Freight Broker Bond – BMC-84 bond, is required by FMCSA ( Federal Motor Carrier safety Administration) for all companies providing brokerage or freight forwarding services. As of October 1, 2013 FMCSA increased the minimum financial responsibility to $75,000 freight broker bond, also know as a MBC-84. Formerly known as the Interstate Commerce Commission bond, or ICC Bond, the Freight Broker bond is legally required to operate as an authorized broker or freight forwarder. This bond guarantees payment to shippers and motor carriers in the event your company fails to carry out its contracts as is required by FMCSA.
This type of bond is also commonly known as BMC-84, property broker surety bonds. The FMCSA also allows brokers to submit a BMC-85 trust fund in place of a bond.
Advantages of the BMC-84 freight broker bond when compared to the BMC-85 trust. First the band typically allows you to keep more capital in your business as all that is required is a yearly premium as opposed to a $75,000 trust. Secondly, should a claim arise the surety will investigate to ensure the claim’s validity, with the BMC-85 often times the money is just withdrawn from the trust when the claim is filed.
FMCSA acknowledges that there are motor carriers that occasionally broker loads that have not previously been required to obtain operating authority registration from FMCSA as brokers. FMCSA will accept complaints regarding unauthorized brokers through their National Consumer Complaint Database ( http://nccdb.fmcsa.dot.gov/). One $75,000 bond for both broker and freight forwarder authority is sufficient as long as the legal entity holding the authorities is the same. If your broker and freight forwarder operations are conducted under separate but affiliated companies, then each entity must have a separate bond.