Escrow Agent Fidelity Bond Policy
Working with an experienced surety broker can provide an edge in obtaining the best results for placing and pricing for your escrow agent fidelity bond policy. Mark Levinson, Senior Vice President of Surety, has extensive experience in providing this type of bond. He has developed strong relationships with the leading surety bonding companies to supply our clients with access to more favorable terms and conditions. In many cases, we can provide both the bond and the fidelity crime policy with one application.
What Is an Escrow Agent Fidelity Bond Policy
This escrow agent fidelity bond policy is also referred to as a fidelity bond, surety bond, fidelity crime policy, and fidelity policy. Regardless of the name, this product protects a escrow agent’s clients and their lenders from the dishonest acts and financial losses the escrow agent can cause. These accounts can swell to high levels during peak periods of activity, so as a result most lenders—and many states—require that this coverage be in place.
Because this can be a difficult class of business to get placed, escrow agents will want to work with an experienced surety agency like Brunswick Companies to make certain their bond and policy meet state and lender requirements for coverage.
How Much Does a Fidelity Bond Policy Cost?
The exact cost is a fraction of the total amount of the bond, but that amount varies by state. For example, an escrow agent in Louisiana will need to be $100,000, but the bond is $25,000 for agents in Maryland. For more information about state requirements, visit the NMLS Resource Center webpage on State Licensing.
Bond cost is determined by several factors, the most important of which is the agent’s personal credit score. Agents with a high score can expect a rate between 1% and 3% of the total bond amount. As the agent’s credit score goes down, the rate goes up. Brunswick Companies can provide you with a quick quote after they collect all necessary information about the agent and the agency.
Fidelity Bond Policy Claim Example
An escrow agent was convicted of diverting funds from a title company’s escrow accounts and using the money for her own personal use and benefit. The escrow agent manipulated the financial transactions associated with five different real estate closings. Over seven months, she issued checks drawn on the company’s trust or operating accounts and deposited them into her personal accounts for her own living expenses and multiple vacations. The loss claimed was approximately $470,000.