Freight Broker Bond Guide
Why do you need a freight broker bond?
You are required to get a surety bond for your freight broker business to protect shippers and motor carriers. If you do not follow FMCSA regulations, a claim will be filed on your bond. For example, if you do not pay motor carriers when necessary, a claim can be made.
Most likely. We can approve nearly any freight broker or forwarder with good or bad credit, and never require collateral. Apply to get an instant approval. This is made possible by our high risk market, which is exclusive to our agency. If you go to another agency, they will likely broker the bond through us, possibly costing you extra money and time.
The BMC-84 is the form used for the surety bond option, which only costs a percentage of the required bond amount. The surety bond is a form of surety credit to you, as the surety company is guaranteeing you will follow FMCSA regulations. Since you do not need to post collateral with the surety bond, this frees up working capital, improves your liquidity, and helps you operate a more financially sound business.
The BMC-85 form is used for the trust fund option, which requires your cash to be held by a bank in the full requirement amount. Your funds act as the guarantee that you will not trigger any claims, and will be held as long as you have an active license/authority, charging fees and tying up your assets. Read our article to learn more about trust funds and freight broker bonds to find out which is the best option for you.
Yes. The trust fund ties up your money by requiring 100% collateral, while the bond only requires an annual payment which is a percentage of the bond amount. The bond also comes with a team of claim specialists that will assist you in fighting false claims, which is priceless since the freight broker business has a high frequency of false claims.
A $75,000 bond is now required as of October 1st, 2013. We strongly advise that all freight brokers are compliant before they continue operations in order to keep their authority and avoid unnecessary fines.
There is no physical bond form, as it is an electronic bond filing which we will handle for you. Once your bond is filed, you can view it on the FMCSA website.
Yes. It can also be referred to as a trucking surety bond, a transportation broker surety bond and a BMC-84 surety bond. In the past, it was called an ICC surety bond prior to the FMCSA handling all freight broker licensing.
Contact the bonding company who wrote your bond. Freight broker bonds have a high amount of false claims due to delayed payment to carriers, and we specialize in working with the surety claims departments to help you properly defend yourself.
Surety Bonds do not protect you
The bond is a form of insurance for your clients, which is why many businesses proudly list that they are bonded on their marketing material. However, you will be required to reimburse the bonding company should a claim be paid out.
Fidelity Bonds protect your business
You can protect your business from employee theft and fraud by purchasing a fidelity bond. You can read more in our fidelity bond section.