Insurance Brokers Bond

Insurance Broker Bonds are a mandatory aspect of life as a broker. These bonds are requirements in all states and are typically filed with the state's Insurance Department. New and existing brokers cannot obtain or renew their license without proper bonding.

What they are?

Surety bonds are not insurance.Surety bond is actually more like a form of credit. Insurance Broker Bonds provide financial protection for the state and for consumers in the unlikely event that a broker acts in an illicit or illegal manner. Consumers who are negatively affected by a broker can file a bond claim and recoup damages.

How they work

Brokers purchase surety bonds from a surety company, an insurance company or some other entity that issues these specialized bonds. The state acts as the obligee, or bond holder, and is insulated against any financial harm. Once the broker files an Insurance Broker Bond, the state can issue a license - in essence, the bond helps ensure the broker follows all applicable laws and regulations.