Insurance Broker Bond Information
An insurance broker bond is a type of license and permit bond which guarantees that insurance brokers account for insurance premiums they collect. It also guarantees that they will develop risk mitigation strategies faithfully and in accordance with state laws and regulations. The insurance broker bond protects individuals who may be harmed by the actions of a licensed insurance broker. It is required by the state department of insurance upon applying for a new insurance broker license and throughout the duration of the license. Cases in which a new claim can be filed against an insurance broker bond include:
- Collecting premiums for non-existent insurance policies
- Manipulating insurance rates and collecting higher premiums
- Misleading clients to get new insurance policies they do not need
- Encouraging clients to lie about personal details in insurance applications
- Encouraging clients to conceal and misrepresent their personal financial status in insurance applications
If a claim is filed and proven to be valid, the individual or business may be reimbursed for the amount of financial losses and other consequences. In some situations, the larger insurance company that a broker represents is guaranteed payment for its products.
Are Insurance Agents Bonded?
Insurance broker bonds are relevant to insurance brokers or insurance agents, insurance adjusters, surplus lines brokers, and others. Furthermore, depending on the state you are based in, you may either have to get an insurance broker bond which covers the whole agency (and includes all individuals) or have each individual bonded separately.
Insurance Broker Bond Cost
Most states require insurance brokers bonds to be between the price of $10,000 and $20,000. Insurance broker bonds costs and requirements vary greatly as the insurance broker bonds amounts and regulations surrounding each license are established on state level. Most states have laws that require insurance brokers to get bonded before they can be licensed. Always make sure to call and check with your states department of insurance to know what kind of bond you need! Insurance broker bonds are considered relatively low risk by a bonding company when bonding companies compare them against other commercial surety bonds due to the states very strict licensing requirements. Because of this rates are good, and vary very little between each surety company. But not everyone will be accepted in the standard market. If, due to your credit report, you do not qualify for the standard market, we can offer you an insurance broker bond through our special bad credit surety bond program.
Learn More About Insurance Broker Bonds
State governments often require bonding as a prerequisite to licensing. The following states have the following bonding requirements for insurance brokers that need to be met:
- California- The California Producer Licensing Bureau requires that insurance brokers need to post $10,000 surety bonds prior to conducting business in the state of California.
- Georgia- The Georgia Commissioner of Insurance states that they require insurance counselors to submit a $5,000 surety bond amount to qualify for an insurance agency license in the state of Georgia.
- Illinois-Illinois insurance producer bonds are required by the state of Illinois Department of Insurance in an amount of $2,500 or 5% of the total premiums brokered in the past year, whichever is greater. The required bond amount is not to exceed $50,000.
- New Mexico- Non-resident insurance brokers in New Mexico are required to post a surety bond by the Insurance Division of the New Mexico Public Regulation Commission before commencing business operations in New Mexico. The required amount of this bond varies to qualify for a new insurance agency license in New Mexico.
- North Carolina- Insurance brokers must post a surety bond in the amount of $15,000 before commencing business operations in the state of North Carolina, as required by the North Carolina Department of Insurance.
- Oklahoma-The Oklahoma Insurance Department states that they require a $5,000 surety bond for life or accident and health insurance brokers in the state of Oklahoma.
- South Carolina- Insurance brokers must post $10,000 surety bonds to qualify for an insurance agency license in the state of South Carolina as required by the South Carolina Department of Insurance.
- Texas-Insurance agencies must post $25,000 surety bonds to qualify for an insurance agency license in the state of Texas, as required by the Texas Department of Insurance
Pay a Low Rate for Your Insurance Broker Bond
ACS offers the most competitive rates, free quotes, quickest turnaround times, and ease of doing business . No other broker has positioned themselves like we have in the industry. Surety bond brokers will advertise these services, but they cannot match what ACS is able to accomplish. The bottom line is that ACS offers the best surety bond experts, years of experience, and number of surety bonding companies represented. We hope you will stop and consider this information in making the call in doing business with us. We have been doing surety business, and only surety business since 1998! Our active clients continually give us positive remarks as being one of the best. Why is ACS considered the best? Because of our pricing, the simplicity of our online application process. Affordable pricing is an avenue that we optimize with our large book of surety companies, which enables us to obtain the best pricing. Smaller brokers cannot offer these types of rates at affordable surety bond prices. Not every broker is the same. Years of experience, seasoned employees, and the ability to access some of the largest surety bond companies in the industry set us apart.
Enjoy Fast, Easy & Accurate Bonding Services
We are a reliable surety bond broker. A great surety bonding broker starts with the right people. The right people employ the right tools online and offline to help make it easy for customers to get a bond quote fast. ACS is one of the leaders in the country in placing surety bonds. We have placed thousands of new surety bonds for our customers. Our network of surety companies is one of the best. Being a front leader in placing surety bonds has produced positive results, and along the way we are able to be a preferred vendor to our clients.