Suffolk County Precious Metal Dealer Bond: A Comprehensive Guide
At a Glance:
- Lowest Cost: $100 per year or $10 per month, based on the applicant’s credit
- Bond Amount: $5,000
- Who Needs it: All precious metal dealers operating in Suffolk County, New York
- Purpose: To protect the public from financial harm if the precious metal dealer violates the terms of their license
- Who Regulates Precious Metal Dealers in Suffolk County: The Suffolk County Department of Labor, Licensing and Consumer Affairs
Background
Suffolk County Code 563-37 requires all precious metal dealers operating in the county to obtain a license from the Department of Labor, Licensing and Consumer Affairs. The Suffolk County Government enacted the licensing requirement to ensure that precious metal dealers engage in ethical business practices. To provide financial security for the enforcement of the licensing law, precious metal dealers must purchase and maintain a $5,000 surety bond to be eligible for licensure.
What is the Purpose of the Suffolk County Precious Metal Dealer Bond?
Suffolk County requires precious metal dealers to purchase a surety bond as part of the application process to obtain a business license. The bond protects the public from financial harm if the dealer fails to comply with the regulations set forth in Suffolk County Code 563-40. Specifically, the bond protects the public if the dealer engages in any acts of fraud or breaches consumer contracts. In short, the bond is a type of insurance that protects the public if the precious metal dealer violates the terms of their license.
How Can an Insurance Agent Obtain a Suffolk County Precious Metal Dealer Surety Bond?
BondExchange makes obtaining a Suffolk County Precious Metal Dealer bond easy. Simply log in to your account and use our keyword search to find the “Precious Metal Dealer” bond in our database. Don’t have a login? Gain Access now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
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Is a Credit Check Required for the Suffolk County Precious Metal Dealer Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Suffolk County Precious Metal Dealer bond. Applicants with excellent credit and work experience can expect to receive the best rates. Applicants with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the applicant’s credit.
How Much Does the Suffolk County Precious Metal Dealer Bond Cost?
The Suffolk County Precious Metal Dealer bond can cost anywhere between $100 to $250 per year or $10 to $25 per month. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the approximate bond cost on the $5,000 bond requirement.
$5,000 Precious Metal Dealer Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 600+ | $100 | $10 |
| 550 – 599 | $125 | $13 |
| 525 – 549 | $150 | $15 |
| 500 – 524 | $250 | $25 |
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
Who is Required to Purchase the Bond?
Suffolk County requires precious metal dealers to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Suffolk County Code 563-36, a precious metal dealer is a person who purchases, sells, or exchanges secondhand items containing precious metals such as gold, silver, jewelry, and other items containing precious metals or gems.
Collateral loan brokers, also known as pawnbrokers, as defined in Article 5 of the New York General Business Law are also subject to the bonding requirement and must purchase a surety bond prior to conducting business. Banks and other licensed financial institutions are exempt from the bonding requirement.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
How Do Precious Metal Dealers Apply for a License in Suffolk County?
Precious metal dealers in Suffolk County must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the application checklist for details on the process.
License Period – All Suffolk County Precious Metal Dealer Licenses expire two years from the date of issuance and must be renewed before the expiration date.
Step 1 – Purchase a Surety Bond
Precious metal dealers must purchase and maintain a $2,000 surety bond.
Step 2 – Complete the Application
Precious metal dealers must complete an application in-person with the Department of Labor, Licensing and Consumer Affairs at the following address:
725 Veterans Memorial Hwy
Smithtown, NY 11788
Applicants must complete the form in its entirety and submit the following items:
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- $400 licensing fee
- $200 application fee
- Surety bond
- Passport photo
- Driver’s license or state-issued identification
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Dealers who plan to have more than one location in Suffolk County must obtain a supplementary license and pay a $100 fee for each additional location. All fees must be paid in check or money order, as the department will not accept any cash. Contact the Department of Labor, Licensing, and Consumer Affairs for additional assistance in the application process.
How Do Suffolk County Precious Metal Dealers Renew Their Licenses?
Precious metal dealers should contact the Department of Labor, Licensing and Consumer Affairs to obtain a renewal application before their license expires. Dealers must also ensure they renew their surety bond to avoid termination of their license. All Suffolk County Precious Metal Dealer Licenses expire two years from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Precious Metal Dealers in Suffolk County?
Suffolk County does not require precious metal dealers to purchase any form of liability insurance. However, dealers may need to obtain insurance as a prerequisite to obtaining a state license. Precious metal dealers must also purchase and maintain a $2,000 surety bond.
How Do Suffolk County Precious Metal Dealers File Their Bonds?
Precious metal dealers should submit their completed bond forms, including the power of attorney, to the Department of Labor, Licensing, and Consumer Affairs at the following address:
725 Veterans Memorial Hwy
Smithtown, NY 11788
The bond requires signatures from both the surety company that issues the bond and the applicant. The surety company should include the following information on the bond form:
- Legal name of the entity/individual(s) buying the bond
- Surety company’s name and state of incorporation
- Name of the obligee and the license type being applied for
- Date the bond is signed and goes into effect
- Bond amount
What Can Suffolk County Precious Metal Dealers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, precious metal dealers in Suffolk County must ensure that they:
- Do not engage in any acts of fraud
- Faithfully honor all consumer contracts
- Maintain all consumer contracts
What Other Insurance Products Can Agents Offer Precious Metal Dealers in Suffolk County?
Most reputable precious metal dealers will purchase liability insurance. Bonds are our only business at BondExchange, so we do not issue liability insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Suffolk County Precious Metal Dealer Customers?
Suffolk County unfortunately does not provide a public database of active precious metal dealers in the county. We suggest contacting the Department of Labor, Licensing and Consumer Affairs to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.