Freight Broker Bond Guide

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BMC-84 or BMC-85: What’s Right for You?

You have two options to get your license: obtaining a freight broker bond (BMC-84) or a trust fund (BMC-85). They both offer advantages and disadvantages depending on you and your brokerage. Read our detailed article to determine whether you should get a BMC-84 or BMC-85.


Frequent Questions

Costs are a percentage of the $75,000 bond amount that’s required by the FMCSA, which is based mostly on your personal credit. Use our bond pricing tool to get an exact quote.

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. Learn how your brokerage can standout from the crowd with $100,000 excess bond coverage.

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. Find out more about the $75,000 increase.

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.

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.


Why do you need a freight broker surety bond?

You need a bond for your freight brokerage to protect shippers and motor carriers. If don’t follow FMCSA rules, claims can be filed against your bond which you’re responsible to pay. For example, if you don’t pay motor carriers in a timely manner, a claim can be made.Learn more about how surety bonds work and how not having a full understanding can put your brokerage at risk. Formerly known as an ICC bond, the freight broker bond is still sometimes referred to as a transportation broker bond or property broker bond.

If you need help with starting your brokerage, we recommend that you download our free e-book which details everything you need to know for how to become a freight broker. If you're unsure whether you should start freight brokering in the first place, read our article to find out the five reasons you should consider starting a freight brokerage.

What Does a BMC-84 Bond Cost?

Costs are a percentage of the full bond amount, which is based mostly on your personal credit. You can use our bond premium calculator tool to get a quick estimate on your bond, or you can apply online to get a firm quote. You can also learn about the tips for getting the lowest price on freight broker surety bonds.

Freight Broker Bonds Process

If you’re starting a new freight brokerage, you'll need to register with the FMCSA in order to obtain your freight broker authority (you'll also want to ensure that you have a business plan in place). Once registered, you’ll need to get a freight broker bond from a bond company and ensure your bond gets filed with the FMCSA (as mentioned above, this was previously referred to as an ICC surety bond). Read our complete guide to getting your freight broker license. If you're new to freight brokering, take a look at our top freight broker training schools and find out how to market your brokerage effectively.

Bond Claims Can Put Your Brokerage at Risk

You’re responsible to pay bond claims in full which can be as large as the full bond amount (including legal costs). The indemnity agreement you must sign to get your transportation broker surety bond is a legal contract that pledges your corporate and personal assets in the event of bond claims. Watch our video for an easy to understand explanation of how bond claims work. Unfortunately, most bond agencies won’t take the time to explain how bond claims can put you at risk and how to avoid them; if this happens when working with a bond agent it should be a big red flag to reconsider doing business with them.

Save Money on Bond Claims

Your bond agency should be your first line of defense against bond claims. In order to avoid claims, simply follow FMCSA regulations and make sure to pay motor carriers when necessary. Remember, you are responsible to pay for any bond claims that you cause. There is a large number of false claims in the freight broker industry; learn how we can save you money on claims if they occur. If you need help understanding exactly what your bond guarantees you will and will not do, please contact a bond professional.

Freight Broker Insurance Requirements

Besides the surety bond for freight brokers, motor carriers are required to get public liability insurance to insure against bodily injury, property and environmental damage. Brokers and carriers will also need to file the BOC-3 form with the FMCSA. This form is required to designate process agents and is required to operate your brokerage legally.

What Freight Broker Bond Amount Do You Need?

Freight brokers and forwarders are now required to get a $75,000 freight broker bond to get their authority. However, highly qualified freight brokers can also get an optional $25,000 in bond coverage to provide extra protection for their shippers and motor carriers. Learn why the bond requirement increased and how to stand out in your industry.

Don’t Be Fooled By Underfunded Freight Broker Trusts

As mentioned above, you can either get a freight broker bond or a trust fund to obtain a license for your brokerage. However, it’s crucial that you understand not all trust funds being offered meet the FMCSA standards, and have led to hundreds of freight brokers losing thousands of dollars. If you choose to go with the trust fund option, you can learn how to verify that you’re BMC-85 trust fund is acceptable.

What Makes a Good Freight Broker Bond Company?

You want to choose a freight broker bond company that is backed by a financially strong surety company to avoid having your bond canceled by the FMCSA with no refund. Good freight broker bond companies also have dedicated teams to help you fight false claims, which are priceless with the high number of false claims in the freight broker industry. Learn how choosing the right freight broker bond company can save you headaches and money.

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