Washington Escrow Agent Business Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a Washington Escrow Agent Business bond.
*This page focuses exclusively on the $10,000 license bond required for escrow agents operating in Washington. Escrow agents that are registered as a business entity must also obtain a $1,000,000 Fidelity bond or similar insurance coverage. Contact BondExchange to obtain a Fidelity bond.
At a Glance:
- Lowest Cost: $100 per year or $10 a month
- Bond Amount: $10,000
- Who Needs It: All escrow agents operating in the State of Washington
- Purpose: To protect the public from financial harm if the escrow agent commits fraud or engages in unfair business practices
- Who Regulates Escrow Agents in Washington: The Washington Department of Financial Institutions
Background
Revised Code of Washington 18.44.021 requires all escrow agents operating in the state to obtain a license from the Department of Financial Institutions. The Washington Legislature enacted the licensing requirement to ensure that escrow agents do not engage in unethical business practices. To provide financial security for the enforcement of the licensing law, escrow agents must purchase and maintain a $10,000 surety bond to be eligible for licensure.
What Is the Purpose of the Washington Escrow Agent Business Bond?
Washington requires all escrow agents to purchase a surety bond as part of the application process to obtain a license. The bond ensures that restitution is available to any damaged party should the escrow agent fail to abide by the regulations outlined in the Revised Code of Washington Title 18, Chapter 18.44. Specifically, the bond protects claimants if the escrow agent commits fraud or engages in unfair business practices. In short, the bond is a type of insurance that protects the public if the escrow agent violates the terms of their license.
How Can an Insurance Agent Obtain a Washington Escrow Agent Business Bond?
BondExchange makes obtaining a Washington Escrow Agent Business bond easy. Simply log in to your account and use our keyword search to find the “escrow agent business” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
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Is a Credit Check Required for the Washington Escrow Agent Business Bond?
Surety companies will run a credit check on the applicant to determine eligibility and pricing for the Washington Escrow Agent Business bond. Escrow agents with excellent credit and work experience can expect to receive the best rates. Escrow agents with poor credit may be declined by some surety companies or have to 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 Washington Escrow Agent Business Bond Cost?
The Washington Escrow Agent Business bond can cost between $100 to $500 per year or $10 to $50 per month. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below briefly references the approximate bond cost on the $10,000 bond requirement.
$10,000 Washington Escrow Agent Business Bond Cost
| Credit Score* | Bond Cost (1 Year) | Bond Cost (1 month) |
|---|---|---|
| 625 – 720+ | $100 | $10 |
| 600 – 624 | $250 | $25 |
| 575 – 599 | $300 | $30 |
| 500 – 574 | $500 | $50 |
*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.
How Does Washington Define “Escrow Agent”?
To paraphrase Revised Code of Washington 18.44.011, an escrow agent is any individual or business entity that holds property in a trust for a third party until certain conditions have been met. For example, when an individual is purchasing a house, an escrow agent will hold onto the title to the property and the initial down payment until both the buyer and seller meet all of their contractual obligations.
Exemptions to these definitions include:
- Banks, trust companies, building/loan or savings/loan associations, credit unions, or insurance companies
- Licensed attorneys performing their regular duties
- Licensed abstractors performing title searches for the issuance of a title insurance policy
- Licensed real estate brokers
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 Escrow Agents Become Licensed in Washington?
Escrow agents in Washington must navigate several steps to obtain a license. Below are the general guidelines, but applicants should refer to the Department’s Escrow Agent and Officer Licensing webpage for details on the process.
License Period – Washington escrow agent licenses expire one year after the date of issuance.
Step 1 – Fulfill Financial Requirements
Escrow agents operating in the State of Washington must purchase and maintain a surety bond. In addition, a $50,000 Errors and Omissions Policy and a $1,000,000 Fidelity bond are mandated by the Department of Financial Institutions.
Step 2 – Pass Licensing Test
Individuals applying for an escrow agent license in Washington must take and pass the licensing test offered by PearsonVUE. Registration for the test can be done online or via the phone. Walk-in tests are not available. Follow the instructions in the Candidate Handbook to register.
Step 3 – Complete License Application
Fill out and submit the Washington Escrow Officer License Application to the Washington Department of Financial Institutions. An application fee of $179.26 and a fingerprint card processing fee of $34.25 are required.
How Do Escrow Agents in Washington Renew Their Licenses?
Washington escrow agent licenses expire one year after the date of issuance. A renewal application must be submitted to the Department of Financial Institutions on or before the licensee’s expiration date. A renewal application fee applies.
What Are the Insurance Requirements for Escrow Agents in Washington?
According to the Revised Code of Washington 18.44.210, the escrow agent must purchase and maintain an Errors and Omissions policy with a $50,000 minimum coverage.
How Do Escrow Agents File Their Bonds in Washington?
Escrow agents should submit their completed bond forms, including the power of attorney when submitting their license applications to the Washington Department of Financial Institutions (see the mailing address listed below).
Washington Department of Financial Institutions
Division of Consumer Affairs
PO Box 41200
Olympia, WA 98504
The surety bond requires signatures from the surety company, as well as the escrow agent. The surety company should include the following information on the bond form:
- The legal name of the individual buying the bond
- Surety company’s name
- Date the bond is signed
What Can Washington Escrow Agents Do to Avoid a Claim Against Their Surety Bond?
The easiest way to avoid a claim as an escrow agent is to comply with all applicable license regulations. Common actions that can cause an official bond claim are listed below:
- Negligence
- Default
- Misrepresentation
- Fraud
For example, failure to maintain accurate/current accounting and finance records of all business transactions is subject to a negligence violation. If the violation remains unresolved by the licensee, a bond claim may be filed.
What Other Insurance Products Can Agents Offer Escrow Agents in Washington?
The Washington Department of Financial Institutions requires escrow agents to purchase coverage for a $50,000 Errors and Omissions policy, which is just another name for professional liability insurance. Bonds are our only business at BondExchange, so we do not issue any other types of 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 Escrow Agents Customers in Washington?
Washington conveniently provides a public database to search for active escrow agent businesses in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.