Class E third party driving exam administrator bond cost
All third parties wishing to become exam administrators for Class E driver’s licenses are required to provide a surety bond as part of the licensing process established by the Department of Highway Safety and Motor Vehicles. Many testing administrators are actually required to purchase two surety bonds, as there is a specific bond for administrators of the written portion of the exam, as well as another for the driving skills portion, and each bond amount is set at $200,000. Therefore, if a third party wishes to conduct both written and driving skills examinations, they will need $400,000 worth of coverage.
Since the required bond amount is so large, strict underwriting is required in order to issue this bond. Along with viewing the applicant’s credit report, new business owners will also need to provide strong financials in order to be approved for this bond. Those who have exceptional credit may receive an approval on this bond for as little as 1% of the total amount, or $2,000-$4,000 depending on if you need one or both bonds.
Why this bond
Due to the large number of exams administered—over 300,000 written and over 400,000 driving skills in 2013 alone—and the fact that each test taker is required to provide personal information, such as their social security number, date of birth, etc. to the administrator, the department perceives a high possibility of fraud. Therefore the bond(s) is in place in order to protect the department as well as test takers from fraud by making them whole should it occur.
In the event that a claim is filed against an administrator’s bond and it is found that fraud has been committed, the department may require everyone who took their exam with that administrator to be re-examined. The surety will also pay out up to $200,000 per bond in order to settle the claim with the department, at which point it becomes the responsibility of the test administrator to reimburse the surety for all money paid to settle the claim.
For more information on the specific bond requirement, see the Third Party Administrator Vendors Frequently Asked Questions on the department website.
Class E third party driving exam administrator bond details
Class E third party driving exam administrator bonds in Florida are issued on 1-year terms. Unlike some bonds that may be canceled by the surety by giving a certain amount of advance notice, these bonds remain in effect for the entire duration of the term. Should the surety decide they wish to be rid of their obligation to back the bond, they may choose not to renew the bond at the time of cancellation.
Should a claim be made against the bond at any point while it is effective, whether it be during the first term, or any term thereafter, the amount of liability shall never exceed $200,000 per bond.
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