What is a Freight Broker Bond?
A freight broker bond, also called a BMC-84 bond, is a financial guarantee required by the Federal Motor Carrier Safety Administration (FMCSA). Freight brokers and forwarders in the U.S. must obtain this $75,000 bond to operate legally. You can learn more and get your bond at AlphaSuretyBonds.com.
- Principal: The freight broker
- Obligee: The FMCSA
- Surety: The bonding company
How to Get a Freight Broker Bond
- Apply Online: Fill out a quick online application.
- Get a Quote: Receive a free price estimate.
- Purchase the Bond: Once paid, you’ll receive a digital copy.
Requirements for a Freight Broker Bond
To apply, you need to provide:
- MC Number (optional): Issued by the FMCSA
- Contact Information: Email and mailing address
- Company Name: Needed to issue the bond
- Social Security Number (SSN): For a soft credit check
- Residency Status: Only U.S. citizens or green card holders can apply
- Years in Business: More experience can mean lower costs
- Active Claims: Any outstanding claims must be resolved
- Ownership Details: If there are multiple owners, include their percentages
How Much Does a Freight Broker Bond Cost?
The bond cost is a percentage of the $75,000 bond amount, called a bond premium. The premium depends on:
- Credit score
- Industry experience
- Past bond claims
- Business finances
- Available assets
Rates start as low as 1.25% ($938 per year) for brokers with excellent credit and experience. For those with credit scores between 650 and 725, rates range from 3.5% to 5.5%.
Can You Get a Freight Broker Bond with Bad Credit?
Yes, but high-risk applicants will pay a higher premium—typically 5.5% to 15% of the bond amount. Some agencies offer special programs to help reduce costs. To lower your premium, you can:
- Improve your credit score
- Pay off outstanding debts
- Provide financial records showing stability
BMC-84 vs. BMC-85: Which Should You Choose?
To meet FMCSA requirements, you can choose a BMC-84 surety bond or a BMC-85 trust fund.
BMC-84 Bond:
- Requires only a small annual premium
- High approval rates for experienced brokers
- Immediate FMCSA filing
BMC-85 Trust Fund:
- Requires a full $75,000 deposit upfront
- No credit check needed
- Ties up business funds for an extended period
Most brokers prefer BMC-84 since it requires less money upfront.
Freight Broker Bond Claims Process
If a claim is filed against your bond:
- The claimant contacts the surety company.
- A claims agent reviews the case.
- The broker must then reimburse the surety.
With a BMC-85 trust fund, the FMCSA handles claims, and brokers must pay claimants directly.
How to Verify Your Bond
You can check your bond status online by:
- Visiting the FMCSA License and Carrier Search website.
- Enter your MC or USDOT number.
- Checking the “Insurance Type” section for “Bond.”
Freight Broker Bond Renewal & Cancellation
The bond is valid for one year and must be renewed before it expires. If you plan to cancel, submit a BMC-36 cancellation form at least 30 days in advance. However, you are still responsible for any violations that occurred before cancellation.