Surety Bond Encyclopedia

LP Gas Indemnity - Category 3 ($300,000) Bond - Statewide in Florida

Brief Summary

Category III is the one LP gas license in Florida with its own lower figure. A cylinder exchange operator proves $300,000 of liability coverage, or files a $300,000 bond in its place, while every dealer, dispenser and installer is held to $1 million. If you store filled exchange cylinders at a store, this is the instrument the department expects to see.

A Category III liquefied petroleum gas cylinder exchange operator in Florida must show the Department of Agriculture and Consumer Services a primary liability policy of at least $300,000, or deliver a $300,000 bond payable to the Commissioner of Agriculture instead. The authority is Florida Statutes 527.04(2). The bond is filed on form FDACS-03587 and the license fee is $65 per year.

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How to Apply for a LP Gas Indemnity - Category 3 ($300,000) Bond:

Confirm the operation fits the Category III definition: storage of filled propane cylinders of not more than 43.5 pounds propane capacity awaiting sale or exchange.
Complete FDACS-03580, the LP Gas Category III Cylinder Exchange Operator License Application.
Choose between a $300,000 primary liability policy and a $300,000 bond.
If bonding, have the surety execute FDACS-03587 payable to the Commissioner of Agriculture.
Send the bond with the application and the $65 annual license fee.
Keep the bond current through each licensed year of an annual, biennial or triennial renewal.

Detailed Information About the Florida LP Gas Indemnity - Category 3 ($300,000) Bond:

Who counts as a Category III operator

Florida Statutes 527.01 defines a Category III liquefied petroleum gas cylinder exchange operator as any person operating a storage facility used for storing filled propane cylinders of not more than 43.5 pounds propane capacity that are awaiting sale or exchange. Selling gas by delivery, dispensing liquid product to consumers or installing systems falls under Category I, II or V, which carry the $1 million requirement.

The $300,000 figure and the bond option

Section 527.04(2) says that before a Category III license is issued, the applicant must prove a primary bodily injury and property damage liability policy of not less than $300,000. In lieu of that policy, the applicant may deliver a good and sufficient bond of $300,000, payable to the Commissioner of Agriculture, with a surety company authorized in Florida. The bond is conditioned on compliance with Chapter 527 and department rules and must indemnify and hold harmless all persons from loss or damage caused by a failure to comply.

What is outside the chapter

Section 527.02 exempts the sale of cylinders with a volume of 10 pounds water capacity or 4.2 pounds liquefied petroleum gas capacity or less from Chapter 527. Category IV dealers in appliances and equipment are also excluded from the insurance and bond requirement in 527.04(1).

Paperwork and renewal

Rule 5J-20.004 adopts FDACS-03580, the LP Gas Category III Cylinder Exchange Operator License Application, and FDACS-03587, LP Gas Indemnity Bond. The Category III fee is $65 per year under 527.02. Under 527.03 the license may be renewed annually, biennially or triennially, every renewal must meet the same conditions for each licensed year, and a license allowed to expire becomes inoperative.

Eligibility and Requirements for a Florida LP Gas Indemnity - Category 3 ($300,000) Bond:

Bond amount of $300,000 under section 527.04(2).
Surety company authorized to do business in Florida.
Commissioner of Agriculture as obligee.
Business name on the bond matching the Category III application.
A new bond if the department finds the existing one insufficient.

Florida LP Gas Indemnity - Category 3 ($300,000) Bond FAQs:

Why is my bond $300,000 when other LP gas licenses need $1 million?

Section 527.04 treats Category III cylinder exchange operators separately. Subsection (2) sets their figure at $300,000, while subsection (1) holds Category I, II, V and VI licensees to $1 million.

Does the bond replace the liability policy?

Yes. The statute lets the applicant deliver a $300,000 bond in lieu of the $300,000 liability policy. Either one satisfies the requirement.

Does a store that sells only small camping cylinders need this license?

Section 527.02 exempts the sale of cylinders with a volume of 10 pounds water capacity or 4.2 pounds liquefied petroleum gas capacity or less from Chapter 527. An operator storing larger filled propane cylinders, up to 43.5 pounds propane capacity, for sale or exchange fits the Category III definition.

What if the bond is canceled mid term?

If the bond becomes insufficient, the department may require a new bond. If the licensee does not file one, the department cancels the license and gives written notice that it is unlawful to keep operating without a license.