Insurance Broker Bond
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Insurance Broker Bond Information
Insurance broker bonds are finance license bonds that guarantee that insurance agents and brokers will follow state mandated rules. This bond is needed for insurance companies, brokers, and agents in order for them to obtain an insurance broker license. Because giving out personal information to insurance agents can be risky to some people, this bond will allow them to rest assured that they are receiving a fair policy at all times. Insurance brokers will be unable to five inflated quotes to increase profit, or to force buyers to purchase inappropriate plans. It also protects the buyer from the risk of being coerced into misrepresenting themselves on any documents.
The prices of insurance broker bonds prices are based off of a portion of the total bond amount. Some states might require insurance broker bonds for entire insurance companies, which guarantee all agents. Some states might also require a bond per broker per producer. State bonds tend to vary, so interested parties should make sure they check with their state agency before they make a decision on a bond.
Insurance adjusters, insurance agents, surplus lines brokers and third party administrators all may need to be bonded in order to obtain a license. Again, because all states have different policies or regulations, it is a good idea to check with the state office to see what must be purchased.
Insurance broker bonds must be held as long as the broker is in business in order to maintain an active license.