The cost of your freight broker bond or BMC 84 bond is a percentage of the $75,000 bond amount as determined by a surety company. Generally speaking the cost ranges from 3-4% of the bond value. In certain cases, FCA Surety is able to negotiate lower rates as low as 1.8% for long standing freight brokers. Newer freight brokers may qualify for a lower rate after a year or two of conducting business without having any claims filed against the bond.
Freight broker surety bonds are valid for one year from the date it is issued. If either the broker or surety wishes to terminate the bond during that year, a 30-day notice of cancellation must be sent to the FMCSA. During the 30 days prior to cancellation, the surety remains liable for any claims filed against the bond.
In order to apply for a $75,000 BMC-84 surety bond, we require a completed application form from the company along with the following documents:
To apply for a Freight Broker Bond please contact FCA Surety today to request the application forms to discuss any questions.
Yes. We work with multiple new freight brokerage companies each year. The application process is quite similar but in place of financial statements, the surety companies will require a copy of the owner(s) most recent personal tax filing. We also generally request a resume or some background on the principals. In addition the premium charged is generally closer to 5% annually.
Most Freights Brokers prefer the BMC 84 bond over the BMC 85 trust fund option. This is simply because with the bond, you will not need to post collateral with the surety. The surety will complete their underwriting and will determine a premium. Once this premium is paid the bond is issued and remains in place for a 12 month period with automatic renewals each year. By using the bond, the Freight Broker chooses not to tie up his cash or credit. This improves your liquidity, and helps you operate a more financially sound business. A BMC-85 trust fund, on the other hand, is a form of security provided by you as the freight broker. You must pay a yearly fee, and place $75,000 cash in a trust account to cover future bond claims.
For most freight brokers, the answer is yes. The trust fund (BMC-85) ties up your money by requiring 100% collateral, while the bond only requires an annual payment which is a percentage of the bond amount.
Chris Dardarian and FCA were great to work with! They provided timely and comprehensive advice and a product that suited our needs. Our situation was complicated by COVID but the transaction was handled efficiently.
FCA is one of the best companies we have had the pleasure of working with so far. Very professional, fast and timely. Looking forward to continue working with them.
Jamie Collum from FCA did a great job in assisting me throughout the process. Not only from bonding aspect but other aspects to relating to obtaining approvals and insurance Would definitely and highly recommend them. Gem of a guy.