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A Florida surety bond guarantees principal owners and the public that services will be performed with excellence and security. Florida legally requires a variety of contractors and organizations to secure bonds to conduct business across the public service industry. Single Source Insurance is a leading Florida bonding company. Apply easily online and take advantage of lowest rates. Browse the most common types of FL surety bonds, or contact us for a full list.
A Florida salvage dealer bond is classified as a license and permit surety bond. This is because purchasing one is a requirement for licensure as a salvage dealer in the state of Florida. The bond serves as a salvage dealer�s pledge to do business in compliance with all relevant state laws, specifically Chapter 319 and 320 of the Florida Statutes. Failure to do so, if it causes financial harm to another, can result in a claim for damages being filed against the bond.
Salvage dealers are licensed to acquire and resell salvaged vehicles, wrecked vehicles, or their parts. If you sell both salvaged vehicles and their parts, you�ll need a Salvage Dealer License and Motor Vehicle Dealer license. Each license requires a separate surety bond in the amount of $25,000. That amount is known as the bond�s �penal sum,� which is the maximum amount that will be paid out on a single claim or in a single year.
The term of a Florida salvage dealer bond matches the term of your dealer�s license, both of them expiring on April 30 of each year.
Every surety bond agreement is a legally binding contract among three parties:
?In the case of a Florida salvage dealer bond, the Florida Department of Highway Safety and Motor Vehicles (FLHSMV) is the obligee, the salvage dealer is the principal, and the surety bond company is the surety.
The surety bond agreement makes the principal solely responsible for paying claims deemed by the surety to be valid. In practice, the surety pays the claimant directly on behalf of the principal. This ensures that the claim is paid quickly without the principal having to come up with a large sum of money right away. Paying a claim on behalf of the principal creates a debt that the principal owes to the surety and is legally obligated to repay.
Given the need to collect reimbursement for claims paid on the principal�s behalf, the surety�s main concern in underwriting a Florida salvage dealer bond is the principal�s creditworthiness. The premium rate a given applicant will pay is based primarily on the individual�s personal credit score. However, other factors also enter into the picture, such as personal and business finances, industry experience, and prior claims history.
A principal with excellent credit could pay a premium rate as low as 1% of the penal sum of a Florida salvage dealer bond, making the annual premium as low as $250.
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