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You are here: Experts > Money > Personal Insurance > Property & Casualty Insurance > Starting a P&C business
Expert: Thom Brooks - 10/29/2009
Question
Thom,
I am currently licensed in Accident and Health, Fire and Casualty Broker-Agent, and Life Only. I currently have E&O insurance in place. I am looking to start my own brokerage firm. I am signing up with a General Agency as I have heard that appointments are difficult to get right out of the gate. My question is what do I need to get started? I have read the California Insurance website and it states that I need a $10,000.00 Surety Bond. What is that for? Do I really need it? Also, what do I truly need to go live? I figure that I'm ready to go with the GA and E&O insurance. Until I get a strong agency name I'm just going with "my name" insurance I just don't want to be blindsided by anything. Any thoughts?
Answer
Jerry, hello!
The Surety Bond is likely making you responsible for errors that cost the state money. So, the state of California would be the Obligee. You would be the Principal. If statutory law says you have to have it, then they will not approve your license request until it is in force.
You need to contact your E. & O. insurer EVERY time you add another Insurer or employee.
The economical climate will dictate what kind of market each company pursues. They will tell you their niche.
You should talk with all in the similar business, in your area or state. They have many contacts, to include a possible Consortium of companies that allow you to write with major companies. You give the Consortium a percentage but have access to every product you would market.
Take care,
Thom Brooks
Savannah, Georgia
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