What is an Insurance Broker Bond?
Insurance brokers must purchase an insurance broker bond before they can become an insurance broker. It's an agreement with the state of operation to protect clients from acts of fraud and collecting their premiums.
An insurance bond broker oversees the process of clients receiving a bond, assessing risks and finding the best coverage for their needs. Serving as an intermediary between clients and financial institutions, they have access to private financial information. An insurance broker bond is a safeguard that protects clients’ financials and personal well being.
If you're unsure whether you need a bond, you can select your state from the list below to view the bond requirements.
Why You Need an Insurance Broker Bond
An insurance broker bond is a promise that brokers will develop lawful strategies to assist their clients and abide by laws in the state of practice.
In some locations, the company holds the insurance broker bond. In other states, individual brokers must insure themselves. The surety bond protects clients from potential fraudulent acts like price manipulation, or brokers falsifying information on claims.
When claims are accurately filed and processed, clients are reimbursed for their monetary losses and the broker’s company receives compensation for their services.
What Do Insurance Broker Bonds Cost?
These bonds generally cost between 1-15% of the requirement bond amount. The percentage you must pay is based on your financial strength, e.g. personal credit, business financials, etc. You you're ready for a quote, can get a free quote on your bond now. You can also take a look at the most frequent surety bond related questions here.
Frequently Asked Questions
Apply and get approved on our website, sign the surety agreements, and we will ship the bond out. If you would like to learn more about what surety bonds are and how they work, you can read our detailed guide here.
Some states require bonds of entire insurance broker companies, which guarantee all agents. However, some states require a bond per broker or producer. State bond requirements vary, so be sure to contact each state in which you operate.
Insurance adjusters, insurance agents, surplus lines brokers and 3rd party administrators all may need to be bonded to obtain a license. It is a good idea to check with the state, as all states have their own requirements. Also, take a look at our state requirements below.
For as long as you are operating as an insurance broker and hold an active license.
You must contact us immediately, as we have a team of claim specialists here to find a resolution for you. Keep in mind, it is crucial that you work with an expert in the surety industry. Learn more about how to ensure you choose the proper bond company.
You can take a look at our full list of license and permit bonds.