Hi, John. I’m on my way to becoming a
freight broker but before I get my license I was told I needed a freight
broker bond. Do you know what a freight broker bond is and how I can obtain one?
– Sure, I do. First, let’s start with a basic
definition. If you’ve never heard of the term “freight broker bond”, keep in mind
that it can also be referred to as a BMC-84 surety bond, trucking surety
bond and a transportation broker surety bond. It also used to be known as an ICC
surety bond. Freight broker bonds are required by the Federal Motor Carrier
Safety Administration to make sure that freight brokers keep their contractual
agreements with shippers and carriers. Imagine the following situation: a motor
carrier fulfills their obligation towards the freight broker by delivering
a piece of cargo, but the freight broker is either delaying, or refusing payment.
In that case the freight broker bond will go into effect and compensate the
– I understand. Sounds reasonable. And how do I get
– The application is simple and what’s better is that it is automated
and can be done online. You can submit your online application with Lance Surety
Bonds and we will match you with the surety bond company which offers you the
best quote. And all this within minutes! Why is my credit score so important?
– Bonding companies take an owner’s credit score into account as it can be a
reflection of their ability to stay on top of their financial responsibilities.
This particular bond is in place to guarantee that shippers and motor
carriers are paid on time by freight brokers. There is often a correlation
between an owner’s credit and the likelihood of triggering a claim. If
there is a claim against you, it is the surety bond company’s responsibility to
financially compensate for all losses you inflicted. Therefore, they’re more
likely to issue bonds to people with clean credit history.
– I see. Does that mean I can’t get a bond if I have bad credit? No. Applicants with bad credit can
usually get a freight broker bond but they may have to pay a slightly higher
price for it to compensate the surety for the additional risk.
– Can you tell me more about how much the bond costs? Sure. As you may have heard, in
October 2013 the Federal Motor Carrier Safety Administration raised the amount
of the freight broker to $75,000 instead of the $10,000 that were in place since the 70s. Wait! $75,000! I don’t have that
kind of money.
– Relax. You don’t have to pay the full amount, unless you go into a
trust fund which is inadvisable because it will tie up your money and you won’t
have any access to them. With a freight broker bond you only pay an annual
premium which is a small percentage of the seventy five thousand dollars.
Normally applicants with clean credit history may pay between 2 and 5%.
Freight brokers with damaged credit can see quotes between 5 and
– Oh, okay. That sounds much better. Yes. In fact, why don’t you go
ahead and start your online application with Lance Surety Bonds? You can get an
instant quote and have a better idea of how much the bond will cost you.
– Great. I’ll do that.
Thanks for all the information! No problem. And remember that
if you still have questions, you can always call one of our agents at: