What Is a Yacht Broker Bond?
In a number of states, yacht brokers are required to get bonded prior to conducting their legal operations. Depending on your location, you may need to post such a license bond in order to obtain a yacht broker license.
Why do you need this bond? Besides a licensing prerequisite, your yacht broker bond aims to safeguard the interests of your customers. In case you transgress from your legal obligations, a harmed party can file a claim against your bond. This is how they can seek a fair compensation for any damages.
The surety bond works like a contract between three parties. Your yacht brokering business is the principal. The obligee is the license-issuing state authority. The third entity is the surety that provides you with the bond.
Questions about Yacht Broker Bond
Which states require yacht brokers to get bonded?
The Florida Department of Business and Professional Regulation requires yacht and ship brokers to obtain a $25,000 surety bond.
In California, yacht and ship brokers have to get a $15,000 surety bond and present it to the state Resources Agency’s Department of Boating and Waterways.
Maryland yacht brokers have to get a $20,000 bond for the first year of their licensing. Afterwards, the bond amount ranges from $5,000 to $200,000, depending on the annual volume of sales.
What is the bond price?
The surety bond cost that you have to pay is only a fraction of the required bond amount. It is called the bond premium and is set on the basis of your personal and business financials. If your finances are in good shape, the typical rates are between 1% and 5%.
The factors that affect your bond price include your personal credit score, as well as business financials, liquidity and assets, and professional experience. The surety examines these criteria to judge how risky it is to get you bonded. The more stable your profile is, the smaller your bond premium would be.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|California Yacht Broker Bond||$15,000||$112.5-$250||$150-$375||$375-$750||$750-$1,500|
|Maryland Yacht Broker Bond||$20,000||$150-$300||$200-$500||$500-$1,000||$1,000-$2,000|
|Florida Yacht Broker Bond||$25,000||$187.5-$375||$250-$625||$625-$1,250||$1,250-$2,500|
What if I have bad credit?
Even if your finances are not perfect, you can get bonded with us. Lance Surety Bonds operates its Bad Credit Surety Bonds program for applicants with low credit scores, tax liens, bankruptcies, and civil judgements.
The rates you’ll see in this program are slightly higher due to the increased risk in the bonding. The premiums usually range between 5% and 10%. Still, you are guaranteed a top bonding option with us. We work with numerous A-rated, T-listed surety companies, which allows us to offer you great bonding rates.
How do I get my yacht broker bond?
Would you like to learn more about the way bonding works? Just visit our extensive How to Get Bonded page for a thorough overview of the process.
Lance Surety Bonds’ specialists are here to help. For any questions you may have, just contact us at (877) 514-5146.