and exploitative actions,” including kidnapping and extortion. In Washington, a bondsman was sued for shooting the mother of an arrested individual. In West Virginia and North Carolina, several bondsmen were arrested and charged with sexual assault.

Insurance Companies Back Bail Bond Companies

For-profit bail companies are backed by insurance companies. According to the ACLU, bail is a type of surety bond, which is different than other types of insurances, like car or home insurance. Surety bonds guarantee to a third party, in this case the courts, that the person seeking bail, the defendant, would appear in court. In case the defendant does not appear in court, a surety bond relieves the insurance company of any responsibility, requiring the defendant, or his or her family, to cover all costs.

When a person signs with a for-profit bail company, the bail agents pay a percentage of the premium they charge, typically 10%, to an insurance company. Insurance companies, indemnified of any responsibility, make money without the risk of paying bail. In 2013, Allegheny Casualty, International Fidelity, and Associated Bond (AIA), a privately-owned bail insurance company, reported that throughout the insurance company’s 107 year history, they have not paid for bail once. Bail insurers have also stated that losses are not necessarily losses, but “that losses are mostly a timing issue and are usually recouped."

Bail Regulations and Reform

In 2014, a report issued by the New Jersey State Commission of Investigation stated that “the [bail] system is dominated by an amalgam of private entrepreneurs who profit from the process but are subject to weak controls easily manipulated or ignored with little or no consequence.” The report, which referred to the regulation of the bail industry as “diminished and archaic,” led to sweeping bail reform in New Jersey. In January 2017, New Jersey introduced new regulations that virtually eliminate money bail. According to the Pretrial Justice Initiative, which ranked New Jersey with an “A” on pretrial justice in November 2017, the number of people in jails in New Jersey had decreased by over twenty percent.

In May 2017, California lawmakers introduced legislation to ensure pretrial detainees were not in jail solely because they were unable to pay their bail. The legislation was introduced after California Department of Insurance arrested thirty bail agents from seven bail agencies for corruption, illegal business practices, and illegal solicitation in 2015.

There is also reform underway in Colorado, Virginia, Delaware, West Virginia, and Hawaii. Each state introducing legislation to limit the use of money bail for defendants who are not considered a threat. Illinois, Kentucky, Oregon, and Wisconsin do not allow for-profit bail companies. In 2005, Oregon introduced an automated reminder system and the failure-to-appear incidents decreased by 31 percent and saved over $155 million each year. At the same time, one county in Colorado started calling defendants to remind them of court dates, bringing the failure-to-appear incidents down to eight percent.


The reform taking place is also being met with heavy pushback from the bail industry. In 1992, the for-profit bail industry formed the American Bail Coalition (ABC). ABC is a member of the American Legislative Exchange Council (ALEC). ALEC is organization of public and private sector representatives who draft legislation. ALEC has drafted many tough-on-crime bills that have resulted in more profits from the prison industry.

The ABC has referred to ALEC as a “life preserver.” ALEC and ABC have introduced laws in at least fourteen states, promoting and passing twelve between 2005 and 2010. These laws include expanding the list of crimes that require the defendant to post bail and introducing post-conviction bond laws. Additionally, ABC and ALEC have also passed laws that have helped bail agencies avoid paying debts. In 2016, the ABC Board Chair served as the ALEC Private Enterprise Advisory Council Chairman.

In Florida, after ABC donated to the county commissioners, one county cut pretrial alternatives to bail. In Connecticut, where reform was underway, ABC was able to stop the government from eliminating bail for misdemeanors. In New Jersey, “Dog the Bounty Hunter,” a bail bondsmen who had a television show on A&E, is suing Governor Chris Christie for the bail reform, which “Dog” argues caused the death of a New Jersey resident.

Immigrant Bail Bonds

An immigration bond is a monetary payment that secures the release of a detained person from the custody of Immigrations and Customs Enforcement (ICE) on the condition that the person attends their court appearances and complies with the orders of the immigration judge. The stakes of immigration bonds are high because those who are able to post bond can more easily secure legal representation to defend their deportation cases. Unlike in the criminal punishment system, immigrants facing deportation do not have a right to legal counsel because unlawful immigration status is classified as a civil rather than criminal offense. Immigrants in detention have a hard time finding legal representation because of communication barriers with the external world and the shortage of attorneys willing to represent them. Detained immigrants also have less time to prepare their legal defenses because their cases are fast-tracked in immigration courts. In contrast, immigrants released on bond are more likely to obtain legal representation and have more success obtaining relief from deportation. According to a September 2016 study, only 14 percent of detained immigrants acquired legal counsel, compared with two-thirds of non-detained immigrants.

The immigration bond system operates like this: After ICE arrests and processes an immigrant, agency officials decide whether the person is eligible for bond and set a bond amount. The arrested person can also petition for a custody hearing before an immigration judge, who can set, affirm, or change the bond amount. Immigrants convicted of certain criminal offenses and those who have been deported in the past are ineligible for bond and subject to mandatory detention. In 2016, 46.2 percent of detained immigrants were denied a custody hearing. At their custody hearings, arrested persons must prove to the immigration judge that they merit bond because they a) do not pose a danger to the community, and b) are not a flight risk. Immigration judges exercise broad discretion and determine the bond amount based on a number of factors, including employment history, criminal record and arrests, family ties to the U.S., history of immigration violations, mode of entry into and length of stay in the U.S., and whether the individual has paid taxes. Unlike bonds set by judges in the criminal punishment system, immigration judges, in almost every court, are not required to consider an individual’s financial situation or resources when setting bond.  In 2018, 47.8 percent of detained immigrants with custody hearings were granted bond. 

