Overview of Yacht Broker Bond Requirements
Yacht brokers, salespersons and dealers in several states are required to obtain a yacht broker license surety bond in order to get a license. States that currently require this bond are: Florida, California, Maryland, Virginia, and Washington. The amounts of the bonds required in these states vary though on average are around $10,000 - $15,000.
This bond is required as a guarantee that licensees will comply with the regulations in their state that apply to yacht and boat brokers and dealers. It guarantees they will properly account for and transfer any money they receive from their clients as well as pay state fees and taxes as required.
If a broker or dealer violates the conditions of their bond agreement, causing losses to any individual or to the state, a claim can be filed against their bond. The surety then reviews the claim and may extend compensation to claimants up to the full amount of the bond, also known as its penal sum.
If you are a first-time bond applicant, you may be wondering what a bond is and why you need one. See our ‘What is a surety bond’ guide for a full overview of surety bonds.
Read on for full information regarding the cost of your bond, what a bond claim is, and how to apply for your bond!
You can call us at (866)-450-3412 anytime to speak to one of our bond experts and lear more about this bond.
Yacht Broker Bond Cost
To get bond you must pay a surety bond premium. This premium is determined by the surety you apply with and is equal to a fraction of the total amount of your bond.
To determine your premium, or rate, the surety will mostly look at your credit score. It may also take into account other factors, such as your financial statements or even your personal resume, but the primary factor always is your credit score. The higher your score, the lower your premium will be. For example, applicants with a score of 700 FICO or more are typically offered some of the lowest possible rates on their bonds.
Amounts for this bond vary from state to state.
Florida requires yacht and ship salesmen to get a $10,000 bond, and brokers to get a $25,000 bond
California yacht brokers must obtain a $15,000 bond
Maryland boat dealers have to obtain a $20,000 bond when they first apply for their license but may be required to get a bond between $5,000 and $200,000 after their first license year
Virginia requires a $5,000 bond to be posted by watercraft dealers
Washington also requires a $5,000 bond to be posted by vessel dealers
You can get a quick estimate of your bond cost by using our bond calculator or from the table below. For an exact and free quote on your bond, simply complete and submit our bond form!
Surety Bond Cost Calculator
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|Yacht Broker Bond||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Maryland (initial bond)||$20,000||$150-$300||$200-$500||$500-$1,000||$1,000-$1,500|
Bad Credit Bond Program
If you have a low credit score but want to get a bond, you can apply for a bond through our Bad Credit Program!
We’ve created this program specifically with the idea of creating the possibility for bad credit applicants applicants to obtain a bond for their business license. Getting bonded with a low score means you will likely need to pay a higher rate on your bond. If you improve your score over time though, you will be eligible to receive increasingly better rates on your bonds.
Visit the program page to learn more about this program and to get a free quote!
Claims Against Your Bond
A claim against your yacht broker bond will depend on the conditions of the bond. Typically, the conditions of these bonds include the requirement for yacht brokers or dealers to conduct business honestly and fairly. They also include the requirement to comply with the conditions of any agreement they have with their clients, to pay money on time, and to use if for the purposes it was provided to them. Moreover, some of these bonds may also include conditions regarding the payment of fees, penalties or other money to the state brokers are licensed in.
For example, if a yacht broker acts in a fraudulent or deceitful manner and thereby causes their clients to lose money, the latter will be eligible to file a claim against their bond to receive compensation. In such a situation, the surety that backs the bond will extend compensation to claimants, up to the full amount of the bond.
In return, once the surety covers a claim, the bonded broker is required to reimburse it in full. This is part of every bond agreement and is the reason why it is best not to give rise to claims. Ultimately, it is the bonded party that is liable for any damages or losses it causes, whereas the surety may only provide temporary coverage but must ultimately be reimbursed.
Complete our bond form to get started with your bond application as well as simply to request a free and exact quote on your bond!
We’ll shortly get in touch with you, providing you with your quote along with all necessary details regarding completing the bond application process. It will take about two working days for your bond to be issued, once you’ve finalized your application. We will then send you your bond by mail and email.
To find out more about the bonding requirements for yacht brokers in your state, call us at (866)-450-3412!