A Limitation of Liability Bond is an Admiralty Court bond necessary when the total of the claims filed against the ship exceed’s the ships value. The bond amount is set the guarantee payment of judgment and costs is if the defendant loses the case.
A surety bond protects the party requesting the bond, the Obligee, against any financial losses as a result of poor financial decisions, damages, unethical decisions, or a failure to follow state and local laws on the part of you, the Principal. The Limitation of Liability Bond holds you accountable for your decisions.
By possessing a Limitation of Liability Bond, you are telling your Obligee that you can be trusted as a Principal and that you stand behind your decisions.