California Surplus Line Broker Bond Overview
- Purpose: To ensure insurance brokers uphold state laws and operate ethically
- Who Needs It: Surplus line and special line insurance brokers in California
- Regulating Body: The California Department of Insurance
- Bond Amount: $10,000 or $50,000
- Premium Price: $100 for $10,000 coverage or $500 for $50,000 coverage
What Is a California Surplus Line Broker Bond?
If you’re applying for a surplus line insurance broker license in California, the Department of Insurance (CDI) requires you to file a surety bond.
This bond protects the state and your clients from financial harm if you commit fraudulent or negligent business practices.
Bond Coverage Requirements for California Surplus Line Brokers
All individual and business entity surplus line brokers need a $50,000 bond for state licensing. Special lines brokers need an additional $10,000 bond. This applies to both residents and nonresidents.
You are exempt if you only transact on behalf of a licensed business entity.
How Much Do Surplus Line Broker Bonds Cost in California?
All California surplus line broker bonds are available at a flat rate with no credit check required. The $10,000 bond costs $100 for a one-year term, and the $50,000 bond costs $500.
You can also select a multi-year term at checkout to save 25%. Purchase your bond instantly below.
SuretyBonds.com offers the lowest available rates from our nationwide provider network with no added fees.
How Does a California Surplus Line Broker Bond Work?
A California surplus line broker bond creates a legal contract between three parties.
| Bond Party | Description |
|---|---|
| Principal | The surplus line broker filing the bond |
| Obligee | The California Department of Insurance |
| Surety | The issuing surety provider |
This bond is your financial guarantee to the CDI that you’ll uphold all regulations and operate ethically.
If you commit any license violations, harmed parties can file claims against your bond. The surety will pay valid claims up to the full bond amount. However, you ultimately need to refund the surety.
How Do I Get a Surplus Line Broker Bond in California?
With SuretyBonds.com, you can purchase your California surplus line broker bond online 24/7. Simply enter your information into our secure portal.
Once we process your payment, you’ll receive an email with your official bond form in minutes. Be sure to file the bond with the CDI as instructed.
Can I Get Bonded With Bad Credit?
Yes, this bond doesn’t require a credit check! Anyone can purchase this bond at the same flat rate, regardless of credit score.
How Do I Renew My Surplus Line Broker Bond?
California surplus line broker bonds expire annually. We’ll begin sending you reminders by phone and email 90 days before the expiration date. To renew, simply pay the attached invoice.
Can I Make Changes to My Bond?
Your surety company can typically make small changes to your bond, such as name or address, through a bond rider document. You cannot update the bond form yourself.
If you purchased your bond from us, email [email protected] with the needed change.
How to Become a Surplus Line Broker in California
The CDI recognizes three types of surplus line insurance brokers:
- Individual: Brokers that operate independently. You must file a $50,000 surety bond.
- Business Entity: Corporations, LLCs or partnerships that designate a responsible individual licensee. The entity itself holds the license and must file a $50,000 surety bond.
- Endorsed: Brokers that transact only on behalf of a licensed business entity. You still hold your own license but are exempt from the bond requirement.
All resident surplus line brokers must also hold a Property Broker-Agent license and Casualty Broker-Agent license. Complete the following steps to apply for a surplus line broker license:
- Complete Education Courses: Complete the prelicensing education requirements for the Property Broker-Agent and Casualty Broker-Agent licenses.
- Pass Exams: Register for and pass the Property and Casualty Broker-Agent license exams.
- Apply for the Agent Licenses: Submit your Property Broker-Agent and Casualty Broker-Agent applications through Sircon. Pay the $188 license fee.
- Submit Fingerprints: Register for a LiveScan fingerprinting session.
- Purchase a Surety Bond: File a $50,000 surety bond, unless you’re working on behalf of a licensed surplus line broker business.
- Apply for the License: Use your Sircon account to apply for the surplus line license. The fee is $646 if transacting only for a business entity or $1,296 if filing a $50,000 bond.
- Complete Forms: Submit the Surplus Lines (Special Surplus Line) Certification Form LIC-050. Individual brokers transacting for an entity must be endorsed on Form LIC 411-8A. The fee is $32.
Nonresident surplus line brokers only need to apply for the surplus line broker license in California. However, you must already hold all three licenses in your home state.
If you’re also applying as a special lines broker, you’ll need an additional $10,000 bond. All fees are the same.
What Are the Continuing Education Requirements?
The California property broker-agent and casualty broker-agent licenses require 24 hours of continuing education every two years.
If you market flood insurance, you also need to complete a one-time flood training course approved by the Federal Emergency Management Agency.
All surplus line business entities must provide two hours of training every five years to employees who handle insurance with non-admitted insurers.