By statute, immigration bonds are set at a minimum of $1,500 with no maximum. In 2018, the median bond amount was $7,500, though community bond funds have documented immigration bonds as high as $250,000. Data obtained by the Transactional Records Access Clearinghouse suggests that bond amounts vary dramatically depending on the detainees’ nationality, court location, and the judge hearing the case. Moreover, legal advocacy groups have argued that under the Trump administration, ICE officers and Immigration Judges are setting higher bond amounts than they did under the Obama administration. This is resulting in more immigrants remaining incarcerated, as well as more immigrants being squeezed into debt and poverty as a result of having to repay high bond amounts. In 2016, the ACLU filed a class-action lawsuit against the federal government for setting excessive bonds for detained immigrants. 

There are two ways to be bonded out of immigration detention: cash bonds and surety bonds. According to the ICE Bond Management Handbook published in 2014, roughly 90% of the bonds issued by ICE are secured by cash. In the case of cash bonds, a friend, family member, or third-party pays ICE the full bond amount. The “obligor” who posts the bond must be at least eighteen years old and have legal immigration status. This requirement makes it difficult for people who do not have strong familial or community networks in the United States to be released from immigrant detention – a gap that is being filled by community bond funds. After the detainee’s removal hearings conclude and he or she has either obtained legal status or been deported, the bond is cancelled and the amount is refunded to the obligor. If the person does not satisfy terms of release, ICE declares the bond breached and the cash payment is forfeited to the U.S. government. 

Alternatively, those who cannot afford cash payment can be bonded out through a “surety bond.”  Surety bond contracts are struck between the Department of Homeland Security, a specific type of insurance firm called a “surety company,” a bail agent, and a co-signer who is typically a friend or family member of the detainee in question. The surety company underwrites the bond and shares liability with an immigration bail agent, who liaises with communities on the ground and posts the bond on the surety company’s behalf. The surety company and bail agent guarantee to DHS that the detainee will make court appearances and pledge to pay the full bond amount plus interest and penalties if the terms of bond/release are breached. In return, the co-signer typically pays the surety company and bail agent a 15-20 percent non-refundable premium, posts collateral in the form of property or credit card balances, and assumes responsibility for ensuring the detainee makes court appearances. Most surety contracts also stipulate that the co-signer will pay the full bond amount if the detainee violates the terms of release. Hence, under the surety bond system, it is the friends and family of detainees – not the surety company or bail agent – who assume most of the monetary risk.

The universe of immigration bail bond companies is much smaller than the universe of criminal bail bond companies. Immigration bail bonds are viewed as riskier than criminal bail bonds, and bail agents usually need additional insurance and licensure to underwrite immigration bonds. However, there is some indication that the immigration bail bond industry is poised for growth as some states are pushing to ban or heavily curtail the practice of money bail within the criminal punishment system, traditional bail bond companies at the local and state levels are venturing into the immigrant bond industry. One of the companies that best exemplifies the problems inherent in the immigrant bail industry is Libre by Nexus (LbN). LbN  is not a bail bond agency or surety insurer itself, but an intermediary in the system. LbN directly targets individuals in ICE detention and offers to secure their bond via a certified bail bond agency. Instead of requiring the detainee to post collateral such as a cash or property, - as is commonly done with traditional bail bonds in the criminal punishment system - Libre by Nexus requires the detainee to pay $420 a month for an electronic monitoring device that monitors their movement 24/7. Compared to cash-bail immigrant bonds that ICE requires to be paid in full and regularly range in the tens of thousands, Libre by Nexus’ monthly fees offer an alternative to often desperate people and their families. However, on top of the monthly fee, detained asylum seekers or immigrants must pay a series of non-refundable installation, processing, and security deposit fees that can add up to $4,000 dollars and sometimes will exceed the original bond cost. None of these fees or monthly rental costs are directed to paying off the bond. If an individual fails to pay the monthly fee or “breaks the contract” in other ways, Libre by Nexus will prompt “licensed recovery agents,” i.e. bounty hunters/ICE, to return them to detention. As of April 2018, Libre by Nexus has faced a federal probe, three state investigations, and a number of allegations and lawsuits by immigrants claiming the company misled and deceived them. 

Like in the traditional bail bond industry, immigrant bond agencies require insurance companies to underwrite bonds and guarantee to ICE that the full value of the bond can be paid if the individual does not fulfill the obligations of the bond. 

More Information about Publicly-Traded Companies

A Canadian insurance management and financial holding company. One of the largest bail insurance companies owning multiple bail insurers that provide surety bonds to bail bonds companies.

A British investment holdings company. One of the largest insurance companies providing surety bonds to bail bonds companies.