FOR ALL YOUR SURETY BOND NEEDS.
These surety bonds are general for all states.
Learn more about freight broker surety bonds, and apply today. Absolute Surety offers surety bonds nationwide through a convenient online application system.
Freight broker surety bonds are a type of license and permit bond. The Federal Motor Carrier Safety Administration (FMCSA) requires these bonds from freight brokers and freight forwarders in order to be granted a license or to renew an existing license.
They are also known as BMC 84 bonds, ICC broker bonds, property broker bonds, or transportation broker bonds. A freight broker bond protects the motor carriers the broker hires by guaranteeing that they are paid.
Any individual or company operating as a transportation broker or freight forwarder in the U.S. must first obtain a BMC-84 bond to guarantee payments to motor carriers and shippers. One bond fulfills the requirement for both transportation brokerage and freight forwarding, as long as both functions are performed by the same legal entity. However, if you operate two separate entities, one as transportation broker and the other as freight forwarder, each must purchase its own bond.
A freight broker bond provides financial protection for a freight broker’s customers in the event that the broker is unable to honor its contracts with carriers or deliver shipments. There are always three parties involved in a surety bond agreement: the obligee, the principal, and the surety. In this case, the obligee that requires the bond is the FMCSA, the bond principal is the freight broker required to obtain the bond, and the surety is the underwriter that issues the bond.
A party that has a legitimate grievance against the principal (for example, a trucker or shipper that does not get paid) has the right to file a claim against the bond. The surety will determine whether the claim is valid and will pay it if it is. Ultimately, however, the principal is legally obligated to repay the surety.
The FSCMA requires a bond amount of $75,000. This means that customers and carriers are protected for up to $75,000 if the bond principal (the freight broker) violates FMCSA regulations. However, the surety charges only a small percentage of that $75,000 total bond value as the annual bond premium that you will pay. The specific percentage depends primarily on your creditworthiness.
If you’re seeking licensing as a freight broker or freight forwarder, let us help you obtain the freight bond you’ll need.
