Brokers differ from agents.  Brokers are generally professionals that operate independently of the firms that provide the products that they sell including Insurance Brokers, Mortgage Brokers and others.  This independence can be good for consumers and different risks.


Mortgage brokers for surety bonds guarantee consumers a minimum level of protection against fraud, legal representation and professional competence.  Most states require mortgage brokers as a condition of their licensing process.  The surety bond requirements vary by state but generally are between $10,000 and $50,000.  These bonds allow the state and consumers a minimum amount to recoup expenses, fines and minor damages for failures by the broker to adhere to the laws of their state, including consumer protection laws against such things as pressure sales tactics, disclosure failures, unnecessary or exhorbitant fees and even instances of fraud.
These brokers are no substitute for errors & omissions or professional liability insurance.  They are also no substitute for crime or fiduciary coverage.
The premiums vary by the bond amount and the credit worthiness of the applicant.  Newer firms can generally expect to pay more than more established firms of the same size.


Like mortgage brokers, insurance brokers are required to obtain and maintain a surety bond in most states.  Insurance brokers for suretyinsurance-broker-bond bonds provide guarantees on a minimum amount of protection to consumers and state governments that the insurance broker properly accounts for insurance premiums and as a protection against fraud or unethical behavior by the broker.  Likewise, they also provide modest alternative protection to insurers that sell insurance products through independent brokers.
Like all surety bonds, the bonded insurance broker is liable to the surety bonding company up to the bond limit.  The premiums vary by the size of the insurance brokerage firm.  Insurance brokers with less attractive credit experience are likely to pay more than other brokers with better credit.


Like previous examples, surety bonds for surplus lines insurance brokers are required by most states.  These bonds ensure consumers and state governments that the broker will adhere to state laws and handle money and disclosure issues in an ethical manner and as perscribed by law.  Consumers that purchase insurance from these insurance companies can be more vulnerable to financial loss than other consumers that purchase through admitted insurers.  Non-admitted or surplus lines insurance companies are not subject to the same financial guarantee laws and remedies of other insurers, so the disclosure duties of surplus lines insurance brokers are different than other standard retail brokers.  Likewise, these brokers are required to collect additional taxes and fees in addition to the policy premium and pay these to the necessary parties in that state.


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