Florida Commercial Collection Agency Bond: A Comprehensive Guide
April 19, 2021
This guide provides information for insurance agents to help commercial collection agencies obtain Florida Commercial Collection Agency Bonds
At a Glance:
- Average Cost: Between $250 to $2,500 per year based on the bond applicant’s credit
- Bond Amount: $50,000
- Who Needs it: All commercial collection agencies seeking to obtain a registration in Florida
- Purpose: To ensure the public will receive compensation for any damages should the commercial collection agency fail to comply with licensing law
- Who Regulates Commercial Collection Agencies in Florida: The Florida Office of Financial Regulation
Background
Florida Statute 559.544 requires all commercial collection agencies operating in the state to register with the Office of Financial Regulation. The Florida legislature enacted the registration laws and regulations to ensure that commercial collection agencies engage in ethical business practices. In order to provide financial security for the enforcement of the registration law, commercial collection agencies must purchase and maintain a $50,000 surety bond to be eligible for licensure.
What is the Purpose of the Florida Commercial Collection Agency Bond?
Florida requires commercial collection agencies to purchase a surety bond as part of the application process to obtain a business registration. The bond ensures that the public will receive compensation for financial harm if the commercial collection agency fails to comply with the registration regulations. In short, the bond is a type of insurance that protects the public if the commercial collection agency breaks registration laws.
How Can an Insurance Agent Obtain a Florida Commercial Collection Agency Surety Bond?
BondExchange makes obtaining a Florida Commercial Collection Agency Bond easy. Simply login to your account and use our keyword search to find the “commercial” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
Is a Credit Check Required for the Florida Commercial Collection Agency Bond?
Surety companies will run a credit check on the owners of the commercial collection agency to determine eligibility and pricing for the Florida Commercial Collection Agency bond. Owner’s with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the Florida Commercial Collection Agency Bond Cost?
The Florida Commercial Collection Agency surety bond can cost anywhere between $250 to $2,500 per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $50,000 bond requirement.
$50,000 Commercial Collection Agency Bond Cost
| Credit Score | Bond Cost (1 year) |
|---|---|
| 700+ | $250 |
| 650 – 699 | $500 |
| 625 – 649 | $625 |
| 600 – 624 | $940 |
| 550 – 599 | $2,000 |
| 500 – 549 | $2,500 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
How Does Florida Define “Commercial Collection Agency?”
To paraphrase Florida Statute 559.543, a commercial collection agency is any business that solicits or collects commercial claims either directly or indirectly.
How do Commercial Collection Agencies Apply for a Registration in Florida?
Commercial collection agencies in Florida must navigate several steps to secure their registration. Below are the general guidelines, but applicants should refer to the application guidelines for details on the process.
Registration Period – The Florida Commercial Collection Agency Registration expires on December 31 of each year and must be renewed before the expiration date
Step 1 – Establish a Business Location
Applicants for the Florida Commercial Collection Agency Registration must establish a business location that complies with all relevant zoning and building codes
Step 2 – Purchase a Surety Bond
Commercial collection agencies must purchase and maintain a $50,000 surety bond
Step 3 – Complete the Application
All Florida Commercial Collection Agency Registration applications can be filed electronically or be mailed to the following address:
Office of Financial Regulation
200 East Gaines Street
Tallahassee, FL 32399-0376
Applicants must complete the application in its entirety, and pay a $500 registration fee
How Do Florida Commercial Collection Agencies Renew Their Registration?
Commercial collection agencies can renew their registration electronically here. Registration holders must pay a $500 fee each renewal period. The Florida Commercial Collection Agency Registration expires on December 31 of each year and must be renewed before the expiration date
What Are the Insurance Requirements for the Florida Commercial Collection Agency Registration?
The State of Florida does not require commercial collection agencies to purchase any form of liability insurance as a prerequisite to obtaining a business registration. Commercial collection agencies must purchase and maintain a $50,000 surety bond.
How Do Florida Commercial Collection Agencies File Their Bond?
Commercial collection agencies should submit the completed bond form, including the power of attorney, electronically here. The commercial collection agency surety bond requires signatures from both the surety company that issues the bond and a representative from the commercial collection agency. The surety company should include the following information on the bond form:
- Legal name and address of entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Date the bond goes into effect
- Date the bond is signed
- Witness signatures for both the principal and surety company
What Can Florida Commercial Collection Agencies Do to Avoid Claims Against Their Bond?
In order to avoid claims made against their bond, commercial collection agencies in Florida must ensure not to engage in any acts of fraud when soliciting collections from consumers.
What Other Insurance Products Can Agents Offer Commercial Collection Agencies in Florida?
Florida does not require commercial collection agencies to purchase any form of liability insurance as a prerequisite to obtaining a license. However, most reputable businesses will seek to obtain this insurance anyway. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Florida Commercial Collection Agency Customers?
Florida conveniently provides a public database to search for active commercial collection agencies in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
