Freight Broker Bond (BMC-84)

Apply at TheBondAgent. You pay a premium that is a percentage of the $75,000 bond amount, based mostly on credit and experience.

If you hold both carrier and broker authority, you need the bond and carrier insurance. We quote both.

Property brokers and freight forwarders must maintain $75,000 in financial security, either a surety bond (BMC-84) or a trust fund agreement (BMC-85), under 49 CFR 387.307. FMCSA won't activate broker authority until the bond or trust is on file along with your BOC-3. Rules adopted under MAP-21 also let FMCSA suspend a broker's authority if available financial security falls below $75,000.

A surety bond isn't insurance for you. It protects motor carriers and shippers who aren't paid. The surety prices it as a percentage of the bond amount based mainly on the owner's personal credit, financial strength and experience. Claims paid by the surety must be reimbursed by the broker under the indemnity agreement. Strong credit and financials get the best rates, while weaker credit may need collateral or a higher rate.

Contingent auto liability and contingent cargo protect brokers when a carrier's coverage fails. Shippers often require them, along with errors and omissions and general liability. Brokers vetting carriers should check the carrier's FMCSA filing status before tendering loads.

Have your MC number (or pending application), business entity details, ownership information and authority to run a credit check ready. Bonds can often be issued quickly for applicants with good credit, and we'll tell you what the surety needs if not.

Make sure everyone is safe, call police when anyone is injured or vehicles must be towed, and photograph the scene, the vehicles, the load and the seal. Get the other parties' insurance information. Don't admit fault or sign anything except the police and inspection paperwork. Report the claim to your agent or insurer right away; most policies require prompt notice, and a late report can complicate coverage.

Under FMCSA rules (49 CFR 390.15), qualifying crashes must be recorded in your accident register, and drivers involved in certain crashes must be drug and alcohol tested under Part 382. For cargo, keep the bill of lading, delivery receipt notations, reefer download (if any) and photos. Exceptions noted at delivery are often what decides a cargo claim.

Brokers, shippers, warehouses and port equipment providers will ask for a certificate of insurance, often naming them as certificate holder or additional insured. Some also want a waiver of subrogation or specific limits. Send the contract to your agent before you sign, because a promise you make in a contract that your policy doesn't match is your problem, not the insurer's. Common requests include $1,000,000 auto liability, $100,000 cargo, general liability and trailer interchange for drayage.

Most coverage problems come from paperwork, not accidents. Add new trucks and drivers to the policy before they run, remove sold units, report radius or commodity changes, and pay installments on time. A cancellation for non-payment triggers an FMCSA filing cancellation and can take your authority down (see FMCSA insurance requirements). At renewal, request loss runs from your current insurer early so we can shop with them in hand.

Besides the bond, brokers must keep records of each transaction for three years (49 CFR 371.3), including the shipper, carrier, bill of lading, compensation received and any freight charges collected. The carrier and shipper each have the right to review the record of the transaction they were part of. Brokers also need to register with UCR every year.

Most broker bond claims come from unpaid carriers. Paying carriers promptly, keeping clean carrier-payment records, and resolving disputes before they turn into bond claims protects both your bond rate and your authority.

Before you tender, confirm the carrier's authority is active, check its insurance filings and safety record on SAFER, and get a current certificate that shows the cargo and liability limits the load needs. If you're also running trucks yourself, see new authority insurance.

• Is the bond written on the current BMC-84 form, and will the surety file it electronically with FMCSA?
• What's the annual rate at my credit tier, and is any collateral required?
• What happens to my rate if a claim is paid?
• Do you also write contingent auto, contingent cargo and E&O for brokers?

Write down the answers and compare them across quotes. The cheapest premium often comes with the narrowest coverage.

• eCFR – 49 CFR 387.307, property broker surety bond or trust fund
• FMCSA – Insurance requirements (49 CFR 387)
• TheBondAgent – BMC-84 freight broker bond