Texas Surplus Lines Agent BondShort Answer: Texas Doesn't Require One
Senate Bill 1564 repealed Insurance Code §981.206 — the section that required a $50,000 surety bond for surplus lines licensure — effective January 1, 2006. Today, §981.202 requires only the surplus lines license itself. If you searched for this bond because you're licensing as a Texas surplus lines agent, you can stop budgeting for it.
That is not the end of the story, though. Two other bonds still apply to Texas insurance professionals: a $25,000 bond for corporate and partnership agencies (Tex. Ins. Code §4001.106) and a $10,000 bond per public insurance adjuster (Chapter 4102). The table further down sorts out which one, if any, is actually yours.
- Verified against the SB 1564 bill analysis and TDI's own application checklist
- We quote the bond that's actually required — never a repealed one
- Insurance agency, surplus lines, and public adjuster bonds compared side by side
This quotes the $25,000 Texas Insurance Agency Bond (§4001.106) — the current requirement for corporate/partnership agencies, not the repealed surplus lines bond.
- Who requires it: The Texas Department of Insurance (TDI), under Ins. Code §4001.106.
- Amount: $25,000, as a surety bond (TDI Form FIN505) or errors and omissions coverage. Texas repealed its $50,000 surplus lines agent bond in 2006.
- Timing: Same-day submission; most quotes within one business day.
The 2006 Repeal: What SB 1564 Actually Did
Before 2006, Texas surplus lines agents proved financial responsibility the same way most states still do — a bond, sized at $50,000, filed with the department. The 79th Legislature's Senate Bill 1564 ended that. The official bill analysis states plainly that the act “repeals the current requirement for a $50,000 surety bond as a condition of licensure for surplus lines agents,” accomplished by deleting the financial-responsibility language from §981.203 and repealing §981.206 outright. The change took effect January 1, 2006 — the stated legislative goal was aligning Texas with the growing number of states dropping surplus lines bonding requirements, and easing reciprocal, multi-state surplus lines licensure.
Official Texas Requirements
"An agent licensed by this state may not issue or cause to be issued an insurance contract with an eligible surplus lines insurer unless the agent possesses a surplus lines license issued by the department."Texas Insurance Code — current statute • Tex. Ins. Code §981.202
Note what §981.202 does not say: nothing about a bond, a letter of credit, or any other financial instrument. That silence is the point — the license is the entire requirement now. Compare that to a state that never repealed its version: California still requires a $50,000 surplus lines broker bond under Cal. Ins. Code §1765, with no equivalent sunset. Texas and California sit at opposite ends of the same regulatory question.
Why You'll Still Find This Bond “For Sale”
Searching “Texas surplus lines agent bond” today still surfaces surety agencies quoting a $50,000 product, twenty years after the requirement disappeared. That is not a scam — it is stale content. A handful of bond sellers built a product page for this bond before 2006, priced it, optimized it for search, and never revisited it after the repeal. The $50,000 figure those pages quote is historically accurate; it is simply no longer a legal requirement, and none of TDI's current surplus lines materials mention any bond at all.
The practical lesson: when a bond amount is central to your licensing budget, check it against the regulator's own current checklist — TDI's surplus lines application page — not a bond seller's marketing page. Our own insurance broker bonds hub runs this same verification across every state, which is exactly how we caught that Texas is the outlier, not the norm.
What TDI Still Requires to License a Surplus Lines Agent
Dropping the bond didn't simplify everything — the license itself still has real prerequisites, verified against TDI's own checklist:
- A prerequisite license already in hand — Texas residents need an active general lines agent, property and casualty agent, or managing general agent license first. Non-residents qualify through a reciprocal state's surplus lines license.
- Passing exam and fingerprints — the exam must be passed before applying, and the application must follow within one year or the exam has to be retaken.
- A $50 application fee, filed electronically through Sircon or the National Insurance Producer Registry.
- No shortcut license exists — TDI explicitly offers no temporary, emergency, or provisional surplus lines permit, so the full application above is the only path in, storm season or not.
The tax side of the job also didn't go away with the bond. Every surplus lines placement carries a 4.85% surplus lines premium tax, reported annually to the Texas Comptroller, plus a 0.04% stamping fee paid to the Surplus Lines Stamping Office of Texas (SLTX) on every filed policy — reduced from 0.075% effective January 1, 2024. Neither of those is a bond, but both are recurring compliance costs the license carries that the old bond never touched.
The Bond That Actually Applies: The $25,000 Agency Bond
Separate from surplus lines entirely, Tex. Ins. Code §4001.106 requires any corporation or partnership applying for a Texas insurance agent/agency license to prove it can pay up to $25,000 for a customer's loss caused by the agency's negligent acts or omissions. TDI's own Form FIN505 — the “Insurance Agency Bond” — is the standard way to satisfy it, payable to TDI for the benefit of the agency's customers, executed by the entity as principal and a Texas-authorized surety.
