Insurance Broker Bond

State and local governments require insurance brokers to have insurance broker bonds to ensure that their practices are ethical and operate according to the law. These specialized bonds protect both consumers and the general public against fraud and unethical behavior on the part of the broker. The bond protects against predatory practices such as:

• • Using inflated or false quotes to increase profit
• • Coercing consumers to purchase inappropriate insurance products
• • Encouraging customers to misrepresent themselves on insurance applications
• • Encouraging customers to misrepresent their financial situation on insurance applications

The insurance broker bond also protects companies that provide brokers with insurance products. Since the broker acts as an intermediary between the insurance company and the consumer, the company needs to know it receives payment for its products. Insurance brokers often sell many different “brands” of insurance, and the bond reassures each insurance supplier that it will receive the money collected by the broker.

Insurance Broker Bond prices are typically based on an application process, credit score, a thorough financial check, and the financial stability of the broker. The insurance broker must be able to cover the face value of the bond since the broker could potentially have to pay the whole amount if a valid claim is ever filed against the bond. Bond values are usually based on the volume of business the broker performs or expects to perform.

Application Information

Complete the Commercial Application to get started. Please note: in addition to our commercial bond application, we may need to request the business and personal financial statements of the owner(s) and copy of any statute or ordinance that’s requiring the bond and/or a bond form.