What is a Freight Broker Bond?
Freight brokers and forwarders in the U.S. must obtain a $75,000 freight broker surety bond, also known as a BMC-84 bond, to comply with Federal Motor Carrier Safety Administration (FMCSA) requirements. This bond, also known as BMC-84 bond, ICC broker bond, or FMCSA broker bond, is essential for securing a freight broker license.
The FMCSA mandates the bond to protect shippers and carriers against brokers who fail to meet contractual obligations, such as non-payment or fraud. It represents an agreement between three parties:
- Principal: The freight broker
- Obligee: The FMCSA
- Surety: The bonding company
The bond must come from a surety authorized by the Secretary of the Treasury. Bryant Surety Bonds simplifies the process by partnering with A-rated, T-listed sureties to offer competitive rates and guaranteed FMCSA acceptance.
How to Get a Freight Broker Bond?
Follow these simple steps to secure your bond and have it sent to the FMCSA:
- Apply Online: Fill out our quick online application and let us do the rest.
- Get Your Quote: Receive a free, no-obligation quote.
- Get Your Bond: Once paid, receive a digital copy of your bond.
Your bond will be forwarded to the FMCSA the same day, though it may take 2-3 business days for their records to update. You can verify your freight broker bond on their Company Snapshot Page.
If you are considering applying online, you can review the requirements needed to process your application below.
Freight Broker Bond Requirements
To apply for a freight broker bond, you’ll need to provide the following information:
- MC Number (optional): Issued by the FMCSA, separate from a US DOT number.
- Contact Information: Email and physical addresses for communication and bond delivery.
- Company Name: Required to issue the bond, though not needed for a quote.
- SSN: Used for a soft credit check.
- Residency Status: Applicants must have legal U.S. status (green card holders and citizens).
- Years in Business: More experience can lower your bond rate.
- Active Claims: Must disclose and resolve any existing claims before applying.
- Ownership Details: Include ownership percentages if there are multiple owners.
How Much Does a Freight Broker Bond Cost?
The freight broker bond cost is a percentage of the $75,000 bond amount, known as the bond premium, determined by the issuing surety company. This percentage depends largely on several key factors such as:
- Credit score
- Industry experience
- Past bond claims
- Business financials
- Fixed and liquid assets
Your credit score significantly determines the bond premium, but demonstrating financial stability and industry experience can help lower the premium.
Freight broker bond rates can start as low as 1.25% ($938) annually for brokers with excellent credit, previous experience, and good financials. Due to the high risk associated with the bond, the rates for new applicants can be higher than before. Applicants with credit scores between 650 and 725 can expect rates between 3.5% and 5.5%.
Use our Surety Bond Cost Calculator for an estimate or apply online for a free quote.
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Get a free exact quote Get another estimateCan I Get a Freight Broker Bond with Bad Credit?
Yes, freight brokers with less-than-perfect credit scores or no credit history can still secure a bond. However, they are considered high-risk applicants and their bond premiums will be higher, typically ranging from 5.5% to 15% of the bond amount. Bryant Surety Bonds offers a bad credit program to help you get bonded at the lowest rate. To determine your cost, complete our simple Freight Broker Bond Form.
To reduce your premium, consider:
- Improving your credit score
- Resolving tax liens, civil judgments, or unpaid debt
- Providing financial documents that demonstrate financial stability
To learn about how you can lower your freight broker bond cost, check out the video below.
Choosing Between BMC-84 and BMC-85
To meet the FMCSA's financial security requirement for your freight broker license, you can choose the popular BMC-84 bond or the BMC-85 trust fund. Each option has its pros and cons outlined below.
The BMC-84 Bond
The BMC-84 bond is the most popular choice for meeting the FMCSA’s security requirement, managed by a surety company rather than a government agency.
PROS
- 99% approval rates if your finances are in order, your credit score is good, and you have previous industry experience
- Pay only a small percentage of the bond amount (the bond premium)
- Immediate filing with the FMCSA
- Designated claims agent for court representation
CONS
- It is credit history based: premiums are higher for low credit scores and new applicants.
