Surety Bond
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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.
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
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.
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.
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.
In order to become a licensed freight broker, applicants must take several additional steps required by the FMCSA:
You need to file an OP-1 Application for Motor Property Carrier and Broker Authority
You will need to provide proof of insurance coverage
You will need to submit a BOC-3 for Designation of Process Agent
There will be a filing fee of $300
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.
After we gather all of your information we will get back to you with the best premium rate for your bond.
Our insurance specialists are constantly working to get you the best rates, whether you are a new or existing client.
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