Norfolk Precious Metal Dealer Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 per year or $10 per month
- Bond Amount: $10,000
- Who Needs it: All precious metal dealers operating in Norfolk, Virginia
- Purpose: To protect the public from financial harm if the precious metal dealer violates the terms of their permit
- Who Regulates Precious Metal Dealers in Norfolk: The Norfolk Police Department
Background
Virginia Code 54.1-4108 requires all precious metal dealers operating in the state to obtain a permit from their city or county’s local law enforcement agency. The Virginia legislature enacted the permitting requirement to ensure that precious metal dealers engage in ethical business practices. To provide financial security for the enforcement of the permitting law, precious metal dealers must purchase and maintain a $10,000 surety bond to be eligible for a permit.
What is the Purpose of the Norfolk Precious Metal Dealer Bond?
Norfolk requires precious metal dealers to purchase a surety bond as part of the application process to obtain a permit. The bond protects the public from financial harm if the dealer fails to comply with the regulations set forth in Norfolk Code of Ordinances 38-90. 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 permit.
How Can an Insurance Agent Obtain a Norfolk Precious Metal Dealer Surety Bond?
BondExchange makes obtaining a Norfolk 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.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensure 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 Norfolk Precious Metal Dealer Bond?
No, a credit check is not required for the Norfolk Precious Metal Dealer bond. Because the bond is considered relatively low risk, the same low rate is offered to all precious metal dealers operating in the city, regardless of their credit history.
How Much Does the Norfolk Precious Metal Dealer Bond Cost?
The Norfolk Precious Metal Dealer bond costs just $100 per year or $10 per month.
Who is Required to Purchase the Bond?
Norfolk requires all precious metal dealers to purchase a surety bond as a prerequisite to obtaining a permit. To paraphrase Norfolk Code of Ordinances 38-85, a precious metal dealer is a person who purchases and sells secondhand items containing precious metals such as gold, silver, jewelry, and other items containing precious metals or gems from the general public.
Exemptions to this definition include:
- Purchases of precious metals directly from manufacturers
- Qualified fiduciaries distributing an estate’s assets
- Banks, trust companies, or bank holding companies
- Antique or gem exhibitions sponsored by nonprofit organizations
- Repairing, restoring, or designing jewelry
- Purchases of nonprecious scrap metals
- Purchases or sales of coins
Virginia Code 54.1-4106 allows dealers to obtain an irrevocable letter of credit in lieu of a surety bond. Surety bonds are generally considered the better option for businesses as they free up working capital. For more information on whether your customer should purchase a bond or deposit cash, check out our Surety Bonds vs. Letters of Credit article here.
BondExhange 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 Permit in Norfolk?
Precious metal dealers in Norfolk must navigate several steps to obtain a permit and must obtain a separate permit for each business location they operate. Below are the general guidelines, but applicants should refer to the regulatory ordinances for details on the process.
Permit Term – All Norfolk Precious Metal Dealer Permits expire one year from the date of issuance and must be renewed before the expiration date.
Step 1 – Contact the Police Department
To obtain a permit application, dealers must contact the Norfolk Police Department by email or by phone at (757) 664-3277. The department will walk them through the application process, provide them with all required forms, and answer any questions they may have.
Dealers are required to be fingerprinted by the department, complete a background check, and have their weights and measurements inspected. Applicants convicted of a felony or crime of moral turpitude within the past seven years are not eligible for a permit. All applicants must pay a $200 permit fee for themselves and a $50 fee for each employee of the business.
Step 2 – Purchase a Surety Bond
Precious metal dealers must purchase and maintain a $10,000 surety bond.
How Do Norfolk Precious Metal Dealers Renew Their Permit?
Precious metal dealers should contact the Norfolk Police Department to renew their permit before their existing one expires. Dealers must pay a $200 renewal fee and ensure they renew their surety bond to avoid termination of their permit. All Norfolk Precious Metal Dealer Permits expire one year from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for Precious Metal Dealers in Norfolk?
Norfolk does not require precious metal dealers to purchase any additional insurance. Dealers must purchase and maintain a $10,000 surety bond.
How Do Norfolk Precious Metal Dealers File Their Bonds?
Precious metal dealers should mail or deliver their completed bond forms, including the power of attorney, to the Norfolk Police Department at the following address:
100 Brooke Avenue
Norfolk, VA 23510
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
- Date the bond is signed and goes into effect
- Dealer’s business name and address
What Can Norfolk Precious Metal Dealers do to Avoid Claims Made Against Their Bonds?
To avoid claims against their bonds, precious metal dealers in Norfolk must ensure that they:
- Do not engage in any acts of fraud
- Faithfully honor all consumer contracts
- Do not purchase or sell any stolen goods
- Maintain all required transaction records
- Obtain identification before each transaction
What Other Insurance Products Can Agents Offer Precious Metal Dealers in Norfolk?
Norfolk does not require precious metal dealers to purchase liability insurance. However, most reputable businesses will purchase this insurance anyway. 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. Agents can access a list of brokers online here.
How Can Insurance Agents Prospect for Norfolk Precious Metal Dealer Customers?
Norfolk unfortunately does not provide a public database of active precious metal dealers in the city. However, we suggest contacting the Norfolk Police Department to obtain this information. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.
