A Surplus Lines Broker License surety bond, or Surplus Lines Agent License surety bond, is a license and permit surety bond required by government entities to receive a license within that jurisdiction to sell surplus lines insurance related products. Surplus line broker or agent license surety bonds help ensure the surplus line agent operates according to applicable laws and properly accounts for premiums, taxes and fees collected on behalf of the surety companies they represent.
What is surplus lines insurance? When the insurance carriers licensed in a particular state will not accept the risk on a certain policy then that policy may be placed with an insurer who is not licensed in that state. This is done by the surplus lines producer, broker or agent who is licensed in that state and is held accountable for the transaction. The surplus lines surety bond is a requirement for obtaining the license to place these type policies.