What is a California Surplus Line Broker Bond?
Surplus line brokers fulfill an important role in the insurance industry because they offer insurance coverage for special risk situations that would otherwise have a difficult time finding coverage. To operate as a surplus line broker, a California surplus line broker bond must be secured.
Who Needs a California Surplus Line Broker Bond?
The California Producer Licensing Bureau requires a $50,000 surety bond before most surplus line brokers can attain licensing. For special lines surplus brokers, the bond requirement is $10,000.
Surplus line brokers provide insurance coverage for situations with non-standard risks that require unusual underwriting characteristics, unique risks for which standard carriers to not offer a policy, or capacity risks where an insured seeks a higher level of coverage than most insurers are willing to provide.
Why Do I Need a California Surplus Line Broker Bond?
By filling a surplus line broker bond, brokers agree to comply with the requirements of the Insurance Code of California (Chapter 6, Part 2, Division 1) and all other applicable provisions.
If the principal violates these laws or the terms of the surety agreement, any harmed parties can make a claim against the residential mortgage lender bond. Once finalized, the principal is responsible for reimbursing the surety for any damages paid or associated legal costs.
How Much Does a California Surplus Line Broker Bond Cost?
Most often, California surplus line broker bonds can be purchased for rates as low as 1%. No credit check is required, and everyone qualifies. Surplus line broker bonds remain in effect until the bond is canceled or otherwise terminated.
Get Started Today!
To operate as a surplus line broker, you must first purchase a California surplus line broker bond. Don’t delay your application.