$10,000 Maryland Automobile Insurance Fund Producer Bond

Businesses are required to file a $10,000.00 bond with the State of Maryland Automobile Insurance Fund (the "Obligee") to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from a licensed business breaking licensing laws.

Automobile Insurance Fund Producer Bond

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How much does the Maryland Automobile Insurance Fund Producer bond cost?

Maryland Automobile Insurance Fund Producer bonds typically cost $100.

Is a Credit Check Required for Maryland Automobile Insurance Fund Producer Bonds?

Credit checks are not required for the Maryland Automobile Insurance Fund Producer Bond.

Why is the Maryland Automobile Insurance Fund Producer bond required?

Businesses are required to purchase and file a $10,000 bond with the State of Maryland Automobile Insurance Fund to activate their license. The bond protects the Obligee by transferring to a surety bond company the cost of ensuring the public is compensated for damages resulting from the failure of a licensed business complying with the provisions of licensing laws.

How does the Maryland Automobile Insurance Fund Producer bond work?

Maryland Automobile Insurance Fund Producer bonds must be issued by an insurance carrier admitted by the Maryland Department of Insurance. The insurance company issuing any surety bond, such as the Maryland Automobile Insurance Fund Producer bond, will also be referred to as the "surety company" or the "bond company". The business is referred to as the Principal, the surety bond company as the Obligor and the State of Maryland Automobile Insurance Fund as the Obligee.

The surety company provides the Obligee a guarantee (the surety bond) that the customers, vendors and employees of a licensed business will receive payment for financial damages due to a violation of licensing law up the bond amount stated on the bond form ("penal sum"). The bond company also directly receives claims from the public and determines the validity of claims. Ultimately, the licensed business owners are responsible for their actions and required by law to reimburse the surety company for any payments made under the bond or face indefinite license suspension.