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Freight Broker Surety Bond / Freight Forwarder Surety Bond (BMC-84 Surety Bond)

What is a Freight Broker Bond / BMC-84 Bond?

  • A Freight Broker Bond, also known as a Freight Broker Surety Bond, BMC-84 Bond, Freight Fowarder Surety Bond, or a $75K Broker Surety Bond, is a $75,000 surety bond that is required in order to obtain licensure to operate legally as a Freight Broker and/or Freight Forwarder. BMC-84 refers to the bond form provided by the FMCSA.
  • According to U.S. Code 49 Section 13102, a freight broker does not actually function as a carrier or shipper but instead is any individual or company that “sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation.”
  • A freight forwarder, according to U.S. Code 49 Section 13102, is “a person holding itself out to the general public (other than as a pipeline, rail, motor, or water carrier) to provide transportation of property for compensation and in the ordinary course of its business: A) assembles and consolidates, or provides for assembling and consolidating, shipments and performs or provides for break-bulk and distribution operations of the shipments; B) assumes responsibility for the transportation from the place of receipt to the place of destination; and C) uses for any part of the transportation a carrier subject to jurisdiction under this subtitle.”
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  • Due to the risk from the perspective of the bonding company, Freight Broker Bonds are very carefully underwritten and priced accordingly. Part of the cost of this bond will be the time and effort needed to provide the documentation and information the bonding company will require. In all cases, personal credit, personal financials, and business financials will be required. Of course, we can typically handle all credit types and financial situations — from excellent to poor — as such those terms vary.
  • Partly because of the degree of claims activity, the Moving Ahead for Progress in the 21st Century Act (MAP-21) was passed on July 6, 2012, effectively increasing the bond amount from $10,000 to $75,000. Freight Broker/Forwarder (BMC-84) Bonds can be written as low as 1.25% ($938) of the bond amount when applicants have excellent credit (700 FICO or higher), excellent personal and business financials, and have been in business for at least 5 years without any claims being made against their bonds. Most, and especially newer, applicants will typically require a rate between 2% and 5% of the bond amount, again depending on the credit score and financial strength. Also, note that individuals or businesses with a bankruptcy within the last 5 years are very difficult to bond.

The purpose of a Freight Broker/Freight Forwarder Bond (BMC-84) is to protect shippers and carriers from Brokers’ and Forwarders’ failure to abide by the term of any contracts, agreements, and arrangements made by them and to hold them liable for damages incurred because of the failure to faithfully perform.

The Federal Motor Carrier Safety Administration (FMCSA) manages this program for the U.S. Department of Transportation and has established the rules, regulations, and procedures to be followed, including the posting of the bond. Applicants must register per U.S. Code 49 Section 13904 and be licensed by the U.S. Department of Transportation. As part of the licensing process, the bond must be filed per U.S. Code Title 49 Section 13906. The Obligee on the bond reads as the United States of America.

The Freight Forwarder/Broker Bond term begins on the effective date and remains in effect until canceled. The cost is billed and payable annually. The broker and the surety both have the ability to cancel the bond by sending a 30-day notice to the FMCSA.

Contact The ProSure Group. As surety bond experts in business over 23 years in Florida, The ProSure Group has handled numerous bonds of this type and has partnerships with more than 30 different surety companies. This ensures that we get you the best, most competitive pricing and terms available in the marketplace. You just need to complete our simple application and one of our specialists will contact you.

What you will need to submit to obtain your license:

  • The FMCSA has specific forms for each step in the process.
  • File Form OP-1 (Application for Motor Property Carrier and Broker Authority), it is for registration and may demand supplemental documentation to be attached.
  • Submit required $75,000 Freight Broker Bond/Freight Forwarder Bond (Form BMC-84)
  • Pay $300 fee for each type of operating authority being requested.
  • First-time applicants must first register using the Unified Registration System (URS).
  • Brokers requirement: proof of 3 years of relevant experience or evidence of industry knowledge.
  • Submit Designation of Agents for Service of Process (Form BOC-3) for each state in which operating.
  • And more.

Certain types, including Forwarders, will require minimum insurance coverage:

Liability insurance: BMC-91 or BMC-91x

  • Freight: $750,000 to $5 million minimum depending on cargo
  • Vehicles weighing less than 10,001 pounds that transport non-hazardous freight: $300,000
  • Passenger Vehicles: $5 million
  • Passenger Vehicles with a capacity of 15 or fewer people: $1.5 million

Cargo Insurance if you are a household goods freight forwarder: BMC 34 or BMC-83

  • $5,000 per vehicle (minimum)
  • $10,000 per occurrence (minimum)

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Freight Broker Bond / Freight Forwarder Bond (BMC-84 Bond) Surety Bond Experts!
Type Bond Obligee Bond Amount
License Freight Broker Surety Bond/Freight Forwarder Surety Bond (BMC-84 Bond) U.S. Department of Transportation, Federal Motor Carrier Safety Administration