What is a Surplus Lines Broker Bond?
A surplus lines broker bond is a form of insurance required of surplus lines broker agents. These agents act as a third party between a surplus line buyer and the insurance company who issues the insurance policy. The surplus lines broker bond ensures that the agent will act legally and ethically; the surety bond also reimburses those who are the victims of fraud on the part of a surplus lines broker agent.
Before agents purchase a bond from an agency, they must submit themselves to a credit check, have their application approved, and go through other screening processes.