The BMC-84 Freight Broker Bond is necessary for operating as a licensed freight broker or freight forwarder in the United States. This regulation is required by the Federal Motor Carrier Safety Administration (FMCSA). The bond demonstrates the financial responsibility of a broker, guaranteeing payment to motor carriers and shippers if a broker fails to comply with its contracts and agreements.
With the signing of the MAP-21 bill, freight brokers and freight forwarders have been required to post a $75,000 bond since Oct 1, 2013, which is a significant increase from the previous $10,000 bond. Brokers that do not comply with the bond requirement may have their broker authority revoked by the FMCSA.
Also referred to as Interstate Commerce Commission (ICC) Bond, Property Broker Bond, and Transportation Broker Bond.
Questions about Freight Broker Bonds
- How much does a Freight Broker Bond cost?
- Can I get a BMC-84 Bond if I have bad credit?
- Do I need a Motor Carrier (MC) Number before applying?
- How do I get my BMC-84 Bond?
- What should I do if there is a claim against my BMC-84 Bond?
- If my credit improves, will my renewal rate be lowered?
- BMC-84 Bond Renewal and Cancellation
- What is the Household Goods Broker Bond?
- How to Verify Your Freight Broker Bond?
- Becoming a Licensed Freight Broker
How much does a Freight Broker Bond cost?
Annual bond premiums for the $75,000 BMC-84 Bond currently range between $938 and $9,000. The cost of your freight broker bond is determined based on your personal credit score and time in business. A company’s financial strength and assets can also be taken into consideration.
Can I get a BMC-84 Bond if I have bad credit?
Yes. While many sureties only offer bonding to customers with perfect credit, Lance Surety Bonds has designed a special Bad Credit Program for applicants with problematic finances. Your annual premium will depend on your individual credit profile, but you can expect slightly higher rates due to the increased bonding risk.
Approvals for BMC-84 bonds do not require collateral. We are able to get you bonded with just an annual premium requirement.
Collateral is only needed if you are trying to meet the freight broker securities requirement by using a BMC-85 trust fund. You can read more about the difference between a BMC-84 bond a BMC-85 trust fund here.
Do I need a Motor Carrier (MC) Number before applying?
No. You can apply for this bond before being assigned an MC Number. However, the surety company will need an active MC Number in order to properly file your bond with the FMCSA.
How do I get my BMC-84 Bond?
Freight Broker Bonds are electronically filed with the FMCSA, so you don’t have to worry about additional paperwork. Once the FMCSA approves your bond, you will be provided with the electronic filing confirmation, and within 24 hours will be able to view your active bond coverage on the FMCSA website.
For your reference, here is a blank copy of the bond form: FORM BMC-84
To get a freight broker bond quote, fill out our easy online application form!
What should I do if there is a claim against my BMC-84 Bond?
If you are made aware of a claim there are a few actions you can take.
First, contact your bond agent right away so they are kept in the loop. If a claim was already placed against the bond, chances are your bond agent will be able to provide you with important information regarding what the claim was for, and who placed it.
Next, contact the claimant to see if the issue can be resolved on your level without further incident. In most cases, claims are a result of poor communication with shippers and motor carriers regarding payment. Once the issue is resolved, provide documentation to your bond agent and the surety, and you should be all set.
If the claim remains open and is proven legitimate, you will be liable to cover all relevant costs, as stated in the bond indemnity agreement which you are required to sign when obtaining your freight broker bond.
Bond claims must be taken seriously, as having a paid claim on your record may affect your ability to get bonded.
If my credit improves, will my renewal rate be lowered?
Yes, a higher credit score can certainly help to lower your renewal rate. However, a better score does not guarantee a lower rate. In addition to FICO score, renewal premiums will also depend on collections and public records on your credit report, and updated surety underwriting guidelines for your specific bond type.
BMC-84 Bond Renewal and Cancellation
All freight broker bonds are valid for only 1 year since the issue date. In order to keep continuous coverage of your freight broker license, you must renew your bond before the expiration date each and every year. Failure to do so will result in a revoked and suspended license.
If you are retiring or closing down your brokerage, you must notify the FMCSA at least 30 days in advance using the BMC-36 form.
When you get bonded, or renew your bonding with Lance Surety Bonds, you will have one less thing to worry about, as we send out yearly reminders to make sure your license is always covered on time.
What is the Household Goods Broker Bond?
Since early 2012, the FMCSA has required all Brokers of Household Goods to post a $25,000 BMC-84 Bond. Brokers that arrange the transportation of household goods in interstate or foreign commerce must furnish a new bond or arrange to have their current BMC-84 Bond increased. More specific information can be obtained from the FMCSA website. Currently, there are three states which require the bond:
- Louisiana Household Goods Carrier Bond - $5,000
- Pennsylvania Household Goods Carrier Bond - $10,000
- Virginia Household Goods Carrier Bond - $50,000
How to Verify Your Freight Broker Bond?
Even though there is no speedy way to verify your freight broker bond, there is a way you can check the status of your freight broker bond and license online by using the following these easy steps:
- Go to the US DOT and FMCSA License and Carrier Search website.
- Enter your MC or USDOT number in the appropriate field.
- After you land on the next page, go to the last column "View Details" and select either HTML or PDF Report
- From there, you can check the “Insurance Type” field for "Bond", and see if there is any "Insurance on File"
- If there is an active bond on file, the column will read "YES"
This is currently the only way that you can check online if you or any other freight broker or forwarder has active bond coverage.
Becoming a Licensed Freight Broker
Becoming the middle man between shippers and carriers is no easy task. That is why we have written an in-depth step-by-step guide on how to become a freight broker.
On it, you will be able to find all the necessary steps needed in order to receive your freight broker license and start your brokerage.