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Ohio Surplus License Broker Bond

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Ohio – Surplus License Broker for an Individual ($25,000) Bond
Ohio – Surplus License Broker for a Business Entity ($25,000) Bond

Introduction

Ohio Surplus Lines Broker Bonds are a $25,000 surety bond required by the Ohio Department of Insurance for individuals and entities licensed to place insurance with non-admitted carriers. This bond ensures brokers comply with state laws and protects the public and the state against any misconduct or failure to remit surplus lines taxes.

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Explanation: Ohio Surplus License Broker Bond

Types of Ohio Surplus Lines Broker Bonds

In Ohio, Surplus Lines Brokers are regulated by the Ohio Department of Insurance (ODI) under Ohio Revised Code Chapter 3905. Surplus lines brokers must be licensed and are required to file a surety bond to ensure compliance with all laws governing the placement of insurance through non-admitted (surplus lines) carriers.

Here are the main types of bonds associated with surplus lines brokers in Ohio:

Ohio Surplus Lines Broker Bond (Standard Form)

  • Applies To: Individuals or business entities licensed as surplus lines brokers in Ohio.

  • Bond Amount: $25,000 (as required under Ohio Revised Code § 3905.33).

  • Purpose:

    • Ensures the broker complies with Ohio laws governing surplus lines insurance.

    • Provides financial protection to the state and insured parties in the event of broker misconduct, such as:

      • Failing to report or remit surplus lines taxes

      • Placing business with unauthorized carriers

      • Breach of fiduciary duties

Surplus Lines Broker Bond – Corporate or Business Entity

  • Applies To: Corporations or business entities licensed as surplus lines brokers.

  • Bond Amount: Still $25,000, but issued in the legal name of the business rather than an individual.

  • Purpose: Same as above, but tied to the actions of the entity and its authorized representatives.

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Step-by-Step Guide to Obtaining a Surplus Lines Broker Bond

Obtaining a Surplus Lines Broker Bond in Ohio is a critical step in securing and maintaining a surplus lines broker license, as mandated by the Ohio Department of Insurance (ODI) under Ohio Revised Code § 3905.33. Below is a step-by-step guide to help you through the process:

Step 1: Confirm License Eligibility

Before obtaining the bond, ensure that you meet the eligibility requirements to become a surplus lines broker in Ohio:

  • Hold an active Ohio insurance license.

  • Have completed the required education and passed any applicable exams.

  • Be in good standing with the Ohio Department of Insurance.

Step 2: Choose a Reputable Surety Bond Provider

Contact a licensed surety bond company or broker that is authorized to issue bonds in Ohio.

  • Ensure they are familiar with surplus lines broker bonds.

  • Ask about turnaround time, rates, and requirements.

Step 3: Complete the Bond Application

The surety provider will require basic information, such as:

  • Full legal name of the individual or business entity

  • Physical and mailing address

  • Social Security Number (for individuals) or EIN (for entities)

  • License number (if already issued)

  • Personal or business financial information (credit may be checked)

Step 4: Pay the Bond Premium

The annual bond premium is typically 1–5% of the bond amount based on creditworthiness.

  • Ohio requires a $25,000 bond amount.

Step 5: Receive and Review the Bond

Once issued:

  • Ensure the bond correctly lists the State of Ohio – Department of Insurance as the Obligee.

  • Verify that the principal’s (your) information is accurate.

Step 6: Submit the Bond to the Ohio Department of Insurance

Mail the original signed and sealed bond to: Ohio Department of Insurance

Include it with your surplus lines broker application or renewal documents, as appropriate.

Step 7: Maintain the Bond Annually

  • The bond must be kept in force continuously as long as you are licensed.

  • Renew your bond annually with your surety provider before expiration.

  • Notify ODI immediately if your bond is canceled or changed.

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Conclusion

Ohio Surplus Lines Broker Bonds are a mandatory financial guarantee required by the Ohio Department of Insurance to ensure that licensed surplus lines brokers operate ethically and in full compliance with state laws. By securing this $25,000 bond, brokers demonstrate their commitment to responsible business practices, including proper reporting and remittance of surplus lines taxes. Maintaining this bond is essential for licensure and ongoing operations in Ohio’s surplus insurance market.

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Frequently Asked Questions (FAQs)

Here are commonly asked questions regarding Surplus Lines Broker Bonds in Ohio:

Is the Ohio Surplus Lines Broker Bond a one-time requirement?

No. The bond must be maintained continuously as a condition of holding an active surplus lines broker license in Ohio. It must be renewed annually.

What happens if I fail to renew my bond on time?

Failure to maintain a valid bond can result in suspension or revocation of your surplus lines broker license. You may also face fines or disciplinary action from the Ohio Department of Insurance.

Can I use the same bond for multiple states?

No. The Ohio Surplus Lines Broker Bond is specific to Ohio. Each state has its own bonding requirements and obligee.

What types of violations can lead to a claim against the bond?

Violations may include:

  • Failing to remit surplus lines premium taxes

  • Submitting false or misleading information

  • Misappropriating client funds

  • Violating provisions of Ohio Revised Code § 3905.33

Can I get bonded with bad credit?

Yes, but you may pay a higher premium or need to provide additional documentation. Some surety companies specialize in high-risk applicants.

Is collateral required to obtain the bond?

Usually not. Most applicants can obtain the bond based solely on creditworthiness and underwriting review. However, those with poor credit or a history of claims may be asked to provide collateral.

What’s the difference between a surplus lines broker bond and an insurance producer bond?

A surplus lines broker bond is specifically for those placing insurance with non-admitted carriers, whereas a producer bond may apply to general insurance agents licensed to sell on behalf of admitted insurers.

How do I update the bond if my business name or address changes?

You must notify your surety company immediately so they can issue a rider to reflect the change. You must also inform the Ohio Department of Insurance to update your license records.

Can the bond be transferred to another person or business?

No. Surety bonds are non-transferable. If ownership changes, the new party must apply for and obtain a new bond.

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