The BMC-85 Trust
This option requires locking $75,000 in a trust fund, which is inaccessible while holding your freight broker license. It’s common among larger businesses with available capital. If this is a viable option for your brokerage, you must submit a BMC-85 trust fund agreement to the FMCSA.
PROS
- No credit checks required - suitable for applicants without any experience and with low/no credit score
CONS
- $75,000 collateral required upfront
- Claims are processed by the government without a representative
- Reduces available capital for business growth
- Annual fees of 1-2% ($1,000-$1,500)
- Funds may remain tied up for months, even years after cancellation.
Freight Broker Bond Claims Process
If a claim is filed against your BMC-84 bond, don’t panic. While claims are common in the freight industry, many are resolved quickly, often due to missed or late payments. The claims process varies depending on whether you have a BMC-84 bond or a BMC-85 trust fund.
Filing a Claim Against a BMC-84 Freight Broker Bond
- The claimant locates your surety bond provider through the FMCSA database (requires login credentials).
- They contact the surety bond agent and complete the required paperwork to file the claim.
- A claims agent is assigned to represent the freight broker.
- If the claim is proven valid, the surety compensates the claimant up to the bond amount, and the broker must reimburse the surety as per the indemnity agreement.
Filing a Claim Against a BMC-85 Trust Fund
- Claimants contact the Federal Services Corporation (FSC), authorized by the FMCSA to manage broker claims.
- A "Carrier Claim Inquiry" is submitted, and a claim application with instructions is emailed within 48 hours.
- If valid, the broker must pay the claimant directly for all outstanding amounts and damages.
How Can I Verify My Freight Broker Bond?
Although there’s no quick way to verify your freight broker bond, you can check its status online by following these steps:
- Visit the US DOT and FMCSA License and Carrier Search website.
- Enter your MC or USDOT number in the search field.
- On the results page, select "View Details" in the last column and choose either the HTML or PDF report.
- Check the “Insurance Type” field for "Bond" to see if "Insurance on File" is marked "YES."
This is the only method to confirm active bond coverage for yourself or another freight broker online.
Freight Broker Bond Renewal and Cancellation
Freight broker bonds are valid for one year and must be renewed before expiration to maintain your license. To cancel, submit a 30-day cancelation notice using Form BMC-36 to the FMCSA. Note that liability for violations before cancellation remains. Becoming a licensed freight broker requires dedication and completing several key steps.
If you are retiring or closing your brokerage, you must submit the BMC-36 form to the FMCSA at least 30 days in advance.
Freight Broker Bond FAQs
What's the difference between BMC-84 and BMC-85?
BMC-84 is a surety bond requiring an annual premium; BMC-85 is a trust fund requiring a full $75,000 upfront. They both serve the same purpose of providing a financial guarantee.
What Does a Freight Broker Bond Cover?
If freight brokers or forwarders violate the bond terms, affected parties can file a claim. The surety company will pay out valid claims up to the full bond amount. Claims typically arise when brokers fail to pay motor carriers or other business partners on time.
If My Credit Improves, Will My Renewal Rate Decrease?
Improving your credit score can help lower your renewal rate, but it’s not guaranteed. Renewal premiums also depend on factors like collections, public records on your credit report, and updated surety underwriting guidelines for your bond type.
How Do I Get a Freight Broker License?
To obtain a freight broker license, register your business and apply through the FMCSA’s Unified Registration System. You’ll need an MC number (operating authority), a $300 application fee, a freight broker bond, and personal and business details. Once approved, you’ll receive a grant letter with your MC number and must wait 10 days for final authorization. If working with carriers, you’ll also need a USDOT number.
Additional Resources
- FMCSA: Broker Registration Overview
- U.S. Code Title 49 Section 13906: Security of Motor Carriers, Motor Private Carriers, Brokers, and Freight Forwarders
- How to Become a Freight Broker
- Frequently Asked Questions about Becoming a Freight Broker
