Surety Bond Encyclopedia

Insurance Adjuster Public ($20,000) Bond - Statewide in California

Brief Summary

Every California public adjuster license, individual or business entity, needs a $20,000 bond on CDI form LIC 94A, and the license is suspended as soon as the bond lapses. A surety bond keeps you from depositing $20,000 in cash with the state, runs concurrently with your license period, and is the same bond your client contracts are required to tell policyholders about.

California Insurance Code 15033 bars the Department of Insurance from issuing a public insurance adjuster license until the applicant files a $20,000 surety bond conditioned on the faithful and honest conduct of business. The amount is flat, with no tiers. CDI requires it on form LIC 94A from a California admitted surety, written to the People of the State of California, and a $20,000 cash or insured deposit with the state is the only alternative.

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How to Apply for a Insurance Adjuster Public ($20,000) Bond:

Complete CDI form LIC 94A, Bond of Public Insurance Adjuster, in the penal sum of $20,000.
Put the bond in the applicant's name, exactly as on the license application.
Sign the bond as principal.
Attach a power of attorney if the bond is not executed by an officer of the surety, and a jurat if the surety's seal is not on the power of attorney.
Submit the bond with the license application and the $264 filing fee, plus fingerprints if you are not already licensed.
Include the $20,000 bond statement in your client contract as Section 15027 requires.

Detailed Information About the California Insurance Adjuster Public ($20,000) Bond:

One flat amount, and it has to stay in force

There are no tiers. Insurance Code 15011(f) and 15033 require every public insurance adjuster applicant to post a $20,000 surety bond executed by a surety company authorized to do business in California, and CDI's application procedures call for form LIC 94A from both individual and business entity applicants.

Section 15035 is the part people miss. A licensee must keep the bond on file and in full force at all times. If it lapses, the license is suspended forthwith and is not reinstated until a new application and a proper bond are filed, and the Commissioner may still deny reinstatement.

What the bond covers

Under Section 15034 the bond is taken in the name of the people of the state, and any person injured by the willful, malicious or wrongful act of the adjuster can sue on it in their own name. Form LIC 94A (Rev. 1/2023) conditions the bond on the adjuster conducting business, including adjusting claims for fire and allied coverages, burglary, flood, all real and personal property claims and loss of income, in a faithful and honest manner.

Section 15027(b)(11) requires every public adjuster contract to tell the insured that the adjuster is required by the Insurance Code to post a $20,000 surety bond to cover certain kinds of claims.

Term, cancellation and the deposit option

The form makes the bond continuous, running concurrently with the license period. Section 15037 keeps it in force until the surety terminates future liability with 30 days notice to the Commissioner. Section 15036 allows a $20,000 deposit with the State of California instead, in cash, an FDIC insured bank deposit, an insured savings association certificate or share account, or an insured credit union certificate or share account.

Fees and license term

CDI charges a $264 two year filing fee for individual and business entity licenses, plus $39 for each branch office certificate, and filing fees are not refunded. The exam costs $68 per scheduled date at a CDI site or $101 at a PSI test center. Licenses are issued for two years, running from the issue date to the last day of the same calendar month two years later. Renewing after expiration adds 50 percent of the renewal fee, and California residents must complete ethics and continuing education hours to renew.

Eligibility and Requirements for a California Insurance Adjuster Public ($20,000) Bond:

Penal sum of $20,000, flat.
Written to the People of the State of California.
California admitted surety, on form LIC 94A.
Bond kept on file and in force for the whole license period, or the license is suspended.
Business entity applicants file a bond and designate a licensed individual public insurance adjuster responsible for compliance.

California Insurance Adjuster Public ($20,000) Bond FAQs:

Does a business entity need its own bond?

Yes. CDI's business entity application procedures require a completed LIC 94A in the penal sum of $20,000 from a California admitted surety. An organization applicant must also designate a licensed individual public insurance adjuster to be responsible for its compliance under Section 15011(g).

What happens if my bond is cancelled?

The surety must give the Commissioner 30 days notice to end future liability (Section 15037). If no replacement is on file, Section 15035 suspends the license forthwith, and it stays suspended until you file a new application with a proper bond.

Can I deposit cash instead of buying a bond?

Yes. Section 15036 allows a $20,000 deposit with the State of California in cash, or as an FDIC insured bank deposit, an insured savings association certificate or share account, or an insured credit union certificate or share account.

Who can make a claim on the bond?

Any person injured by the willful, malicious or wrongful act of the public adjuster. Section 15034 lets that person bring an action on the bond in their own name to recover damages.

How long is the bond good for?

LIC 94A is continuous and runs concurrently with the license period. Licenses are issued for two years, ending on the last day of the same calendar month two years after issue.

Do I have to mention the bond in my contracts?

Yes. Section 15027(b)(11) requires the contract to state that you are required by the California Insurance Code to post a surety bond in the sum of $20,000 to cover certain kinds of claims made by the insured.