A bail bond agent, or bondsman, is any person or corporation which will act as a surety and pledge money or property as bail for the appearance of a criminal defendant in court. Although banks, insurance companies and other similar institutions are usually the sureties on other types of contracts, for example, to bond a contractor who is under a contractual obligation to pay for the completion of a construction project, such entities are reluctant to put their depositors’ or policyholders’ funds at the kind of risk involved in posting a bail bond. Bail bond agents, on the other hand, are usually in the business to cater exclusively to criminal defendants, often securing their customers’ release in just a few hours. Bail bond agents are almost exclusively found in the United States. In most other countries bail is usually more modest and the practice of bounty hunting is illegal.
The first modern bail bonds business in the United States, the system by which a person pays a percentage to a professional bonds agent who puts up the cash as a guarantee that the person will appear in court, was established by Tom and Peter P. McDonough in San Francisco in 1898.
Bond agents have a standing security agreement with local court officials, in which they agree to post an irrevocable “blanket” bond, which will pay the court if any defendant for whom the bond agent is responsible does not appear. The bond agent usually has an arrangement with a bank or another credit provider to draw on such security, even during hours when the bank is not operating. This eliminates the need for the bondsman to deposit cash or property with the court every time a new defendant is bailed out.
Bond agents generally charge a fee of 10% of the total amount of the bail required in order to post a bond for the amount. This fee is not refundable and represents the bond agent’s compensation for his or her services. As the practice of paying a 10% cash premium for a bond became widespread, some courts have recently instituted a practice of accepting 10% of the bond amount in cash, for example, by requiring a $10,000 bond or $1,000 in cash. In jurisdictions where the 10% cash alternative is available, the deposit is usually returned if the case is concluded without violation of the conditions of bail. This has the effect of giving the defendant or persons giving security for the defendant a substantial incentive to make the cash deposit rather than using a bail bond agent.
For large bail amounts, bond agents can generally obtain security against the assets of the defendant or persons willing to assist the defendant. For example, for a $100,000 bond for a person who owns a home, the bond agent would charge $10,000 and take a mortgage against the house for the full penal sum of the bond.
If the defendant fails to appear in court, the bond agent is allowed by law and/or contractual arrangement to bring the defendant to the jurisdiction of the court in order to recover the money paid out under the bond, usually through the use of a bounty hunter. The bond agent is also allowed to sue the defendant for any money forfeited to the court should the defendant fail to appear.
In most jurisdictions, bond agents have to be licensed to carry on business within the state. Several unusual organizations often provide bail bonds. For example, AAA (the American Automobile Association) offers a bail bond service to its members who are jailed for ordinary traffic offenses to prevent law enforcement officials from threatening lengthy remand periods before trial if the alleged offender does not plead guilty at arraignment.
Four states—Illinois, Kentucky, Oregon, and Wisconsin—have completely banned commercial bail bonding, usually substituting the 10% cash deposit alternative described above. However, some of these states specifically allow AAA and similar organizations to continue providing bail bond services pursuant to insurance contracts or membership agreements.
The use of surety bonds has increased over the last decade, even as various agencies have sought to find alternatives. The efficacy of both measures is controversial. 
The economically discriminatory effect of the bond system has been controversial, and subject to attempts at reform since the 1920s, at least. See, e.g., Frank Murphy’s institution of a bond department at Detroit, Michigan’s Recorder’s Court.
1. ^ Liptak, Adam (2008-01-29). “Illegal Globally, Bail for Profit Remains in U.S.”, U.S., The New York Times. Retrieved on 2008-01-29.
2. ^ “Pete McDonough obituary” (1947-07-10), pp. 10.
3. ^ State Court Processing Statistics, 1990-2004 Pretrial Release of Felony Defendants in State Courts, U.S. Department of Justice, Office of Justice Programs, Bureau of Justice Statistics, Special Report.
4. ^ Mavea, Gary, Michigan Lawyers in History–Justice Frank Murphy, Michigan’s Leading Citizen, Michigan Bar Journal.
* F. E. Devine, Commercial Bail Bonding: A Comparison of Common Law Alternatives (New York: Praeger, 1991) ISBN 0275937321.