What does it mean to be licensed, bonded, and insured?

For an insurance producer, being licensed means holding a state license to sell, solicit, or negotiate insurance, which every state requires before transacting business. Being bonded means carrying a surety bond; some states require one when a producer places insurance with a company the producer does not have an appointment with, such as Illinois, which sets a $2,500 minimum. Being insured typically means carrying errors-and-omissions liability coverage, which Texas accepts as proof of financial responsibility for agency license applications.

Each term has a distinct meaning in Washington licensing. Licensed means holding a producer license from the state Office of the Insurance Commissioner, earned by passing the exam and clearing a background check. Bonded means posting a surety bond, such as the $5,000 bond all public adjusters must file. Insured means carrying your own coverage, such as the auto liability insurance Washington requires of anyone who drives.