What is easy to miss: the bond is not the only option. The statute lets an agency substitute an errors and omissions policy of at least $250,000, with a deductible capped at 10%, from an authorized or eligible surplus lines insurer. Either path satisfies TDI — you pick based on what's cheaper and easier for your agency to carry.
Two Paths to Satisfy §4001.106
Either one satisfies the corporate/partnership agency license requirement
| Compliance Path | Amount | Who Issues It | How It Works |
|---|---|---|---|
| Surety Bond | $25,000 | Licensed Texas surety company | Fixed annual premium (credit-based); bond stays in force indefinitely — surety gives TDI 30 days' written notice to cancel. |
| Errors & Omissions Policy | $250,000 minimum, ≤10% deductible | Admitted or eligible E&O carrier | Ongoing E&O premium set by underwriting; cancellation follows the policy's own terms, and TDI must be notified of lapses. |
Applies only to corporation and partnership agency license applicants — individual/sole proprietor producers are not subject to §4001.106.
Sources: Tex. Ins. Code §4001.106 (statutes.capitol.texas.gov); TDI Form FIN505 (tdi.texas.gov)
Once filed, the FIN505 bond has an unusual feature for a Texas license bond: it stays in force indefinitely rather than renewing annually. The surety can only end it by giving TDI 30 days' written notice. That means, unlike a typical continuous bond that quietly auto-renews on a term date, this one simply keeps running until someone actively cancels it — a detail worth knowing before you assume a lapse notice means something changed on your end.
Forming a Texas Agency as a Corp or LLC?
If you're incorporating your book of business or bringing on partners, the $25,000 agency bond is the real requirement to plan for — not the repealed surplus lines bond.
Get My Agency Bond QuoteNot incorporating? See how bond pricing works generally in our surety bond cost guide.
Three Texas Insurance Licenses, Three Different Bond Answers
“Insurance broker bond” searches in Texas usually mean one of these three license types — and each has a completely different bond answer. Find yours before you budget for anything.
Texas Insurance-License Bond Requirements
Statute-verified amounts across the three license types most often confused with each other
| License Type | Bond Amount | Governing Law | Key Detail |
|---|---|---|---|
| Surplus Lines Agent | $0 — repealed 2006 | Tex. Ins. Code §981.202 (license only); former §981.206 repealed by SB 1564 | License required, no bond. Prerequisite TX general lines/P&C/MGA license (or reciprocal), pass exam, $50 fee via Sircon/NIPR. |
| Insurance Agency (corp./partnership) | $25,000 bond or $250,000 E&O | Tex. Ins. Code §4001.106; TDI Form FIN505 | Applies to corporate/partnership agency licenses only. Bond or E&O — applicant's choice. Individual producers are exempt. |
| Public Insurance Adjuster | $10,000 per licensee | Tex. Ins. Code Ch. 4102; 28 TAC §19.711; TDI Form FIN509 | One bond per individual and per agency license — no sharing, no DBAs. See our dedicated FIN509 page. |
Verified against Texas statute and TDI's own application materials as of August 2026. Amounts and requirements change — confirm your specific case with TDI or ask us to confirm it for you.
Sources: statutes.capitol.texas.gov; tdi.texas.gov; capitol.texas.gov (SB 1564 bill analysis)
The pattern worth remembering: Texas bonds the entity structure (corporate or partnership agencies) and the client-facing role (public adjusters), but not the line of authority (surplus lines). A surplus lines agent who also owns a corporate agency could owe the $25,000 agency bond — not because they sell surplus lines, but because they incorporated.
If You're Actually Looking for the Public Adjuster Bond
Public insurance adjusters get folded into “insurance broker” searches constantly, but they are licensed under an entirely different chapter with a bond that is very much still active: $10,000 per license under Tex. Ins. Code Chapter 4102, filed on TDI Form FIN509. Unlike the agency bond above, there is no entity exemption — every individually licensed adjuster files their own bond, and an agency license needs its own on top of that.
Read the full Texas public adjuster bond breakdown ($10,000, FIN509, Sircon filing)From the Producer's Desk: The Call We Get Every Year
At least a few times a year, someone calls asking to buy a “$50,000 Texas surplus lines bond” because that's what a search result told them they needed. The conversation is almost always short: no, Texas doesn't require that bond, hasn't since 2006, and we're not going to sell you a product that doesn't satisfy any actual requirement just because it's what you asked for. That's the whole reason this page exists — to be the correction, not another stale product listing.
The follow-up question is almost always more useful than the original one: “so what do I need?” And that answer depends entirely on how the business is structured. A solo surplus lines producer, no bond, full stop. The same producer incorporating their book into an LLC to bring on a partner, suddenly the $25,000 agency bond is real and due at formation — not because of the surplus lines line of authority, but because of the entity choice. Getting that distinction right the first time avoids buying a bond nobody asked for, or worse, missing the one that actually is required.
