Learn more about BMC-84 bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
What Are BMC-84 Bonds?
Commonly known as BMC-84 bonds, freight broker bonds are a requirement of the Federal Motor Carrier Safety Commission (FMCSA) for transportation brokers operating in the United States. They are considered a form of license and permit bond because they are required for registering with the FMCSA as a freight broker.
BMC-84 surety bonds are also known as property broker bonds, transportation broker bonds, and Interstate Commerce Commission, or ICC, bonds. Note that the ICC was replaced by the FMCSA in 1995, but the name is still used by many in reference to these bonds.
The FMCSA requires licensed brokers or freight forwarders to have $75,000 available at all times to ensure payment of motor carriers and shippers. They can meet this requirement either by setting up a $75,000 trust fund or by purchasing a $75,000 BMC-84 bond. Most choose to obtain a bond, because the premium is a fraction of that amount.
Who Needs Them?
The FMCSA issues an “authority” allowing a motor carrier, freight forwarder, or freight broker to operate in the United States. Obtaining a BMC-84 surety bond or establishing a BMC-85 trust fund to pay claims against the business is a prerequisite for being granted the necessary authority. The bond or trust fund must be maintained for as long as the operating authority is in effect.
How Do They Work?
The licensed broker or freight forwarder obtaining the bond is the principal, and the FMCSA is the obligee. The bond guarantees that the principal will comply with all applicable rules and regulations of the FMCSA and will make all payments due to motor carriers and shippers.
If the principal fails to pay a motor carrier or shipper, that business can file a claim against the bond. The surety will verify that the claim is valid and then try to get the principal to pay the claim. But if the principal does not pay the claim, the surety will pay it up to the bond penalty amount. The principal is then obligated to repay that amount to the surety.
BMC-84 Bond Cost
The premium rate is determined for each applicant based on credit history and financial condition. Applicants with good credit will pay an annual premium of as little as 1% to 3% of the $75,000 bond amount. Those with poor credit could pay a premium rate of as much as 15%.
Use our convenient online system to apply for a BMC-84 bond today.
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