Freight Broker Bonds

Freight Broker Bonds

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A freight broker bond (BMC-84) or a trust fund agreement (BMC-85) is required by the Federal Motor Carrier Safety Administration (FMCSA) for freight brokers and freight forwarders before receiving a freight broker license.

Freight broker bonds vs trusts

  • Freight broker bonds are better because all assets remain available to your business instead of being tied up in the trust
  • Trust companies will often pay claims after little or no investigation because they have no liability
  • Placing $75,000 into a trust fund requires full collateral up front

Freight Broker Bonds

Freight Broker Bonds | Commercial Truck Insurance | CNS Insurance

What and Why?

What are Freight Broker Bonds?

An insurance broker bond is a promise that brokers will develop legal strategies to assist clients and abide by laws in the state of practice. The surety bond protects clients from potential fraudulent acts like price manipulation, or brokers falsifying information on claims.

The cost of your freight broker bond is a percentage of the $75,000 bond amount, typically 2-4% of the bond amount.

Like with new entrant commercial trucking insurance, if you have a low credit score or a new broker business, you will pay a higher premium. Freight brokers may be able to get a lower rate after a year or two of business without having any claims filed against the bond or if your credit score improves before you renew.

plan of action

know your Coverage

It is important to keep in mind legal requirements when obtaining Freight Broker Bonds. Freight Broker Bonds is mandatory in all 50 states and failure to obtain coverage could cost you a lot of money in fines. By law, you must have a minimum of $75,000 surety bond before receiving a freight broker license.

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Surety Bond

The surety company thoroughly investigates claims made against the bond prior to making a claim payment, shares the liability, and will do their best to mitigate claims made against the bond.

How to become a freight broker

In order to become a licensed freight broker, applicants must take several additional steps required by the FMCSA:

OP-1 Application

You need to file an OP-1 Application for Motor Property Carrier and Broker Authority

insurance coverage

You will need to provide proof of insurance coverage

BOC-3

You will need to submit a BOC-3 for Designation of Process Agent

filing fee

There will be a filing fee of $300

01

Request a quote

Before we can get you an estimate, we are going to need some information. Fill out the quick broker bond form below to get started.

02

Get bonded

After we gather all of your information we will get back to you with the best premium rate for your bond.

03

Start saving

Our insurance specialists are constantly working to get you the best rates, whether you are a new or existing client.

Quick Freight Broker Bond Quote

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