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The Curious Bag
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Broker surety bonds are a general category of surety bonds that includes three subcategories: mortgage broker bond, freight broker bond and insurance broker bond. Each subcategory has its specific uses and requirements.
Mortgage Broker Bond
Each state requires mortgage brokers to post a bond as an assurance that the broker will follow the state's laws. The amount of the bond and the conditions attached differ from state to state.
Freight Broker Bond
The Federal Motor Carrier Safety Administration (FMCSA) issues licenses to property brokers in the freight transportation industry. The FMCSA requires that a freight broker's bond in the amount of $10,000 be obtained before any property broker's license will be issued.
Insurance Broker Bond
Insurance broker bonds are used to protect the public from licensed insurance brokers who engage in unlawful acts. Every state requires insurance brokers to post such a bond, the amount of which varies by state.
Getting Bonded
The application process for a bond is rigorous, and approval depends on the adequacy of your finances and business reputation.
Alternative to Bonding
If your application for a bond is denied, ask if a trust fund on deposit with a federally insured bank for the bond amount can be used as an alternative.
Source:
Federal Motor Carrier Safety Administration: Property broker surety bond
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