Insurance Broker Bond in North Carolina Explained
Insurance brokers in most states have to get licensed with their respective authorities in charge of regulating the trade. This applies for brokers in North Carolina as well. As a part of the process, you have to provide an insurance broker bond.
The purpose of the bonding requirement is to ensure that your business will comply with all applicable rules and regulations. It protects the state and your customers against potential illegal activities you may engage in as an insurance broker.
Your surety bond functions as a contract between three parties. Your money transmitting company is the principal. The NC Department of Insurance is the obligee that requires the bond. The surety is the third entity that provides the bond and backs your business.
Questions about Insurance Broker Bonds in North Carolina
When do I have to obtain this bond?
All parties that want to operate as insurance brokers in North Carolina have to undergo the licensing with the state Department of Insurance.
Getting bonded is one of the indispensable requirements you have to meet. The bond amount is $15,000, and you should provide the bond in the official bond form. Its goal is to guarantee your compliance with the applicable North Carolina General Statutes.
What is the NC insurance broker bond cost?
In order to obtain a NC insurance broker license, you have to post a $15,000 surety bond. This is the required bond amount. The bond cost that you have to cover to get bonded, however, is different. It is called the bond premium and is a fraction of this amount. For applicants with stable finances, the typical rates are between 1% and 5%.
Your surety bond cost is determined on the basis of a number of factors. The surety that you apply with examines your personal and business finances to determine the level of bonding risk that you pose.
The most important criteria for the bond cost formation include your personal credit score, business financials, and assets and liquidity that you can showcase. The more solid your profile is, the smaller your bond price is likely to be.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|NC insurance broker bond||$15,000||$112.5-$225||$150-$375||$375-$750||$750-$1,500|
Can I obtain this bond with problematic finances?
It is possible to get bonded even if you have bad credit. We operate our Bad Credit Surety Bonds program for applicants with low credit scores, tax liens, bankruptcies, and civil judgements. If you’re struggling with such issues, this program is made for you.
You can expect to pay about 5%-10% bond premium, which is needed in order to compensate for the higher bonding risk. With Lance Surety Bonds, however, you always get top rates. Since we collaborate with numerous A-rated, T-listed surety companies, we are still able to offer you great bonding prices.
How do I get bonded?
Would you like to learn the nitty-gritty details of how the bonding process works? Don’t hesitate to consult our in-depth How to Get Bonded page.
Our bonding experts are here to help as well. Just call us at (877) 514-5146, and we will assist you with your questions or your application form.
How are bond claims handled for insurance brokers?
The surety bond that you obtain to get licensed as a NC insurance broker does not protect your business. Instead, it safeguards the interests of the general public and the state in which you operate.
This means that if you transgress from your legal obligations, you may end up with a claim against the bond. This is the mechanism through which harmed parties can seek a fair compensation.
The maximum reimbursement that can be demanded on your bond is $15,000, the amount that you’ve posted. Initially, your surety may cover the claim costs for proven cases. However, you are liable to repay if afterwards, as this is set in the bond indemnity agreement.
Thus, it’s best to avoid situations that can lead to claims, which may be costly and harmful to your business.