For those who are new to the term ‘bail bond’, here is what you need to know about bail bonds. In short, it is a surety bond that acts as a safety net for defendants, allowing them to be released from jail until their trial dates. In the event that the defendant is unable to pay the bail amount set by the court, they will usually seek help from a bail bondsman. On the basis the defendant pays 10% of the bail amount, the bail bondsman will secure the other 90%, normally in the from of a collateral. In the event that the defendant does not appear for their trial dates, the remaining 90% will need to be paid. However, if the defendant attends as promised, the bail bond is then dissolved. The bail bondsman will keep his 10% cut.

It is important to understand that while Bail Bonds are only practiced in the US and Philippines, each state has its own bail bond system. In some states, such as Kentucky, commercial bail bonding has been completely banned. The bail bond systems biggest criticism in recent times, is its discriminatory nature towards the lower income households in the US. Thousands of people are held in jail because they cannot afford to scrape together 10% of their bail amount – this will depend on the size of the bail, which is set at the judge’s discretion, but the same principle applies across the board. Has this had a negative impact on the already problematic mass poverty levels across the states? It’s difficult to measure, but there are arguments for both sides here.

From an underwriter’s perspective, bail bonds are very risky, and become increasingly risky based on the following factors: creditworthiness, personal and family life. The size of the bail and severity of crime will also impact the decision of a prudent insurer. Please note, while it could be argued a bail bondsman provides security and surety to a defendant until their trial date, they are incentivized by the profits for successful cases. Therefore, it’s unlikely that a bail bondsman will be available for minor crimes, where profitability potential doesn’t exceed $10 or $20. This means that there is an increasing amount spent on jail fees to hold defendants who have committed minor crimes, rather than those who have committed higher crimes and have higher bail amounts.

So what’s the big deal with leaving a loved one behind bars? A defendant, whether guilty or not, will have family and loved ones most of the time. Holding a defendant in jail if they or their family cannot afford to pay 10% (or 15% in some cases) of the bail amount, could have a negative effect on their mental and physical well-being. I’m sure you’ll agree that it seems ‘unfair’ for a bail bondsman to retain 10% of the premium in the event the defendant is proven not guilty. This could lead to relatives being forced to turn to loans as a solution to pay down the original 10%, deepening the already alarming debt and poverty levels across the US. From summer 2018, tech giants Facebook and Google banned the advertisements of bail bonds, as they stated it is an exploitative industry, preying on low-income households. On any given day, in the US, approximately two-thirds of people in local jails are awaiting trials, because they can’t afford to pay their bail or pay 10% of their bail to a bail bondsman.

There are positives to the bail bonds system. After all, would it still exist in some states if it were not deemed effective? In theory, the bail is designed to mitigate the risk of a criminal failing to show up to court hearings, and ultimately evading the legal process. A bail bond allows the defendant some ‘breathing space’, and provides a level of certainty for the court, in that they are covered (by the bail amount) in the event the defendant does not appear on the required date.

What does the future hold? Is a more suitable system the pre-trial justice system? This could kick start the end to poverty in the US. It might be time for the remaining states to abolish the bail bond system, which pushes many into crippling debt, and leaves low income criminals, whether innocent or guilty, held in jails purely due to lack of funding.