California Surplus Lines Broker Bond

If you want to operate as a surplus lines insurance broker in California, you have to obtain a surety bond as part of your licensing process with the state Department of Insurance. The bond amount is $10,000 for special lines’ surplus lines brokers and $50,000 for surplus lines brokers. The purpose of the bonding is to ensure your compliance with the California Insurance Code and all other relevant rules and regulations.

The bond amount that you have to post is $10,000 for special lines brokers and $50,000 for surplus lines brokers. Whichever amount you have to provide, you only have to pay a small percentage of it, called the bond premium. Applicants with strong finances typically cover 1%-5% of the bond amount.

What factors affect your surety bond cost? When you apply with a surety, it has to take a close look at your personal and business financials to assess the level of bonding risk. It examines your personal credit score, business finances, liquidity and assets, and even your professional experience. The more stable these criteria are, the lower your bond price is likely to be.

With Lance Surety Bonds you can get bonded even if you struggle with a low credit score, tax liens, bankruptcies, or civil judgements. Applicants with financial issues can use our Bad Credit Surety Bonds program.

Because of the higher bonding risk the premiums are in the range of 5% to 10%. Due to our exclusive partnerships with a number of A-rated, T-listed surety companies, we are able to offer you a top bonding rate even if you have bad credit.

Our How to Get Bonded page is an extensive resource that you can consult for further details about the bonding process.

For further questions, Lance Surety Bonds’ experts are here to help. You can contact us at (877) 514-5146.

If you do not follow your obligations under the California Insurance Code, you can end up with a claim against your surety bond. This is how it can serve as a security mechanism, providing a fair reimbursement to harmed parties.

The maximum compensation that claimants can seek is the bond amount you have posted. As per the bond indemnity agreement, your surety may cover the costs on proven claims initially, but you have to repay it afterwards. Claims can harm both your finances and your reputation, so it is best to avoid them as much as possible.