Insurance Adjuster, Agent, and Broker Bonds: Licensing & Assurance

Within the insurance industry, professionals undertake diverse roles - from assessing accident damages to guiding clients toward appropriate coverage. Many of these roles necessitate licensure and surety bonding.

Who Needs a Bond?

Insurance Adjusters

Insurance adjusters, also known as claims adjusters, play a vital role in the insurance claims process. Representing the insurer, they evaluate claims to determine rightful compensation. Their expertise spans various coverage types, including property damage and bodily injuries. Public adjusters serve policyholders by negotiating fair settlements.

Given their financial responsibilities, most states mandate licensing, often coupled with bonding for insurance adjusters. Working across state lines may necessitate multiple bonds and employing staff might necessitate bonds for individuals or companies.

Insurance Agents & Brokers

Insurance agents represent insurers and sell policies. Brokers act on behalf of consumers, assisting them in selecting policies from various providers. Licensing is usually mandatory for both, including a bond to complete the licensing process.

Surplus Lines Agents

Surplus lines insurance addresses unique risk scenarios not covered by conventional markets. Policies for rare or substantial risks fall under surplus lines. Agents operating in this space often require bonding due to the specialized nature of their work.

Third Party Administrators (TPAs)

TPAs manage self-funded health plans and perform tasks like processing claims and managing risk programs. Licensing usually requires a surety bond to assure proper fund administration

Pharmacy Benefit Managers (PBMs)

PBMs act as third-party administrators, facilitating drug discounts and claims. Bonding often  accompanies licensing due to fiscal responsibilities.

Guarantee and Significance of Bonds

Bonds for insurance adjusters, agents and brokers, ensure ethical conduct and regulatory adherence of insurance professionals. They ultimately protect consumers and enhance industry credibility.

Bond Amount and Underwriting

The bond's amount varies based on obligee requirements. The amount of premium due is a percentage of the bond amount.

Underwriting is based on bond amount, with many bonds being instant issue. Larger bonds may require a signed application, credit report, and financial statements. Merchants does not require indemnity signatures for bonds up to $75,000. Appointed insurance agents can find individual bond requirements by signing in to the Hub, Merchants' intuitive and efficient bonding website. Use our Find an Agent tool to locate an experienced insurance agent near you.

Navigating Claim Procedures

All surety bonds operate on a basic premise: If the bondholder violates the bond's terms, a claim can be filed for compensation. If valid, the surety will pay the claim, but the bondholder must reimburse the surety in full.

Simplifying the Bonding Experience

Merchants Bonding Company's expertise and simplified bonding process ensure that professionals in the insurance industry can meet licensing requirements seamlessly.


Surety bonds are issued by Merchants Bonding Company (Mutual) through insurance agents. Contact your local insurance agent or use our Find an Agent tool. They will guide you through the process, informing you of what documents and information are needed by the surety (Merchants Bonding Company (Mutual)) to underwrite your bond.


A surety bond is a three-party agreement that ensures the fulfillment of a commitment or contract. For instance, the surety (Merchants Bonding Company (Mutual)) may provide a surety bond to a construction company (the principal) which is required by the state (the obligee), ensuring the construction company will perform the duties as outlined in the contract. In bonding the construction company, Merchants assumes the risk should the company default or not fulfill their contract. A surety bond is different from traditional insurance in that the principal is obligated to pay back the surety company on any claims paid out.

All information provided is subject to change without notice.