A freight broker surety bond is a type of financial guarantee that protects shippers and carriers from financial losses caused by a freight broker's failure to pay its bills or comply with federal regulations. This bond is required by the Federal Motor Carrier Safety Administration (FMCSA) for all freight brokers operating in the United States.

​

What is a Freight Broker Surety Bond?

A freight broker surety bond is a three-party agreement between the:

• Principal: The freight broker who is required to obtain the bond.

• Obligee: The FMCSA or any other entity protected by the bond.

• Surety: A bonding company that issues the bond and guarantees payment if the principal defaults on its obligations.

​

Why are Freight Broker Surety Bonds Required?

Freight broker bonds play an important role in the transportation industry by:

• Protecting shippers and carriers from financial losses. If a freight broker fails to pay its bills or comply with regulations, the surety company will be responsible for reimbursing the injured party.

• Ensuring that freight brokers meet minimum financial standards. The bond amount is set by the FMCSA based on the potential risk of financial harm that a freight broker could cause.

• Encouraging ethical and responsible behavior in the industry. By requiring freight brokers to obtain a bond, the FMCSA is sending a message that it will not tolerate fraudulent or irresponsible behavior.

​

What are the Different Types of Freight Broker Bonds?

There are six different types of freight broker bonds, each with its own specific requirements and coverages:

• BMC-84 Bond: This is the most common type of freight broker bond and is required for all brokers who arrange for the transportation of goods.

• BMC-85 Bond: This bond is required for freight brokers who also transport goods themselves (e.g., freight forwarders).

• BMC-86 Bond: This bond is required for freight brokers who transport hazardous materials.

• BMC-87 Bond: This bond is required for freight brokers who transport used household goods.

• BMC-91 Bond: This bond is required for freight brokers who transport passengers in interstate commerce.

• BMC-92 Bond: This bond is required for freight forwarders who transport passengers in interstate commerce.

​

How Much Does a Freight Broker Bond Cost?

The cost of a freight broker bond depends on several factors, including the:

• Bond amount: The standard bond amount is $75,000, but it can be higher for brokers with a higher risk profile.

• Creditworthiness of the applicant: Brokers with good credit will typically qualify for lower premiums.

• Bond term: Bonds can be purchased for one, two, or three years. Longer terms will typically cost less per year.

​

How to Obtain a Freight Broker Surety Bond

There are a few simple steps that freight brokers can take to obtain a surety bond:

1. Shop around: Get quotes from multiple surety companies to compare rates and terms.

2. Choose a surety company: Select a reputable and financially stable company.

3. Complete the application: The application will typically require information about the broker's business, financial history, and credit score.

4. Pay the premium: Once approved, the broker will need to pay the premium to the surety company.

​

Conclusion

Freight broker surety bonds are an important part of the trucking industry. By ensuring that brokers are financially responsible, these bonds help to protect shippers and carriers from financial losses and promote ethical business practices.

​