Insurance broker bonds, also known as insurance agent bonds or producer bonds, play a critical role in maintaining trust within the insurance industry. These surety bonds guarantee that brokers comply with state laws, handle client funds responsibly, and uphold their ethical standards.
In this article, we break down what insurance broker bonds are and how they protect clients and regulators from financial loss. We also explore which states require these bonds, how much they cost, and why understanding them matters, even if you operate in a state without specific insurance broker bond requirements.
An insurance broker bond is a type of surety bond that some states require licensed insurance brokers and producers to purchase. Like all surety bonds, insurance broker bonds create a legal agreement between these three parties:
If a broker mishandles client funds, commits fraud, or violates their licensing laws, their clients or the regulatory agency can file a claim against their bond. After that, the surety company will verify their claim, compensate the affected parties, and seek reimbursement from the broker.
Read More: The Important Role of Surety Bonds in Professional Licensing
Surety bonds and insurance sound similar, but they’re not the same thing. Most notably, they protect different parties. E&O insurance protects the broker who purchases the policy. In contrast, insurance broker bonds protect their clients, regulators, and the public.
Not all insurance professionals need insurance broker bonds. They’re typically only required of independent brokers or surplus lines agents who collect and remit premiums on behalf of carriers or operate in certain states.
In contrast, captive agents who work exclusively for a single insurer are typically exempt because their employer assumes the financial responsibility for their transactions.
Property & Casualty insurance agents only need this bond in states that specifically require it for licensed producers or brokers, such as California, Georgia, Florida, Maryland, Virginia, and more. Independent agents that want to expand their business across state lines or enter surplus lines markets should confirm their bonding requirements early on to prevent compliance delays.
As of 2025, these are the states that currently require insurance agent and surplus lines broker bonds:
|
State |
Bond Type |
Typical Amount |
Applies To |
|
California |
Insurance Broker Bond |
Licensed brokers handling client funds |
|
|
Kentucky |
Insurance Agent Bond |
Licensed insurance agents |
|
|
Alabama |
Surplus Lines Broker Bond |
$50,000 |
Surplus lines brokers |
|
Florida |
Surplus Lines Agent Bond |
Surplus lines brokers |
|
|
Georgia |
Surplus Lines Broker Bond |
$50,000 |
Surplus lines brokers |
|
Maryland |
Surplus Lines Broker Bond |
Surplus lines brokers |
|
|
Ohio |
Surplus Lines Broker Bond |
$25,000 |
Surplus lines brokers |
|
Oklahoma |
Surplus Lines Broker Bond |
$5,000 - $40,000 |
Surplus lines brokers |
|
Pennsylvania |
Surplus Lines Broker Bond |
$50,000 |
Surplus lines brokers |
|
South Dakota |
Surplus Lines Broker Bond |
$2,000 |
Surplus lines brokers |
|
Virginia |
Surplus Lines Broker Bond |
Surplus lines brokers |
Note: This list does not include all insurance industry-related surety bond requirements by state (e.g., special surplus lines, resident/nonresident agents, and title insurance agents). Consult with your state's DOI for specific bonding requirements for your license.
Insurance broker bonding regulations are subject to change, and more states may add similar requirements in the coming years. Thus, you should always verify your state’s latest rules with its Department of Insurance (DOI).
Pro tip: If you’re licensed in multiple states or plan to expand your agency’s footprint in the future, partner with a surety expert like BOSS Bonds. Our team can help you stay ahead of changing compliance requirements and secure your required bonds quickly when needed.
Surety bond costs depend on several factors, including your state, credit score, and required bond amount. Annual premiums typically range from 1% to 5% of the total bond amount. Thus, a $10,000 insurance broker bond may cost anywhere from $100 to $500.
You’ll be more likely to qualify for a lower bond premium if you have a:
The easiest way to find out your bond costs is to fill out an application. You can often receive a quote for your insurance broker bond the same day you apply. For example, at BOSS Bonds, we provide instant quotes for our insurance broker bonds.
States that require insurance broker bonds use them to protect consumers and maintain trust in the insurance industry. That’s because these bonds provide:
Put simply, insurance broker bonds strengthen the public's confidence in the profession. At BOSS Bonds, we know that ethical, compliant agents are the backbone of a trustworthy industry. That’s why we make our bonding process quick and easy. Our goal is to streamline the paperwork so you can get back to focusing on serving your clients.
If you fail to secure your insurance broker bond while operating in a state that requires one, you can face serious consequences, including:
As you can see, satisfying your bond requirements is about more than regulatory compliance. It’s also a reflection of your professionalism and credibility as a licensed insurance broker.
Read More: 10 Most Common Questions About Commercial Surety Bonds Answered
Whether you need a bond to satisfy state requirements or simply want to set your business apart, the process is simple, straightforward, and requires minimal paperwork. All you need to do is follow these four steps:
If you’re ready to secure your insurance broker bond, BOSS Bonds can help you get yours fast—often the same day you apply. Simply apply online or contact our team if you have questions!
State of California Department of Insurance. Bond of Insurance Broker (California Insurance Code sections 1662-1665).
Kentucky Department of Insurance. Agent Licensing Frequently Asked Questions.
https://insurance.ky.gov/ppc/Documents/agentlicfaq060910.pdf
Justia. 2005 Florida Code.
https://law.justia.com/codes/florida/2005/TitleXXXVII/ch0626.html
Maryland Insurance Administration. Surplus Lines Broker Certificate of Qualification.
https://insurance.maryland.gov/Producer/pages/surpluslinesbrokers.aspx
Virginia State Corporation Commission. Surplus Lines Brokers.