All content is researched from official state and federal sources (.gov). BuySuretyBonds.com works with Treasury-listed surety carriers.
Texas Surplus Lines & Insurance Agency Bond FAQs
Does Texas require a bond for a surplus lines agent license?
No. Texas required a $50,000 surplus lines agent bond until Senate Bill 1564 repealed Insurance Code §981.206 effective January 1, 2006. Today, Tex. Ins. Code §981.202 requires only the surplus lines license itself — no bond, no letter of credit, no other proof of financial responsibility is on TDI's application checklist. If a site quotes you a "Texas surplus lines bond," it is not a current state requirement.
Why do some surety bond companies still sell a "$50,000 Texas surplus lines bond"?
Some bond agencies never updated their Texas product pages after the 2006 repeal, or they list it as a legacy SEO page that still ranks. The $50,000 figure is real history — it was the exact bond amount required before SB 1564 — but it has not been a legal requirement for two decades. Always cross-check a stated bond requirement against the regulator's own application checklist, not a bond seller's product page.
What bond does a Texas insurance agency actually need?
If your agency is organized as a corporation or partnership (including an LLC or LLP), Tex. Ins. Code §4001.106 requires it to prove the ability to pay up to $25,000 in customer losses — either a $25,000 surety bond (TDI Form FIN505) or an errors and omissions policy of at least $250,000 with no more than a 10% deductible. This is separate from surplus lines licensing and applies to entity-level agency licenses generally, not just surplus lines agencies.
Can I use E&O insurance instead of the $25,000 agency bond?
Yes. Section 4001.106 treats the two as interchangeable — the bond and the E&O policy both satisfy the same $25,000 customer-protection requirement, and TDI does not require both. Most agencies choose the surety bond because it is a fixed, predictable annual premium rather than an underwritten E&O file, but if your agency already carries qualifying E&O coverage (minimum $250,000, maximum 10% deductible), you likely don't need to also buy the bond.
I'm a solo producer, not a corporation — do I need this bond?
No. Section 4001.106 applies to corporations and partnerships applying for an agency license — not to individually licensed producers operating as sole proprietors. If you hold a personal resident producer license and are appointed by the carriers you write for, Texas requires no bond at all, surplus lines or otherwise. The bond only enters the picture the moment you form a corporate or partnership entity to hold the agency license.
Does the Texas insurance agency bond cover my public adjuster license too?
No — they are entirely separate license classes with separate bonds. The Texas public insurance adjuster license requires its own $10,000 bond per licensee under Tex. Ins. Code Chapter 4102 (TDI Form FIN509), regardless of whether your agency already carries the $25,000 §4001.106 bond. A firm running a public adjusting practice through a corporate agency could need both instruments at once — see our dedicated Texas public adjuster bond page for the FIN509 details.
Related Texas & Insurance-License Bond Resources
Insurance Broker Bonds (Hub)
Every state's surplus lines, title, bail, and premium finance bond — verified amounts and who's actually exempt.
California Surplus Lines Bond ($50,000)
The bond Texas repealed is still very much required next door — see how CDI enforces it.
Texas Public Adjuster Bond ($10,000)
FIN509, one bond per licensee, Sircon filing detail.
Title Agency Bonds
The larger, fiduciary-grade bond class for title insurance agencies — Texas indexes it to premium volume (greater of $10,000 or 10%, capped at $100,000).
Texas Surety Bonds (Hub)
Every Texas statutory bond requirement, from contractor licensing to court bonds.
Get a Texas Agency Bond Quote
$25,000 FIN505 bond (or E&O routing) for corporate and partnership agencies.
Verification Methodology
The 2006 surplus lines bond repeal and its January 1, 2006 effective date were verified against the official Senate Bill 1564 bill analysis (capitol.texas.gov) and the current text of Tex. Ins. Code §981.202 (statutes.capitol.texas.gov). The absence of any bond on the current surplus lines checklist was verified against TDI's own surplus lines application page (tdi.texas.gov/agent/surplus-lines-apply.html). The $25,000 agency bond / $250,000 E&O alternative was verified against the text of Tex. Ins. Code §4001.106 and TDI Form FIN505. The surplus lines premium tax (4.85%) and current stamping fee (0.04%, reduced from 0.075% effective January 1, 2024) were verified against the Texas Comptroller and the Surplus Lines Stamping Office of Texas (SLTX). The $10,000 public adjuster bond figure is maintained independently on our Texas public adjuster bond page and verified there.
Know Which Bond You Actually Need
No surplus lines bond to buy in Texas — but if you're incorporating your agency or licensing as a public adjuster, the right bond is a phone call away.