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Yacht Broker Bond

A Yacht Broker bond is a type of license surety bond. These surety bonds are required in a few states of individuals who seek to operate as a yacht or ship broker or salesman. Surety bond amounts vary by state as does the name of the surety bond. Florida has the "Florida Yacht and Ship Broker Seller Bond" which is $25,000 for a broker and $10,000 for a salesperson. California has a $15,000 "Yacht and Ship Broker" bond.

What is a Yacht Broker Bond

The purpose of the yacht broker bond is pretty simple. The surety bond is in place to provide a form of protection for people who may suffer a loss caused by fraudulent or deceitful activities of the broker or any other activity from the broker that does not adhere to the applicable state statutes and regulations. If a claim against a yacht broker is found to be legitimate, the potential first step toward recovering the loss is to claim on the surety bond.

How does a Yacht Broker Bond work?

When someone submits a claim on the surety bond, the surety that backs the bond launches an investigation to confirm that the claim has merit. Provided it does, the surety agrees to settle all valid claims up to the bond amount. Surety bonds are a path of recourse for anyone wronged by a yacht broker. Surety bonds are closer to a line of credit than an insurance product. When the surety steps in to pay a valid claim, the bonded yacht broker, who triggered the claim, must pay the surety back the full amount of the claim with interest and fees added.

In most states, the yacht broker bond is continuous. That simply means that an active surety bond is required for as long as the license is active. The surety bonds are usually annual bonds meaning they must be renewed every year for as long as the bond is required.

Who should get a Yacht Broker Bond?

That depends on where you're located. In the Sunshine State, for example, individuals must obtain a Florida Yacht Broker Bond before the state will grant them a license to broker yacht sales. If a state requires a surety bond as part of the licensure process, it's usually apparent. Make getting a surety bond ASAP the top priority because when it's required, it's impossible to legally broker yacht sales without a bond.

Who are the parties involved in a Yacht Broker Bond?

The yacht broker is just one of three parties involved:

• Principal - The yacht broker who obtains the surety bond and accepts financial responsibility for all claims filed.
• Obligee - The public, being anyone interacting with the yacht broker in a business transaction. As the obligee, this person has the right to file claims on the bond if the yacht broker has wronged them in a legal manner.
• Surety - A company that issues yacht broker bonds. The surety guarantees payment of all valid claims, but it's the principal's legally-binding responsibility to pay that debt back plus interest and associated fees.

How much does a Yacht Broker Bond cost?

That depends first on the size of the surety bond. States mandate the required amount of a yacht broker bond, meaning the total amount the surety commits to paying out to settle claims. The cost for that bond (known as the premium) is a small percentage of the bond total. Therefore, someone pursuing a Florida Yacht Broker and Ship Seller Bond may only pay around a thousand dollars. How much exactly depends on the second factor in play: the credit history of the surety bond applicant. Those with challenged credit or blemishes like a bankruptcy on their financial record will pay more for a surety bond. However, the good news is that with the assistance of a top surety agency like Viking Bond Service, it's still possible to get a surety bond with bad credit even if a surety company has said no in the past.

How are claims handled for Yacht Broker Bond?

The surety will investigate all claims to establish whether a claim does or doesn't have merit. For valid claims, the surety pays out damages to the obligee immediately. After paying, the surety uses whatever legal means available to collect the amount of the claim (plus interest and fees) from the principal. Remember, financial responsibility for all claims rests solely with the principal even if the surety initially settles a claim.

How to apply for a Yacht Broker Bond?

Application is simple, and you can get a quote back in as little as 24 hours. Simply complete a standard surety bond application, which will ask for information about your business, your background, and your finances. You may also need to supply a financial statement to help underwriters better understand your credit risk. Once you receive a quote and pay the premium, the surety bond remains active for 12 months.

Viking Bond Service - Simplifying Yacht Broker Bonds

Viking Bond Service writes yacht broker bonds nationwide. We are experienced with these surety bonds and have markets that both welcome the bond requests and provide good rates for them. These surety bonds are typically simple and easy to process and quote. Quotes are usually obtained the same day or within 24 hours.

To get things started, take a few minutes to complete our online bond application at your own convenience. We would also be happy to answer any questions you have and walk you through the details of the bonding process. Connect with one of our experts through the contact form on this page or by calling 1-888-278-7389.